• Non performance of business contract

Hi Sir,

I have a business of trading in fruit juices on own private label. I outsource manufacturing and job work and use my own private label on the product.

I had selected a new manufacturer (pvt ltd company) from tamilnadu and agreed for an order of 10k bottles. A purchase order was duly signed and sent by him with all the payment details and terms and conditions. No other contract was executed. Advance payment done online through bank account.

As per the purchase order, the order was supposed to be delivered by 25th of May, 2016 but the timeline was missed and after multiple discussions we had to ultimately cancel the order on 20th July 2016.

I requested him to return back the advance money along with my bottle mould but he says he cannot arrange the money right now and might take more than a month's time.

Can I send a legal notice for speedy recovery of money and claim the damages cost to me because of the delayed timeline based on the purchase order and bank transactions ?

Please let me know if there is any additional means to recover my advance and claim damages.

Asked 2 years ago in Business Law from Hyderabad, Telangana
1) you can issue legal notice to supplier to return advance money paid by you with interest on account of his failure to deliver goods on time 

2) you can file summary suit under provisions of order XXXVII of code of civil procedure 

3) if you want to claim damages then instead of summary suit you have file suit for damages for losses suffered by you 
Ajay Sethi
Advocate, Mumbai
45738 Answers
2692 Consultations

5.0 on 5.0

You can issue a legal notice and demand the advance amount. You can also claim compensation for delay and damages happened due to non performance of contract.If they are not ready and willing to pay back the amount then file a suit for realisation of advance money based on agreement 
Ajay N S
Advocate, Ernakulam
2769 Answers
47 Consultations

5.0 on 5.0

In order to recover your money, you can issue legal notice and also proceed by filing a Summary suit under  Order 37 CPC(which is  the fastest way in indian legal system to recover your money without wasting months/years in courts. 

Order 37 CPC is one of the best provisions in the hands of a proposed Plaintiff, wanting to institute a Civil Suit. Broadly it states as under:
Rule 1, Sub-Rule 2 makes it applicable to all suits upon bills of exchange, hundies and promissory notes or the ones in which a Plaintiff seeks only to recover a debt or liquidated demand in money payable on a written contract, an enactment, where the sum to be recovered is a fixed sum of money or in nature of any debt except penalty, a guarantee - in respect of a debt or liquidated demand.

Rule 2 requires an Order 37 Suit to contain among others, a specific averment that the Suit is filed under this Order and no relief which does not fall within the ambit of this Rule is claimed.

The real benefit of an Order 37 Suit is that unless the Defendant is able to demonstrate that he has a substantial defence in his case, the Plaintiff is entitled to a judgment immediately. This in layman’s language means that the stages of filing a WS within 30 days and not later than 90 days, a rejoinder thereafter, admission/denial of documents, framing of issues by Court, leading evidence, cross-examination by parties, final arguments and then finally the judgment/decree, in an ordinary Civil Suit gets eliminated. So all that a Plaintiff has to show is that it is a case which falls within the ambit of Order 37. Once summons is issued, the ball is in the Court of the Defendant to show that he is entitled to a leave to defend, on grant of which the Order 37 Suit becomes an ordinary Civil Suit and the Defendant is then directed to file his WS within 30 days

Hope this helps. 
Rajgopalan Sripathi
Advocate, Hyderabad
1307 Answers
161 Consultations

5.0 on 5.0

You should first ascertain that if the contract or agreement between you both broke because of breach of conditions or it was dropped on mutual consent.

If it was dropped due to mutual consent what was the terms for repayment of the amount that was sent to him?

Whether he honored the terms for repayment or is dodging the same ?

Do you have the amount mentioned in the agreement papers and the conditions for return the amount if the contract is terminated for any reason?

What are the conditions of the contract for return of the money deposited with the supplier for this purpose.?

You may have to consult a local advocate with al the above details and issue a legal demand notice first and then think about processing legal action for recovery of your amount as per law. 
T Kalaiselvan
Advocate, Vellore
35910 Answers
390 Consultations

5.0 on 5.0

Yes issue a lawyer's notice for refund of money to him, and if he does not do so then file a suit for recovery of money with interest and compensation for mental agony. This is the only means permissible within the law to recover the money.
Ashish Davessar
Advocate, Jaipur
22977 Answers
634 Consultations

5.0 on 5.0

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