• Investment not returned and also the profit

Sir, I'm Musaddiq Ameen age 26 from Tamilnadu and I have bought a sum of 8.4 lakh from siddiq from Kerala as a investment for my business and agree to pay profit mentioned in the agreement that I will give 17 % monthly profit.
First month I have given 42000 as a profit and up to date for 3 months I didn't give any profit to him due to heavy loss in my Leather Business.. I'm doing all my business in without Bill.
The party has agreement and cheque of 9.4 lakh and all my proofs.
My and my family position is not so wealthy to return his amount at this time
I didn't understand what should I do please help me
He is saying he will give file a case
Asked 1 year ago in Business Law from Vaniyambadi, Tamil Nadu
1)it is necessary top peruse agreement signed by you with Mr sidiqqi 

2) you would be liable to pay profit at 17%of earnings only if business runs at profit . but if losses are incurred you dont have to pay monthly profits

3) if you fail to repay your investor the he  will file suit to recover money paid to you with interest

4) seek time to make payment 
Ajay Sethi
Advocate, Mumbai
33659 Answers
1858 Consultations

5.0 on 5.0

Since you have agreed to give him return on the agreed rate , you have no other option to make breach of it unless there is any terms of your escape route in the agreement.
If not then he can file civil and criminal case to recover his dues.
So better sit with him and reach to an amicable settlement.
Devajyoti Barman
Advocate, Kolkata
8904 Answers
108 Consultations

5.0 on 5.0

1) in case suit filed by Mr Siddiqui filed detailed reply . engage a local lawyer 

2) suit would take years to be disposed of 

3) after one year you can settle with Mr siddiqui and repay loan amount with interest . file consent  t rms in court 

4) suit would be with drawn by Mr Siddiqui 
Ajay Sethi
Advocate, Mumbai
33659 Answers
1858 Consultations

5.0 on 5.0

It becomes your duty to meet your commitment of business or loan payments.
The loss of business cannot be attributed to the person who has given you loan nor can you quote that as a reason for nor payment of loan or its interest.
If it was an investment from the other person you may explain him about the losses in the business and agree to return his amount in a time at a later stage and may even enter into an agreement with him for repayment with terms about interest etc. 
If you do not have any partnership agreement or business agreement or investment agreement or any other evidence to prove that he had invested this money for business only and if you do not have any evidence for doing the said business, your partner will change his status as creditor and you a borrower. With the help of the documentary evidence in his possession he may sue you for recovery of his money. Therefore settle the things amicably by agreeing to repay the borrowed amount in a date convenient to both at a later stage.
T Kalaiselvan
Advocate, Vellore
23680 Answers
233 Consultations

5.0 on 5.0

At this time I don't have money to repay his amount 
I want at least one year time to repay his amount and also profit
What should I do now

As suggested above, you should talk to him  and arrive at an amicable situation by assuring him of repayment  and if necessary, you may even execute a promissory note in his favor with terms for lower rate of interest.
T Kalaiselvan
Advocate, Vellore
23680 Answers
233 Consultations

5.0 on 5.0

What you should do now is persuade him to give you the time that you require to repay his principal amount with interest. Since there is a written agreement he may file a civil suit for recovery of money against him in the event of default whereupon the court can pass a decree of recovery against you.
Ashish Davessar
Advocate, Jaipur
20750 Answers
549 Consultations

5.0 on 5.0

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