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Food Grain Supplier V Wholesale Distributor

Date of Claim raised:08/07/2022
Date of Conciliation: 15/07/2022
Date of Settlement: 06/08/2022
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

This case is a dispute between a Food Grain supplier from Punjab (the Claimant) and a Wholesale Distributor based out of Maharashtra (the Respondent). The deal was that the claimant would supply wheat to the respondent for a period of 3 months, the ordered quantity would be paid for with an advance of 50%, and the remaining would be paid 15 days from the date of delivery. The products were to be delivered to three different locations in Maharashtra. While the advance payments were made and the payments for the 1st week of deliveries were made on time, there was a delay in the subsequent payments, and the supply had to be halted.

The Issue

The claimant had to halt the supply of materials as the amount of products delivered had also overshot the advance paid, and there was a fear of loss. While the respondent agreed that there was a delay in payment, his issue was that the halt in the supplies meant he lost his customers and blamed the claimant’s side for not cooperating. This became a bone of contention between the two parties, and the case was referred to PrivateCourt for settlement.

The Process

While both parties worked in a very unorganised formats, the Mediator had to study and analyse the invoices and receipts. While discussing with both sides, it was also clear that the parties were forced by their egos; hence, a settlement became difficult. The Mediator initiated a discussion with the respondent, and he claimed that though there was a delay if the supply could have been kept going, there would have not been a loss that he made. Despite trying to explain to him that the same was done as per the agreed terms, he was refusing to understand the same. The mediator then explained to the respondent that losing the claimant as a supplier would mean that he would lose one of the cheapest and the largest suppliers of wheat in the market, which would lead to losing out on business. This seemed to have an impact on the respondent, and they eventually came to an agreement.

The Settlement Agreement

The Respondent agreed to settle the entire amount of Rs. 4,92,000/- in three equal instalments of Rs. 1,64,000/- beginning from the date of Settlement Agreement till end of October 2022.

The Inference

A negative impact on business is a great reason to settle.