Hi,
Let's assume that there are 2 companies; the 1st Company being ‘A’ and the 2nd Company being ‘B’. A is a Manufacturing Unit (new venture) whereas B is a Trading Company.
Both, ‘A’ and ‘B’, entered into a Business Contract some 18 months back and executed the same that the B being the main suppliers of raw materials to A. As agreed upon the contract, A given an advance amount of Rs. 5 Lakhs to B to get hold of raw materials (because of the scarcity in the market). The agreement is drawn in a way that the materials will be procured in credit basis and after 45 days from the procurement, A has to remit the same B. However, A is ready to raise the amount at the time of procurement.
Since A is busy with their erection work, they didn’t demand any raw materials for a span of 6 months. Later, A is ready to start their production so that they asked for the raw materials. But B never supplied any such materials to A; instead, they dragged to get those materials by giving some reckless reasons. At last, A came to know that B is not doing any kind of trading businesses as mentioned in the contract and B is a forged company. Further, B NEVER has any such experience/knowledge in the line/nature of businesses as projected in the business contract. When A approached B, B disappeared and avoided to contact A, further.
Although, A had sent number of letters to B by requesting B to update their addresses and contact details for further communication. Besides again, A had requested B to supply the materials as per the Business Contract executed, or else, to return back their advance amount within a time frame, failing which A can take legal action against B and their forged company. But still, there is no response from B’s side. And, all the registered post (with Ack.) sent by A to B were returned back with the remarks ‘OFFICE CLOSED’. So, A is now unable to reach B in person as well as via phone or thru’ any other communication.
From the above, we may understand that B has a started a fake company to cheat / defraud A for the only sake of money and they misused the contract. So, please let know A how to proceed further. Can A apply any criminal lawsuit against B u/s IPC-420 here and what are all the other IPC sections would be enacted according to Indian Contract Act, in this case? The advance amount was given by A to B around ONE & HALF years (18 months) back. But B breached the Business Contract and it clearly shows that B is a forged company. So, at this point, Shall A demands any compensation/interest for their losses from B?
