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Manufacturer of Chemical Products V Reseller

Date of Claim raised:16/08/2021
Date of Conciliation: 20/09/2021
Date of Settlement: 20/09/2021
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary

This dispute was between a manufacturer of Chemical products as the Claimant and a reseller as the Respondent, both based in Madhya Pradesh. The claimant, a Private Limited company, supplied chemical products to the respondent. The credit terms agreed upon were 30-days from the date of delivery. The respondent, in turn, was in the business of reselling these products in India and abroad. The respondent’s legal status was that of a proprietary entity. While the transactional relationship was fairly new between the two entities, their past business transactions were always honoured as agreed by both parties. Unfortunately, this dispute occurred as the respondent fell ill and took to the bed, and his son stepped in to run the business.

The Issue

While it was thought that the management change would be a temporary arrangement, the hospitalisation remained an extended affair, and the son who now took to running the business was really unaware of many transactions. The overdue to this account had now reached the 90-day period, and when approached by the claimant, the respondent’s son rather sidestepped the issue claiming that he was unaware of the promises to pay. The dispute involved an unpaid amount of Rs. 74,000/-. Despite the claimant's representatives providing all documentary evidence, a settlement was not reached. PrivateCourt was asked to step in to mediate a settlement as the claimant did not wish to drag an unwell man into litigation.

The Resolution

The Mediator, once convinced of the claim, approached the respondent's representative and tried to understand his side of the story. What was evident was that, as the respondent took to the bed, the business had come to a halt, and the son who now took over was grappling in the dark trying to understand his receivables . It was also understood, while inspecting the invoices and the materials in stock, the goods supplied by the claimant had not been shipped out further. Understanding this and post approval by the claimant, it was agreed that the materials in question be returned and the cost of transport be borne by the respondent.

The Settlement Agreement

The respondent agreed to return all materials received from the claimant and agreed to pay the difference in value of Rs. 74,000/-, in case of any depreciation on or before the 20th October 2021.

The Inference

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