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. The second party has used the cheques of our company (sole proprietor) to file a cheque bounce case on us, hiding the fact of the agreement in the complaint made.
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?
The Magistrate Court not having powers of discharge as it is a summons case. If cheque bounce notice and cases file then you have to take such defence and ultimately it may be quashed if you go to High Court, since you have no liability to pay any amount.
The investment made by the second party is considered a debt as per the agreement. However, if many of the points from the notarized agreement were not followed, it may affect the validity of the agreement and the cheque bounce case filed by the second party. It is advisable to seek legal advice in this matter.
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