Business alliance dispute
Krishna
(Querist) 31 December 2014
This query is : Resolved
Hello Experts
My friend was running an business for over 2 years. I wanted to join him as a Partner. So, as a first step, we signed an Basic Understanding Agreement (BuA) on Feb 2013 on Rs.100/- stamp paper. I even notorious it but did not Register the document.
I invested Rs.2 lacks. We even decided that, this BuA will become the basis for MoU to be signed in future date. Per this agreement, both the parties had an OPTION to back-off from this arrangement on or before 15th June 2013 with out any question. And also, this agreement has a clause where it says that I have made this decision to join the business on my own risk.
The idea was, I shall quit my Part-Time employment, join his business and then I was given SPECIFIC responsibility to generate revenue to business.
However, from Feb 2013 I did not participate in business, I did not perform any of the specific responsibilities given to me and I did not contribute to business or to the revenue etc.
After 3 months of signing the BuA i.e. May 2013, I decided to take up an an Overseas Employment. Informed my friend just 2/3 days before my departure. He was very upset, but I continued with my employment.
One Year later i.e. February 2014, I came back to India on vacation and met my friend w.r.t Business. He informed me all that has happened between May 2013 and February 2014 (in writing) how he underwent huge business losses.
My friend also informed me that, there was a need to infuse additional Rs. 15 lacks in to business to ensure continuity and I should actively participate at least from now onwards. He proposed that I pay off 50% of Rs. 15 lacks. I refused to pay additional funds into business and I refused to quit my Overseas Employment even as my friend told me that, if we do not infuse the required funds Rs.15 Lacks, then the business has to be closed down.
I did not provide additional funds. I again went back on my Overseas Employment. Some time in March/April 2014, he informed me that due to heavy losses accumulated in Y 2013 and also, due to shortage of funds, he closed down the business.
I came back to India in December 2014. I know he has closed down business in April 2014. Now I asked my friend to RETURN my investment. He is telling me that there are accumulated LOSSES and I need to share 50% losses. He is further refusing to give back my investment.
My friend is telling me that I have failed and defaulted to fulfill the role, responsibility, investment and also, failed to addressing business exigencies and also, If I wanted my investment money back, I should have told him the same on or before 15th June 2013 in writing.
My friend says, he can neither pay 18% interest as this was not the understanding per BuA and can’t refund the money back as business underwent loss and is closed now.
WHAT ARE THE KIND OF LEGAL OPTIONS I HAVE.
CAN I RECOVER THIS MONEY FROM HIM.
Please ADVISE.
Anirudh
(Expert) 31 December 2014
This is what happens whenever people do things without appropriate legal advicen at the right time.
In the given situation you have to give up the hope of Getting any penny (capital or interest whatever.)
Guest
(Expert) 31 December 2014
Better You Consult a Local Good advocate with all the papers you have and Seek a Solution.
Guest
(Expert) 31 December 2014
Advice possible only after going through the contents of the BuA.
ajay sethi
(Expert) 31 December 2014
your chances of recovery of money are bleak
Krishna
(Querist) 31 December 2014
Little explain Sir please..
Krishna
(Querist) 31 December 2014
Little explain Sir please..
ajay sethi
(Expert) 31 December 2014
business has run into losses . it has closed down . if any profits were made in running the business you could have claimed share as per terms of your agreement . you did not generate any revenue for business as per the agreement . you have failed to fulfill your obligations under the contract
Devajyoti Barman
(Expert) 31 December 2014
To try your luck you can file a suit for dissolution of partnership and for rendition of accounts.
Krishna
(Querist) 31 December 2014
Sir he is latching on to 3-4 points.
1. He says I have not participated in business, not fulfilled specific responsibilities and have not contributed to business revenues
2. He says I have not given enough reasonable notice and giving 2-3 days notice just before departure is unacceptable.
3. He says that he informed me in Feb14 about the loss incurred in Y2013 and also informed me in Feb 14 that unless additional funds, business can't carry on. So he is asking me to share the business loss to the extent of 50%
4. He says that after being part of the business, since I did not participate, since I did not bring revenue, since I did not make promised investment, he says I am also one of the reasons for business loss and cloaure
5. He says that per Bua, I should have made my intentions clear before 15 June 13 fir claiming refund which I have not done till date. So he says you are part of the business and I need to shoulder losses as well.
5. Now he says he can't refund investment and he is looking out for employment
This agreement is notarized and not registered.
Devajyoti Barman
(Expert) 01 January 2015
Non registration of partnership agreement is no hurdle to settle dispute among the partners inter se.
File a suit if you want resolution through legal recourse.
Anirudh
(Expert) 01 January 2015
If you move the court you will be the biggest loser. By approaching court you will only be helping your friend. Think thousand times before approaching court.
Guest
(Expert) 01 January 2015
Efforts will have Its Own Results.
Krishna
(Querist) 01 January 2015
Sir's
There are TWO kinds of opinion coming out here from various experts.
Some of you are saying that, go to court and recover your money.
Some of you are saying you can not recover money legally, so no use going to court.
Which OPTION has very high possibility?
Which one should i follow?
Guest
(Expert) 01 January 2015
Better You Consult Local Good Advocate Show him the Papers you Have and Explain and Seek the Best Direction.
Anirudh
(Expert) 01 January 2015
In fact it is the persons who suggest to approach court have to give good reasons for their view.
I can give counter point for each.
Thereafter you can decide which option to select.
To my knowledge you have posed a very pertinent query. If only everybody starts asking then the quality of this LCI will go up tremendously.
Guest
(Expert) 01 January 2015
Unless and Until a Local Good Advocate Goes thro All your Documents,Transactions Etc the Right Direction Can not be decided.Inspite of your statements the Good Advocate might be able to find some Possiblities,Better Discuss and Finalise your Decision with Local Good Advocate.
V R SHROFF
(Expert) 01 January 2015
not clear whether you are a PARTNER??
Any Partnership Agreement??
Need to go thru all details of Basic Understanding Agreement (BuA) on Feb 2013
do it impose liability on you??
RX: do not pay further
Investigate transactions ?? how he incurred loss? who financed all 15L for loss
Seems your business associate wanted to cheat you and other for millions, syphoning money in his pocket indirectly ,, luring you for further investment, pushing repayment liability on you..
You did not consult Lawyers at the time of investing 2L
Now engage local lawyer, let him study all doc+ all account details, how he fooled you,his plans .. or he devised plan to make loss??
Let your lawyer decide if recovery possible??
I personally feel, you were trapped, and going ahead will further incure expenses without any recovery or gain.. , BUT your advocate will guide you better after scrutiny of all relevant documentation ans accounts
Krishna
(Querist) 01 January 2015
Sir's
In fact I even checked his Y 2013 earnings i.e. From Feb2013 to March 2014.
His expenses in managing the office Per Annum was appx Rs. 12,00,000/- (I have the breakup) and the revenue he generated in my absence is appx. Rs. 200,000/- plus my investment of Rs.500,000/-, So, total income Rs.700,000/- With this money, he has managed till Aug/Sep 2013.
He failed to make payments to two vendors and has not paid building rent etc, since October 2013.
So, the loss is the accumulation is business not doing good as well as outstanding payments. And in March 2014 he closed down the office.
under these circumstances, how do I manage to recover my investment.
V R SHROFF
(Expert) 01 January 2015
NO BUSINESS AND "His expenses in managing the office Per Annum was appx Rs. 12,00,000/-"
UNBELIEVABLE..
JUST DON'T PAY ANYTHING & KEEP QUITE.
AS PRT FIRM NOT REGD; NO REMEDY ..
Krishna
(Querist) 01 January 2015
Dear Sir's,
1. We signed an Basic Understanding Agreement (BuA) on Rs.100/- stamp paper. I even notorious it but did not Register the document.
2. No Partnership Agreement Signed. No Partnership Firm registered.
3. I have made payment into Company Account through bank. Bank Transaction available.
4. My friend has maintained only One Bank Current Account, which he used for business as well as Personal. Approximately he has used Rs.300,000/- in the year 2013 and 2014 for personal use. He has disclosed it.
5. My friend has an Business Payment outstanding amounting to Rs.700,000/- which he has not paid. The Creditors are behind him for recovery.
Under these circumstances, there are no REMEDY for recovery of my Investment?
Please advise.
Guest
(Expert) 01 January 2015
Dear Krishna,
Remedies are always there in one or the other way, provided you allow someone to go through your papers to analyse them to find some legal or amicable solution.
Repetitions of your own understandings has no relevance and will not bring any fruit unless you show the case related papers to some expert, as your own understandings and interpretation of the language/ contents of the BuA by the expert may have wider difference.
Further, there is no marked difference between a MOU and BuA. BuA is as good as a MOU and implications of the BuA has to be understood properly only by going through that by any expert before giving you an appropriate advice.
Rest depends upon you, if you want just to stretch the thread to any extent unnecessarily.
Krishna
(Querist) 01 January 2015
Sir's
how do i attach the document here for your review. may be that will help all of you to give your opinion.
Guest
(Expert) 01 January 2015
Show to some local expert or send through email to any of the experts outside your town.
T. Kalaiselvan, Advocate
(Expert) 02 January 2015
As advised by experts, instead of further stretching your query here get it resolved by consulting a local advocate by producing all the relevant papers before him and understand the issues involved in it and proceed.
Hemant Agarwal
(Expert) 03 January 2015
1. Looks like Shree Krishna'ji is "beating around the bush", that too AFTER the bush-bird has flown away.
2. Approach the Courts and spend some more few lakh rupees and another 10 years and then come back frustrated with a dismissal order. Maybe a off-shoot of self-greed. Better to make a film or TV serial with such stories.
Henceforth invest in Govt. Bonds, get secured principle and interest thereon.
Keep Smiling .... Hemant Agarwal
READ ARTICLES ON: http://hemantagarwal21.blogspot.in/?view=sidebar
Krishna
(Querist) 03 January 2015
Mr. Hemant Agarwal ... Request you to maintain certain amount of decorum on these public forum. If you are incapable to answer my query technically then better don't expose your I decency. Am hurt the way you have written here. It brings disgrace to Experts.
