1) you cannot cancel agreement without giving refund to buyer
2) you cannot sell pipe manufacturing unit without giving notice to buyer
3) you cannot deduct the deprecation towards plant and machinery
What further action should be taken?
Please read the matter again and give your opinion: Our Firm was declared NPA by SBI. Partners had transferred 100% partnership holding of the firm in my favor for Sale of Assets to repay Bank loan outstanding. My wife was made the second designated partner & ROC Gawalior approved the changes. A buyer and four ex- partners had met Bank officials for total loan outstanding of Bank. Based on information provided by them the agreement for sale of Assets was signed with the buyer on 18.10.2016. Ex-partners were signatory in the agreement as they had to pay loan outstanding. Buyer was to pay Rs 303 lakhs and ex-partners Rs 80 lakhs through sale of their mortgaged properties (total Rs 383 lakhs). I shifted to Mumbai after signing agreement. But neither Buyer nor ex-partners followed the terms and conditions of agreement signed. Cheque given by buyer had bounced. Buyer did not submit copy of agreement to SBI for endorsement as per agreement. Buyer as well as ex-partners did not repay the entire loan outstanding by November 2016. Buyer & ex-partners did not reply to the letters sent to them. Bank informed that agreement signed was not valid. Bank also informed that total outstanding loan amount was Rs 337.36 lakhs instead of Rs 383 lakhs. This was a fraud. Buyer as well as ex-partners deposited Rs 306.42 lakhs instead of Rs 383 lakhs. Bank had offered One time settlement to the firm but I could not accept the offer. Bank however accepted the letters from the two guarantors, wives of two ex-partners, for OTS. Three ex-partners got their mortgaged properties released in collusion Bank officials without my consent as First Partner & MD. The value of 3 properties was Rs 140 lakh, 100 lakh & Rs 40 lakh. Bank had subsequently issued the NOC on the loan outstanding on dated 04.04.2018. Buyer gave letters to me to transfer the asset of the firm as loan of Bank had been paid. My Bhopal based advocate had issued a legal notice to the Buyer to pay the remaining amount of approx. Rs 76.58 lakhs as per the agreement signed. The buyer has replied that one time settlement was given due to his efforts. Buyer does not intend to pay the remaining amount of money but wants that assets should be transferred to him. No further action has been taken by him. A criminal case has been filed at Bhopal District court against Buyer, Ex-partners and Bank officials for the fraud committed by them. Another buyer is interested to buy the facility and I intend to sell the same to him. What further action should be taken by me? Please give your own opinion? Also let me know that: 1. Can we cancel the agreement without making any refund to the buyer? There is no clause in the agreement to terminate the agreement? 2. Or should we cancel the agreement & refund the payments made by him to Bank after deducting the depreciation on plant and machinery for two years? 3. Can we sell the Pipe manufacturing factory without giving any notice to Buyer?
Asked 5 years ago in Business Law
6 Answers
1) One need to return the amount taken from buyer whether it has mentioned or not clause of termination.
2) Yes, you can do that.
3) No, you have to inform first bank and buyer.
1. you cannot cancel the agreement without refunding the buyer for what he paid to the bank. Also the buyer may not accept the refund and require you to transfer the asset
2. same as above
3. you cannot do
plz file a suit for specific performance of agreement to claim balance amount from buyer as per agreement
I have already answered you can do all.of.the above only if there is no injunction of Court to do so against you. Can you cancel the agreement unilaterally? Does your agreement gives you that power? You can do that. If the buyer is not a affected party or not bound by you with any agreement to so the same you can sell it. Only if any stay is not there for such sale.
1. Can we cancel the agreement without making any refund to the buyer? There is no clause in the agreement to terminate the agreement?
Answer: You can cancel the agreement provided certain terms of the contract are violated and there is proof of the same;
2. Or should we cancel the agreement & refund the payments made by him to Bank after deducting the depreciation on plant and machinery for two years?
Answer: You can ask for the loss due to depreciation in the value of plant and machinery;
3. Can we sell the Pipe manufacturing factory without giving any notice to Buyer?
Answer: No you will have to terminate the contract with the buyer. You may also need a Deed of Cancellation. Once that is done, then you can approach another party. If you do not resolve the issue with buyer, he can file a suit saying you are creating third party interests.
1. If you want to entertain a fresh buyer then it is advisable to cancel the previous agreement of sale and intimate the previous buyer by a written communication to protect your interests.
2. This is a better option, you may look for the feasibility in this regard.
3. you may have to take the advise of your advocate in this regard because he is the person who is aware of the entire background of the case
