A friend will not return borrowed money. How you can recover it legally

What the law says

There is no special law for loans between friends. Recovery runs on ordinary civil law, and two things decide your case: which route you take, and whether you are inside the limitation period.

The route. You can file a regular civil suit for recovery of the money. Where you have written proof of the debt, a written agreement, a signed cheque, a promissory note, or any liquidated sum due, you can instead use the summary procedure under Order 37 of the Code of Civil Procedure, 1908. A summary suit is quicker because the borrower has no automatic right to defend: if they fail to enter appearance after being served, the claim in the plaint is taken as admitted and the court can pass a decree. If the borrower shows up and raises a genuine, plausible defence, the court grants leave to defend and the case proceeds. One limit worth knowing: Order 37 is only for a fixed, ascertained sum, not for damages or amounts that still have to be proved by evidence.

The clock. For most friendly loans the limitation period is three years under Article 19 of the Limitation Act, 1963, counted from the date the loan was made. Two common variations shift that starting point. If the loan was to be returned "as and when demanded", the three years run from the date you actually make the demand, under Article 22. If it was repayable after a fixed period or on a set date, the clock starts from the date of default, not the date you handed over the money.

Two rules about the clock decide many disputes. A written, signed acknowledgement of the debt, or a part-payment, made before the three years expire, resets the limitation and gives you a fresh three years. Made after the period has already lapsed, it does nothing. Separately, if the debt is already time-barred, a fresh promise to pay it, in writing and signed, can be enforced as a new contract under Section 25(3) of the Indian Contract Act, 1872.

A word on evidence. UPI transfer records and bank transfer records are strong proof that the money actually moved. Keep in mind that such records prove the transfer happened; they do not by themselves stretch the three-year limitation, so the deadline still matters.

What you can do

1. Fix the date the loan was made and the terms of repayment. That date usually starts your three-year clock, so work out your deadline early.
2. Gather and preserve the proof: UPI transfer records, bank transfer records, any written agreement or promissory note, and messages where the borrower admits the loan or promises to repay.
3. If you hold a written agreement, a signed cheque, or a promissory note, you can file a summary suit under Order 37 of the Code of Civil Procedure, 1908, which moves faster than an ordinary suit.
4. Try to get a signed acknowledgement or a part-payment before the three years run out. Done in time, it resets the limitation and buys you a fresh three years.
5. Send a written demand for repayment, and if it is a loan repayable on demand, keep proof of the demand, because your limitation runs from that date.
6. File the recovery suit before the limitation period expires. Missing it is the single most common reason these claims fail.
7. If the loan is already time-barred, you can still act on a fresh written and signed promise to pay, which is enforceable under Section 25(3) of the Indian Contract Act, 1872.

Cases that matter

Bhuvan Chandra Bhatt v. Veenu Kakkar, High Court of Delhi (2025). A friendly loan was given, and part-payments came later, but only after the three-year limitation had already expired. The court held the suit was time-barred. Section 19 of the Limitation Act, 1963 extends the clock only when the part-payment is made while the limitation is still running, not after it has lapsed. The lesson is to act inside the window.

Satish Kumar v. Reena Bhoumik, High Court of Delhi (2012). The loan was to be repaid after a fixed period of five years. The court held that the three years do not run from the date the money was advanced, but from the date of default, that is, when repayment was due and did not come. So a loan with a future repayment date buys you time before the clock starts.

Ravi Sahni v. Pomesh Sahni, High Court of Delhi (2016). Where a loan is advanced on the understanding that it will be returned as and when demanded, the court held the limitation is governed by Article 22 of the Limitation Act, 1963, and the three years begin only when the lender actually makes the demand. Whether a transaction is a loan on demand is decided on evidence, so how you framed it matters.

Arti v. Shiv Kumar Gupta, High Court of Delhi (2018). In a summary suit to recover a loan, the borrower claimed the signatures on the documents were taken under coercion, backed by police complaints. The court held that when the defence raises a plausible, triable issue, the borrower must be given leave to defend and the matter goes to trial. A summary suit is fast, but a genuine dispute still gets tested.