Is a second party investment a debt?
1 year ago
An agreement was signed between four people. In that agreement, we represented the first party. And the second party invested a sum of 15 lakhs and clearly mentioned in the agreement that at anytime that person can get out of the agreement and we will have to pay him the investment amount along with 10 percent surplus and profit (if any). There is also a point in the agreement where the loss will be shared as 25 percent each. This agreement was done with regard to a tender, but the business failed completely. Now the second party who has not yet given any notice of getting out of the agreement,has put upon cheque bounce case solely on the first party. So I want to know if investment from second party is a debt, even if many of the points from the agreement weren't followed by any of the party. If many of the points of the notarized agreement not followed, doesn't it become null and void?
If a written agreement has been signed by all parties and notarized, it is considered a legally binding contract. The terms and conditions outlined in the agreement are enforceable, regardless of whether or not all parties followed them.In your case, the second party invested a sum of 15 lakhs with the expectation that they would receive a return on their investment, along with the investment amount. If the investment agreement stated that the investment would be repaid with a 10% surplus and profit (if any), then the investment amount and any applicable interest would be considered a debt.
Anonymous
Replied 1 year ago
Dear sir,
Thank you for your time. I would like to know, what about the ratio of loss that was supposed to be shared by each partner equally ie 25 percent.
You have clearly stated in your question that you and others are liable to repay to the second party the investment amount along with 10 % surplus and profit if any and the percentage of loss to be shared. In this scenario, the investment made by second party has become a legally dischargeable debt against you three. However you can clarify with second party, that all 3 partners are equally liable to discharge the liability arisen and not to enforce the liability only against you. In this regard, you can approach the High Court for appropriate relief/remedy.
Anonymous
Replied 1 year ago
Dear Sir, thank you for your valuable guidance. This agreement was done with regard to a tender of Nagar Nigam. And in the agreement this point was also mentioned that all the parties will keep investing from time to time, but no other party invested apart from us (being the first party). The second party too invested only for the first time. So won't the loss to be borne will take into account my investment too to be shared 25 percent by each partner.
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