Before You Onboard a Vendor or Accept a Job Offer, Check Their Court Record

Last updated: 5 October 2026

Key takeaways

• Businesses are making this a rule. ElasticRun, the Pune-based B2B commerce company, runs a LegalCheck on every vendor it starts working with.
• Money disputes leave a trail. On 5 October 2026 the eCourtsIndia index held more than 67 lakh records tagged under Section 138 of the Negotiable Instruments Act, the cheque-bounce law, over 41 lakh still pending.
• Trouble often shows up in court before it shows up in the news. More than 100 court records naming the company behind Byju’s as a respondent had been filed before 2024, the year its salary and insolvency troubles dominated headlines.
• Check the people, not just the company. Directors, partners and proprietors carry the cases a new company name can hide.
• Job seekers can check too. Your employer will verify you. Two minutes lets you verify them.

ElasticRun is a Pune-based B2B commerce platform, founded in 2016, that extends the distribution networks of FMCG companies to kirana stores across rural India, according to Inc42. A business like that works with a long tail of transporters, warehouse operators, suppliers and service providers. One bad partner can hold up stock, money and reputation across a whole region.

Their answer was not a bigger legal team. It was a two-minute check, run every time, before the first purchase order.

You do not need to be a unicorn to work this way. If you run a shop, a factory, a clinic, a trading firm or a startup, the same logic applies. And if you are about to accept a job, it applies to you in reverse.

Why should a small business check a vendor’s court record?

Because the most expensive vendor problems are the ones that already happened to somebody else. A supplier with a string of recovery suits, a distributor with cheque-bounce complaints or a contractor in insolvency is telling you how the relationship may end.

Unpaid dues are an epidemic, and they end up in court

The Economic Survey 2025-26 estimated that about ₹8.1 lakh crore is stuck in delayed payments to MSMEs, as KNN India reported. When a cheque for those dues bounces, the dispute usually becomes a Section 138 complaint. In September 2025, the Supreme Court recorded that cheque-bounce cases made up nearly half of all pending cases in Delhi’s district courts, more than 6.5 lakh matters, in Sanjabij Tari v. Kishore S. Borcar. Our explainer on India’s cheque-bounce crisis shows how long these cases run.

A buyer with five pending cheque-bounce complaints filed by other suppliers is not a buyer you should give 60 days’ credit to.

Fake distributorships use real brand names

In January 2019, Amul’s parent cooperative GCMMF filed a police complaint over paid online ads offering fake Amul distributorships and franchises, where victims were asked for “registration fees” of ₹25,000 to ₹5 lakh, PTI reported. In 2021, Delhi Police arrested four people accused of running look-alike websites for brands including Amul, Patanjali and Haldiram, linked to about 126 frauds across 16 states, as The Tribune reported.

A legal check on the entity asking for your deposit is the fastest way to see whether it is who it claims to be, and whether other people have already taken it to court.

Shell suppliers and fake invoices

Between May 2023 and January 2024, GST authorities detected 29,273 bogus firms involved in suspected input tax credit evasion of ₹44,015 crore, according to the Ministry of Finance. Many of those firms existed only on paper. A supplier with no footprint anywhere, or one whose promoters appear in fraud and cheating cases, deserves a second look before you book its invoices.

Can court records warn you before a company makes headlines?

Often, yes. Customers, employees and vendors often take a struggling company to court well before its troubles become front-page news.

Take Think and Learn Private Limited, the company behind Byju’s. In July 2024, a law firm sent a demand notice on behalf of 62 former employees for more than ₹2.30 crore in unpaid dues, warning of insolvency proceedings, and Karnataka’s labour minister said 160 to 200 employees had complained about roughly ₹4.5 crore in dues, Business Standard reported. Days later, the NCLT in Bengaluru admitted the BCCI’s insolvency petition over about ₹158 crore in sponsorship dues, as reported.

Now look at the court record. On 5 October 2026, an exact-phrase search of the eCourtsIndia index returned 398 records naming “Think and Learn” as a respondent, 260 of them consumer complaints. Sorted by filing year, 115 had been filed before 2024, and 51 in 2023 alone. Then came 176 in 2024.

Consumer complaints are not proof of insolvency, and many companies with a large customer base attract them. But a supplier extending credit, or an engineer weighing an offer, would have wanted to see that curve bending upward in 2023.

Go First is another reminder for job seekers. The airline filed for voluntary insolvency in May 2023, and by October staff were still waiting for five months of salary, Business Today reported. In January 2025, the NCLT ordered its liquidation. Across India, 8,608 corporate insolvency processes had been started under the IBC by August 2025, according to a speech at the IBBI’s annual day. Our NCLT recovery scorecard shows what creditors typically get back.

What should you check before onboarding a vendor, distributor or partner?

Check the legal entity, every director or partner, and the courts where business disputes actually go: civil courts, consumer commissions, the NCLT and debt recovery tribunals.

What to check	Where it shows up	What it can tell you
Recovery and money suits	District civil courts, commercial courts	Unpaid dues to other suppliers or lenders
Cheque-bounce complaints (Section 138)	Magistrate courts	Payment stress or a habit of post-dated cheques that bounce
Consumer complaints	District, state and national consumer commissions	Service failures, refunds not paid, product disputes
Insolvency petitions	NCLT and NCLAT	Operational creditors or lenders pushing the company toward insolvency
Bank recovery	Debt Recovery Tribunals (DRT, DRAT)	Loan defaults large enough for banks to sue
Cheating, fraud, forgery	Criminal courts	Allegations against the company or its promoters
Labour and salary disputes	Labour courts, civil courts, NCLT	How the company treats people when money is tight

You can open each forum yourself through our guides to NCLT and NCLAT, DRT and DRAT and consumer commissions, or run one LegalCheck that covers them in one report.

Do not stop at the company name

Companies can be shut down and restarted under a new name in weeks. The people running them stay the same. Run a check on the proprietor, every partner, and the directors listed on the company’s master data. Indian business laws often reach past the company to the people who run it, as we explain in why a company director can have fewer protections than a murder accused.

How do you build a vendor check into your onboarding?

Make it a fixed step before the first purchase order or credit limit, document the result, and repeat it for big contracts and renewals. That is what turns a one-off search into a process, the way ElasticRun runs it.

1. Collect the legal details at onboarding: legal entity name and GSTIN, CIN or LLPIN where applicable, and the names of directors, partners or the proprietor.
2. Run a LegalCheck on the entity and each key person. Most reports are ready in one to three minutes.
3. Read findings by role and status. A company that filed recovery suits against its own defaulting customers is in a very different position from one being sued by ten suppliers. The case status dictionary explains the terms.
4. Decide with a simple rule. No relevant findings: proceed. Some findings: ask for an explanation and adjust terms, such as smaller advances, milestone payments or a bank guarantee. A clear pattern of unpaid dues or fraud: escalate or walk away.
5. Save the report with the vendor file and re-check before large orders, renewals or credit increases.

For teams onboarding hundreds of vendors, the LegalCheck API runs the same report inside your procurement or ERP system. If you are comparing providers, our vendor RFP checklist lists the questions to ask, and the legal due diligence workflow is a useful template.

Should you check an employer before accepting a job offer?

Yes. Your employer will run a background check on you. Two minutes lets you do the same, and it is most useful at startups and small companies where little public information exists.

• Search the legal company name on your offer letter, not the brand. Then search the founders or directors.
• Look for salary and labour cases, insolvency petitions at the NCLT, and many consumer complaints. Each says something about cash and conduct.
• Be wary of an employer you cannot find anywhere. In September 2026, Delhi Police busted an alleged fake recruitment racket that charged job seekers a series of fees adding up to ₹25,999, with fake joining letters, PTI reported. A real employer does not charge you to join.
• Keep perspective. Large companies are sued all the time. What matters is the type of case, the trend and whether employees are among those suing.

Our step-by-step guide to finding all cases against a company shows how to do this manually as well.

What this does not mean

• Litigation is not wrongdoing. Active businesses sue and get sued. A company that files many recovery suits may simply be good at collecting its dues.
• A clean report is not a credit rating. It says no matching case was found within the coverage, not that the company is financially sound.
• A name search is not a match. Similar company names are common. LegalCheck separates confirmed, probable and possible matches; check the address and directors before acting.
• The Byju’s figures above come from a name search, not a LegalCheck report, and count records rather than distinct disputes. They show a trend, not a verdict.
• It is not legal advice. For large contracts or acquisitions, take a lawyer’s view of anything material.

Sources and method

• Live counts from the eCourtsIndia index via the eCourts MCP, read 5 October 2026: records tagged “Negotiable Instruments Act | Section 138” (67,20,750; 41,05,440 pending); exact-phrase respondent search for “Think and Learn” (398 records; 260 consumer complaints; by filing year 2016: 1, 2018: 2, 2019: 18, 2020: 10, 2021: 9, 2022: 24, 2023: 51, 2024: 176, 2025: 79, 2026: 28). Name searches can include similarly named entities.
• Inc42 on ElasticRun; Business Standard, 5 and 16 July 2024, on Byju’s; Business Today, 26 October 2023 and 20 January 2025, on Go First. Read 5 October 2026.
• Business Standard / PTI, 16 January 2019 (Amul); The Tribune / PTI, 6 September 2021 (fake brand websites); Business Standard / PTI, 7 September 2026 (fake recruitment racket). Read 5 October 2026. Arrests describe allegations.
• PIB, Ministry of Finance, 7 January 2024 (bogus GST firms); KNN India, 29 January 2026 (Economic Survey 2025-26); Supreme Court, Sanjabij Tari v. Kishore S. Borcar, 2025 INSC 1158; IBBI annual day speech, 1 October 2025. Read 5 October 2026.
• Testimonial shared with eCourtsIndia by Shitiz Bansal, ElasticRun, September 2026.
• LegalCheck price from ecourtsindia.com/api/pricing, read 5 October 2026.

Frequently asked questions

Every business relationship starts with trust. Make sure it is trust you have checked.