• False claims on machine capacity

I am currently CEO of a construction material producing company and we have bought a machine from one of the leading Engineering companies in India with a Japanese collaboration . The Indian company has given wrong commitments and false promises and sold the machine at 6 cr to us. We have taken a term loan to buy this machine and paying around 9 Lakhhs per month as EMI . During commissioning it is found that the machine can give only 50% of what is promised to us . But this company has been dragging the issue by taking so many trials and waster 2 years and finally saying it is not possible. We have lost precious time to do business and now we also realize this company has done the same with another 4 to 5 companies and they are also suffering the same way . We wish to seek legal advise to claim refund for the machine and also claim damage for opportunity loss . Other companies who are also suffering the same way can we help them to create a consortium of claims from the machine supplier. Can we approach NCLT or Consumer court or file Criminal complaints as it comes under cheating / breach of trust and intentional manipulation of information for gain
Asked 11 months ago in Criminal Law
Religion: Hindu

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14 Answers

- Since, that machine is not as per the promises / configuration which was mentioned at the time of agreement ,hence the said both the companies are under obligation to refund the entire amount with interest or to replace the same.  

- You can send a legal notice to them for the same , and if no positive response then file a compliant before the Consumer Forum for getting refund and to claim compensation for mental harassment and loss . 

- Further, if there is an agreement , then you can also lodge an FIR against them for cheating and breach of trust. 

Mohammed Shahzad
Advocate, Delhi
13211 Answers
198 Consultations

5.0 on 5.0

1) issue legal notice to company to replace defective machinery as it is working at only 50 per cent capacity 

 

2) if company refuses to replace file case of cheating and criminal breach of trust against company and its management 

 

3) also file civil suit for damages 

Ajay Sethi
Advocate, Mumbai
94692 Answers
7527 Consultations

5.0 on 5.0

Section 2 (7) (i ) of Consumer Protection Act, 2019 excludes a person who obtains goods for resale or for any commercial purpose from the definition of consumer. Goods includes machinery. Criminal case for cheating will not stand as the transaction is commercial. Your remedy is civil suit for breach of contract/promise. All affected parties can join in one suit against the supplier.

Ravi Shinde
Advocate, Hyderabad
4041 Answers
42 Consultations

5.0 on 5.0

The relevant records, correspondences etc. are required to be looked. Since machine was purchased for commercial purpise hence you you and your company does not fall within the definition of consumer so in given circumstances Consumer complaint is not made out. Case before NCLT under IBC is not meant for recovery. Proceeding under IBC arise when if Indian company's liability is more than its assets and if Indian company is unable to pay its debts etc. In given circumstances firstly damages and losses are to be assessed and thereafter to issue legal notice claiming recovery. If there are clauses of Arbitration then Arbitration shall be invoked otherwise case shall be required to be filed under commercial court Act. Other remedies and possibility of criminal cases etc could be suggested after examining details. If required consult with detail.

Siddharth Srivastava
Advocate, Delhi
1240 Answers

5.0 on 5.0

It is not known that the seller had given you the proper description and details of the functions of the machine bought by you through a brochure or a document certifying the capacity and performance of the machine and whether the company has guaranteed against the machine sold.

Whatever since the item purchase was used for commercial purpose it may not com under the consumer protection act hence your complaint before the consumer redressal commission may not be entertained.

Hence on the basis of the said documents and the correspondences/communications you had with the seller in this regard, you can file a suit for recovery of damages including the due to the mental agony caused as a result.

Before that you issue a legal notice to the seller and demand return of your purchase amount by taking back the defective machine or to compensate agaisnt the losses you suffered due to this faulty machine.

After that you can issue take appropriate legal action as per law.

T Kalaiselvan
Advocate, Vellore
84893 Answers
2190 Consultations

5.0 on 5.0

You can go before consumer court for refund and compensation and file FIR for cheating 

Prashant Nayak
Advocate, Mumbai
31930 Answers
179 Consultations

4.1 on 5.0

you can send email or legal notice to company for refund of money paid by you with interest 

Ajay Sethi
Advocate, Mumbai
94692 Answers
7527 Consultations

5.0 on 5.0

The legal notice is to be sent either through your corporate channel or through a lawyer demanding compensation for the losses you suffered and the damages as assessed.

You should not delay the subsequent legal action to avoid it being barred by limitation.

The damages suit can be filed within three years from the cause of action, hence you may have to hasten the legal action.

 

T Kalaiselvan
Advocate, Vellore
84893 Answers
2190 Consultations

5.0 on 5.0

There is no reason to discuss further. Nevertheless, discussion can be held by other party at any stage. Your agreement is required to be examined to suggest remedy. Since your case is commercial in nature so you shall be required to go under commercial courts Act which stipulate pre- litigation mediation so if other party would be interested then in mediation they can come for settlement negotiation. Sent a proper legal notice through competent advocate. 

Siddharth Srivastava
Advocate, Delhi
1240 Answers

5.0 on 5.0

This can be brought t in purview of consumer court but you need to file it wiithin limitation of 2 yrs. consumer court will be fastest remedy for you. You can call me through kaanoon for consultation and I will asssit you to send legal notice 

 

sir if you need any further assistance for the same.You can approach me through Kaanoon or LinkedIn.

https://www.linkedin.com/mwlite/in/prashanth-nayak-5477b138

You can ping me on 09 yu 769 fg 490 ghj 911

 

 

Prashant Nayak
Advocate, Mumbai
31930 Answers
179 Consultations

4.1 on 5.0

Since the company has committed fraud with many other companies, this is ground of cheating as company is involved in this business.

File FIR by including other victims companies. Recovery possible only by way of settlement for not filling FIR otherwise civil recovery for amount paid and claim damages.

No consumer case made out.

final discussion - instead send legal notice, gather all the victims and joint operation to create pressure. 

Yogendra Singh Rajawat
Advocate, Jaipur
22630 Answers
31 Consultations

4.4 on 5.0

- yes, you can claim compensation for the said loss .

Mohammed Shahzad
Advocate, Delhi
13211 Answers
198 Consultations

5.0 on 5.0

Dear client,  

Yes, you can send a legal notice to the company stating your claims for a refund of the cost of the machine paid with interest, as well as the opportunity loss cost for two years. This notice can be sent through a lawyer or on normal corporate communication. The notice should clearly state the grounds on which the claim is being made and should also mention the consequences of non-compliance. If the company fails to respond to the notice or does not agree to your demands, you can then file a civil suit or criminal complaint as per the advice of your lawyer.

Anik Miu
Advocate, Bangalore
8854 Answers
110 Consultations

4.7 on 5.0

Terms and conditions of the contract shall govern. If there is an arbitration clause in the contract the same can be invoked stating violations of the clauses of contact and claim damages caused due to such breach of terms of the contract. 

Since your query mentions that similar is the situation with other 4-5 companies, they can initiate a class commercial suit for recovery of damages and ask compensation from the defaulter company and if there exists a valid contract between the same company and the buyer 5 companies then all these can be combined referred to arbitration tribunal. 

 for detailed guidance please share the purchase contract. 

Pooja Ashar
Advocate, Ahmedabad
232 Answers
4 Consultations

5.0 on 5.0

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