You can go for cancellation of the same but you may be liable to pay as per the penal clause of the contract if any to the other person
Sale agreement cancellation
I had a contract with one party in Mangalore to invest in cashew factory for raw material of 31 lakhs in August 2017, as per the agreement (they will manage the business ,I am the silent invester) profit and loss will be shared on 40% and 60% with each other,My share of loss/profit will be 40%.I am first timer in this kind of business ,and never been into business before this.So in December 2017this same party asked me for a additional investment of 19lakhs, so my share of profit/loss can be raised to 50%i agreed and paid additional 19lakhs for raw material as per agreement.january 2018 onwards this pary started to delay my payments for profits,then finally they paid my share in April after much harrassment.In the months of may ,June ,July August September October , this pary made loss in business.anf therefore no profit came , I told them to return my money ,to which their reply is they spend it and instead I can buy the factory , with no option left I decided to buy . they quoted 1.30 crore for the factory,I agreed and made lawyer agreement with them remaining money to be raised by loan by bank ,so bank arranged a valuer for property ,as per valuer property valuing only 46 lakhs so they can't be financed ,so told the party to cancel the deal ,but they insist me buy it anyway ,as that is the agreement.what to do now ,I don't want to go ahead with this deal ,as I sense there is some foul play,and intention to cheat me , what is my actions should be ?
Asked 7 years ago in Business Law
8 Answers
1) it is necessary to peruse agreement signed by you with seller to advice
2) if you have agreed to buy factory for 1.30 crores then agreement would be binding upon you
3) if title of seller is not clear and marketable then you need not purchase the factory
See you can file a suit for cancellation of the agreement citing the ground that fraudulently they induced you to by telling false value of the property in the circumstance that they owe you lot of money if the court appreciate the fact the agreement can be cancelled.
Dear Cleint,
I think you are victim of cheating and fraud. Without delay, file criminal complain and get the accounts audited by independent auditor to find out, profit and loss and if invested money actually contributed in business or personal use.
And it will be dumbest step, if go ahead for purchase. Even through the agreement is illegal as executed by playing fraud by showing such less value property in crore.
the party cannot force you to buy
it was a distress sale by them as they made losses
so even if there is an agreement to buy the factory by you, they cannot enforce that against you
the bank's valuer valuing the property at almost more than 50% less price than the quoted price, itself speaks volumes
the party cannot be entitled to take advantage of their own wrongs
this is like putting a premium on cheating
You made mistakes before going for the deal you would have got the valuation of the business so as to decide the value to be paid to acquired the business now as you enter in the agreement the party can go for specific performance of agreement in the court and force You to complete the transection.
If you wish to contest the the agreement then you have the excuse that they have cheated you by taking 50 lakh rupees from you and did not informed you about the status of the business and finally cheated you to get the inflated value of the business.
Asserted evaluation by the bank the actual value of the business is known and that is the reason I am unable to go ahead as I don't have font and bank is not ready to let main get the finance to acquire the business.
If the sale agreement is not by a registered document then you need not be much concerned about it.
You can simply give a notice to them ccmmuicating your decision to cancel the agreement since the property has been valued at a very low price by the bank hence it is not affordable to purchase the property at the high rate quoted and demand the advance amount already paid to them.
Failing to respond, you may drag them in a civil suit for recovery of money
When the value assessed for just 46 Lakhs, How they can pressurise for 1.3 Cr?. You can initiate legal notice stating all the evidences and claim the factory for 46 Lakhs, so alt=ready you have invested 25+19, means 44 Lakhs. Pay balance 2 lakhs and claim the factory.
