Company law - non judicial agreement
Adil
(Querist) 22 June 2014
This query is : Resolved
Hello Everyone,
I have few questions and I would really appreciate if some of the experts can help in getting answers for the same. Below is a brief description/background
A New Delhi based public listed company sings a contract with few schools in Uttar Pradesh, for a period of 5 years to provide educational services to the school on "Non Judicial" Stamp paper. After giving service for initial 6 months, the company defaulted numerous times on the service part. The company is struggling financially due to which they are unable to provide service. This has happened not only with one school but with 90% of the schools across country.
On the other hand the school has been a good pay master and never defaulted on the EMIs. Now after being fed up with the services, the school has decided to terminate the agreement on their own. My questions are as follows:
1) Is the agreement done on Non Judicial Stamp Paper legal and can company use it in the court of law to sue the school for not adhering to the terms and conditions of the agreement?
2) What are the options school has now to get out of this situation and cease the agreement?
3)What are the possible options the company has in this case which can be used against the school?
PS: The school has all the documents(Emails) which can be used to show that the services have been delayed so much that it could effect the students future. Plus school also has the documents which shows that the company has defaulted multiple times on the commitments made by them to service the school properly.
Please answer point wise. Thank you to everyone in advance.
Devajyoti Barman
(Expert) 22 June 2014
1. Yes
2. breach of agreement
3. agreement needs to be seen to answer this query.
Adil
(Querist) 22 June 2014
Thanks. I will shortly upload the copy of the same
Kumar Doab
(Expert) 22 June 2014
Agreed with. Barman.
The option of attachment is not provided by LCI admin in ‘Experts’ section, hence you won’t be able to attach.
You can copy and paste in your next post.
Adil
(Querist) 22 June 2014
ok ......
Adil
(Querist) 22 June 2014
To make things simpler, let me share with you all that school has proofs documents which shows that company has defaulted the agreement. Basis on this can school cease the agreement and stop the payment. BTW school still has the hardware installed by the company which is unpaid. School does not want to pay anything now as the legal market value of the hardware is zero now. (60% depreciation per year and school is not in the 3rd year of agreement) on computer as per IT.
Devajyoti Barman
(Expert) 23 June 2014
complicated legal dispute based of hard facts..better consult local lawyer with all papers.
Both parties have something to say.
V R SHROFF
(Expert) 23 June 2014
LONG complicated legal QUERY
& COMMERCIAL
BETTER CONSULT CO ADV
Rajendra K Goyal
(Expert) 23 June 2014
Consult local lawyer dealing in Company Law.
Adil
(Querist) 23 June 2014
Thanks to all for reverting on this.
I have just met with a local lawyer and show him the copy of the agreement. Below are the points:
1. Total project value is 1.25 cr. Agreement is done on Rs 50 non judicial stamp paper.
2. As per the agreement the judiciary was New delhi however, no one from the school management was asked to come to New delhi to get it signed / registered.
3. The agreement was signed in another small district of UP and then sent to Delhi. From where the company official have signed it and sent one copy back to School.
Firstly, As per the local advocate, the agreement is null and void since it is not registered.
Secondly, any agreement needs to be signed on a Rs 100 stamp paper and not on Rs 50.
Thirdly, he thinks that the company has not paid the stamp duty as it would be 10% of the total project value.
Since the agreement is null and void, no clause mentioned in the agreement can be used legally against the school by the company.
I would request the experts to give there views on this.
Adil
(Querist) 23 June 2014
Can anyone please guide me on the above post?
ajay sethi
(Expert) 24 June 2014
we have advised you to contact local lawyer . company can afford legal fees. we dont reply to commercial queries
Adil
(Querist) 24 June 2014
Yes I do understand that. I did discuss with a local lawyer. All I would like to know is whatever facts he has told me. Are the true? Thanks.
ajay sethi
(Expert) 24 June 2014
submit agreement for adjudication to collector to determine correct amount of stamp duty payabale on the agreement .
Sankaranarayanan
(Expert) 24 June 2014
yes better to discuss as advised by Sri Shroff
Devajyoti Barman
(Expert) 24 June 2014
1. The agreement need not be registered.
2. Even if it would have to be registered then the agreement would not have been void because of non -payment of registration and the court can consider such agreement especially if terms are admitted by parties.
3. The court even ask the party to pay the stamp duty and then proceed to consider it.
So on any case the agreement is very much valid and can be relied upon.
Devajyoti Barman
(Expert) 24 June 2014
1. The agreement need not be registered.
2. Even if it would have to be registered then the agreement would not have been void because of non -payment of registration and the court can consider such agreement especially if terms are admitted by parties.
3. The court even ask the party to pay the stamp duty and then proceed to consider it.
So on any case the agreement is very much valid and can be relied upon.
T. Kalaiselvan, Advocate
(Expert) 26 June 2014
You can go by your local lawyer's advise because he has seen the papers which are material to give proper opinion to your complicated issue.
