Issue with contract execution & not performing as per commitment
I have a propertership firm registered in Punjab
In Jun 2018 i got into an agreement to start a store at pune, the franchise(pvt ltd comp ) paid me 12.5 lakhs to start the store .As per agrement we have 50-50 share in store for operation expenses and profit.Due to some reason, i could not start the store like delay in my ice cream procurement,my personal issue, all other reason which led to delay.
I signed an agreement with the mall where the store has to come up , the franchisor wanted to exit the business as the store was getting delay due to reason beyond my control.
So i proposed a new deal where the franchise will invest 100% , i will be responsible for all operating expenses , taxes and i guaranteed franchisor a minimum of 50,000 regardless of the store made profit or loss.
I also promised in the mail to the franchisor that i will start within 30 days i.e before june 2019 and regardless that minimum payment will start on june 5 2019 .
So a new agreement was made in may 2019, for security have given 6 cheques for 50,000 as part of the minimum guarantee that i promised and also some cheque for 22 lakhs dated June 2020 just ensure confidence in the franchisor, i orally mentioned he could encash the 22 Lakhs cheque if i don't start the store . In the agreement i have mentioned they own all the equipment and also the store deposit belongs to them .
Now my problem is the franchise has paid me 82 % of the total funds needed to start the store , but the store is not ready yet . I may need another 15 days to start. The other party is not ready to pay me till they see the store is ready for launch as they waited for one year and no longer have confidence in me .
They encashed the first cheque but it bounced due to lack of funds, now i am in a situation where the mall is asking me for rent and the franchisor is not ready to pay me till the store is ready.
Just to cool the other party i paid 42k(first month minimum guarantee) and asked them to pay the balance 18% , but they are not ready to pay .despite i paid them 42k
My question is :
1. i transferred them 42k without them having paid me the full amount, can i file a case against them for not paying 100% of the money to start the store .
2. I have given them 6 cheques and one cheque dated for next year, so can they file a recovery suite on these cheques. Can they prove to the court that i owe them this money ?
3.my part i delayed 1 year but i need fund to start the business ?can i deny them ownership in store and the minimum guarante post the store is started?
4. the actual store opening cost has shot up ,i have invested more than what franchise has paid me , so if they dont pay me now . once the store starts can i deny the ownership in the store and also not pay them the minimum guarantee and also the capital they invested.
if i exit venture complety without startng store , who has stronger case here and can they recover money from me ?
Asked 3 years ago in Business Law
can they also file a recovery sute for 22lakhs cheque dated next year , this particular cheque i have not mentioned in contract that they can deposit or use . I mean if i dont pay them the minumum guarantee for next one year/ nor i return there invested money can they use the cheque that is dated june 2020 .
also for june-2019 month after cheque bounce i paid them 42k , instead of 55k(propotional to there investment) . can they file recovery suite even on this cheque and claim the entire 55k ?
how long can i drag this case ? if i dont want to got for out of court settlement . Can this case in anway effect my master license .
I also owe the mall 18 lakhs , can i incude them as party to this payment , in the contarct its clearly mentioned ists my responsiblity and also i mail to mall i have mentioned that i will be responsible and only i have sigend agreement with the mall.
s per my discussion with Divya in the evening today, we will commence the fit out at the mall within the next 3 to 4 days. We already have all the formalities we need to complete and I will have Divya and Ameen coordinate with my architect and fit out company tomorrow.
Also I would like to introduce my Partners for the outlet as we are operating the site through a FOCO model and my partner run a company called xxxx . They are based abroad and Hence our Master Franchise Hospitality will be running the entire show and will be liable for all related expenses.
Asked 3 years ago