XXXX XXXXXX & ASSOCIATES

LEGAL CONSULTANT & ADVOCATE

SUPREME COURT OF INDIA

Office No. XXXXXXXXXXXXXXXXXXXXXXXXXX

REGD. POST / EMAIL/WHATSAPP

                                                                Dated: XX.0X.20XX

To,

1.   XXXX

Office at:

XXXXXXXXX

2.   XXXX

Director / Authorized Signatory

Office at:

XXXXXXXXX

Mob.No. XXXX

Email: XXXXXXXXXXXX

3.   XXXX

Director

Office at:

XXXXXXXXX

Email: XXXXXXXXXX

4.   XXXX

Director

Office at:

XXXXXXXXX

Email: XXXXXXXXXXXXX

5.   XXXX

Director

S/o XXXXX 

Office at:

XXXXXXXXX

Email: XXXXXXXXXXX

LEGAL NOTICE UNDER SECTION 138/141 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881 AS AMENDED FROM TIME TO TIME.

Dear Sir/s, 

We act for and on behalf of M/s. XXXX Foods LLP, having its office at ________________________________________ (hereinafter to be referred to as “Our Client”) through its director namely ___________, who is authorized person to initiate all kinds of legal proceedings against the above mentioned noticees, and are hereby instructed to serve the present legal notice upon you the addressees (hereinafter to be referred to as the “Addressees”);-

1.           That Our Client M/s. XXXXX Foods LLP, a partnership firm incorporated under the LLP Act, is a company based on the National Industrial Classification code of 15 and it is involved in business activities related to this industry code such as Manufacturing (foods stuffs).

2.           That you the addressee no.1 engaged in the business of marketing, distribution and brand building  

3.           That you, the Addressees, had approached Our Client in or around March, 20XX for the sale/supply and storage of the company’s products and our client and you the Addressees entered into a C&F Agreement dated XX.0X.20XX and you the addressee agreed to perform the functions viz., stock company’s products, and sell/ supply them to the distributors from time to time and on the terms and conditions set out in the Agreement. In terms of the Clause 301 of Article-III Operations of the C&F Agreement, our client provide initial security of Rs.1 Crore you the addressees. The said Clause reads as under; -

“3.1   The C&F shall provide an initial security of Rs. XX Crore. The amount of security can be altered after mutual consent of both the parties. Initially investment of Rs.______ Lakhs shall be in the form of bank transfer and balance security shall be made in the form of Bank ______. The company shall provide C&F with the distributor network.

3.2    The Company shall invoice the goods to the C&F against the guarantee at a discount rate as specified in Annexure 1. The C&F shall be eligible for the margin as specified in Annexure 2”

4.           That our client issued Bank Guarantee to you the addressee which in turn will give the Bank Guarantee to M/s. XXXXX XXXX in order to simplify the same, executed a Tripartite Memorandum of Understanding dated XX.0X.20XX between you the addressees, our client and M/S XXXXXX.  simply understanding that all shall give Bank Guarantee on behalf of you the addressee directly to M/s XXXXXXXXXXXX.

5.           That our client invested a sum of Rs.___ Crore (Rs. _____ Lakhs Bank Guarantee and Rs. XX Lakhs payment to you the addressees) as security against goods received from you the addressees. You the addressees have marketing rights of various brands and promote the brands and generate sale, our client store the goods and supply as per the orders of you the addressees from time to time with quality and standard packing for such quantity of the products. In terms of the agreement our client is eligible for margin on sales or minimum guarantee (1% of investment and monthly expenses) which is higher and any loss due to expiry of the goods shall be borne by you the addressees.

6.           Our client paid a sum of Rs. XX Lakhs on 0X.0X.20XX to you the addressees, our client also issued a bank guarantee of Rs.__ Crores to XXXXX International in terms of Tripartite Agreement. You the addressee billed the stock worth Rs. XX Lakhs approx., in which some of the items were sold and balance remained with our client, in respect of the same our client wrote a mail to you the addressees, but you failed to respond the same, resulting most of items have now expired.

7.           That our client used to raise the invoice of minimum guarantee, payment was supposed to be done by 7^th of next month, but you the addressees always delayed and as per records you the addressees billing only one during the entire year. According to the said Agreement in case of termination / expiry of agreement, you the addressees are liable to return the security and buy back its goods which is amounting to Rs. XXX Crores.

8.           That the purchase return for all the balance stock has been raised and accepted by you the addressees, the said stock are still lying in godown of our client and our client are forced to pay rentals for the same.

9.           That you the addressees have only paid the payment of months i.e. March, 20XX to October, 20XX in October, 20XX and since September, 20XX nothing was paid to our client till date by you the addressees, resulting in interest loss to our client. The total amount of Rs.………/- pending up till XX.0X.20XX our client requested to clear the dues vide email dated XX.0X.20XX to you the addressees, you also deducting TDS on the invoices raised by our client, but till date not deposited the same with Income Tax Department. Finally, after so many pursuance, meetings and emails, you the addressees issued the cheque for the month of July, 20XX in favour of our client for the outstanding amount and you the addressees agrees to pay the amount for the remaining period between May, 20XX and the date of realization of the payment. You the addressees also issued the cheque of Rs.__________/- in favour of our client in regard of the same, summary settlement email dated XX.0X.20XX was also sent by our client to you the addressees, despite receipt of the same, you failed to response the same.

10.        That you, the above-named addressees, in light of the agreed terms and conditions, placed the order and against this order and supplied were made by Our Client as per your specifications and satisfaction accordingly. It is pertinent to mention herein that you, the above-named addresses, without any protest or demur accepted the product supplied by Our Client. It is further pertinent to mention here that Our Client raised an invoice on you, the above-named addresses, which were duly accepted and acknowledged. That you, the above-named addressees, released payment to Our Client on a running account basis. It is pertinent to mention herein that as per Our Client’s ledger account, there is an outstanding principal amount due against the supplies which were made by Our Client, and the same were duly received and acknowledged by you, the above-named addressees. In respect of the supplies that were made to you the addressee our client supplied the invoices/bills.

11.        That inspite of the categorical understanding that the due Amount will be paid despite raising the invoices/bills, you, the above-named addressee, failed to honor the payment, and after numerous attempts made by Our Client requesting the payment of the due Amount, you, the above-named addressee, in a discharge of part liability issued A/c payee chequesin favor of Our Client, which was drawn on ICICI Bank, Okhla Phase 1 Delhi Branch New Delhi. That the details of the subject cheques, which wasissued in favor of Our Client are as follows:

12.    While handing over the cheques to Our Client, you, the above named addressees, categorically represented to Our Client that the cheques cheques would be duly honored as and when presented by Our Client.

13.    Accordingly, Our Client presented the said cheque for encashment with our banker i.e. ICICI Bank, XXXXXXX Branch, XXXXX. However, to the utter shock and surprise of Our Client, the above-mentioned cheques were not honored. The cheque was returned to Our Client with the remarks “Funds Insufficient”, vide returning banker’s memos dated 0X.0X.20XX and was received by Our Client.

14.    That you the above said addressee no.1 is a Private Limited Company and you the addressee no.2 is its Director-cum-Authorized Signatory of the cheque in question and you the addressee no.3 is the Director of the addressee no.1 company and you all the addressees are in charge and responsible for the day to day affairs of the you the addressee no.1 company and addressee no.4 to 9 are the shareholder / ex-directors of the company.

15.    That after receiving back the dishonored cheques in question, Our Client tried to contact you, the above-named addressees, numerous times to apprise you, the above-named addressees, about the factum of dishonoring of the cheque; however, you, the above named addressees, did not pay any heed on the request of Our Client and rather you, the above named addressees, put off the matter on one pretext or the other and thus the Amount is still due.

16.    That Our Client has requested you, the Addressees, numerous times requesting you, the Addressees, to pay the Due Amount to Our Client along with the applicable interest, however, you, the Addressees, by one way or the other have snubbed the request of Our Client qua the payment of the due amount to Our Client. This act shows your dishonest intentions.

17.    That as per Our Client’s ledger account there is an outstanding amount due along with interest calculated at rate of 18% from the due date (hereinafter to be referred to as the “Due Amount”) against the supplies of the goods which were made by Our Client to you, the Addressees, and the said supplies being duly accepted and acknowledged by you, the Addressees.

18.    That it was to abrupt shudder of Our Client that regardless of the fact that the goods of utmost quality were duly supplied by Our Client on an urgent basis as and when requested by you, the Addressees; despite the same, you, the Addressees, chose to take a volte-face by not abiding by the terms and conditions agreed between the parties.

19.    That Our Client has been trying to contact you, the Addressees, regularly and has been trying to meet your officials/representatives on several occasions, however, all such requests of Our Client have gone vague. That it is pertinent to mention that Our Client in lieu of the past business relationship with you, the Addressees, had earlier chosen not to resort to any legal mechanism trusting that the due amount will be paid by you, the Addressees, along with the interest shortly.

20.    That from the above act and conduct of the accused persons, it is clear that the accused persons issued the said cheques in question with dishonest and fraudulent intention and the accused have intentionally deliberately issued the said cheque to the complainant in spite of the fact known to accused that the said cheques may not be honored in favor of Complainant, hence accused have also committed serious criminal offenses of cheating, fraud, criminal breach of trust and other criminal offenses punishable u/s 406, 419,420 IPC, therefore, the complainant reserves his right to institute criminal cases against all the accused in the court having proper jurisdiction.

20.    That axiomatic fact that emerged from the above clearly shows that you, the above-named addressee, have cheated Our Client with dishonest and mala fide intentions as even prior to issuance of the cheque, you, the above-named addressee, never had any intention to pay to Our Client. Thus you, the above-named addressee, have caused wrongful loss to Our Client and wrongful gains to yourself, and have also committed offenses under Sections 406 and 420 of the Indian Penal Code, 1860.

You are, therefore, hereby by virtue of the present notice, called upon to make the payment of the aforesaid cheque in question of Rs. 53,85,234/- (Rupees Fifty Three Lakhs Eighty Five Thousand Two Hundred and Thirty Four Only) in favour of Our Client, within a period of 15 (fifteen) days failing which we have clear instructions from Our Client to initiate proceedings against you as per the provisions of the Negotiable Instruments Act, 1881 and other appropriate legal proceedings at your cost and risk.

A copy of the same is being retained in our office for future reference/action.                                      

                                                                             Yours faithfully,

Advocate