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Private Limited company V. Marketing Company

Date of Claim raised:15/02/2022
Date of Conciliation: 23/02/2022
Date of Settlement: 23/05/2022
Digest: Mediation/Conciliation/Dispute/Claimant/Respondent/Invoice/Settlement
Case Summary:

This dispute was between a Private Limited company based in Bangalore (the Claimant), which is in the business of IT solutions, and a marketing company (the Respondent) based out of Delhi. The claimant had supplied the hardware required to host a server that would help in the broadcasting of IVR and SMS content on a large scale.

The deal was that the respondent would pay a total of Rs. 6,05,032/- for the supply of the equipment of which 50% was to be paid as an advance, and the remaining after the commissioning of the project. While the advance was received, the remainder of the amount was not paid even after 30 days of kickstart leading to a total outstanding of Rs. 4,34,672/-.

The Issue

While there was an advance received and equipment delivered, the respondent claimed that the supplied hardware was not up to the specification, and hence, there needed to be a price reduction. Despite repeated appeals from the claimant and various communications where they did prove the concurrence of the product delivered to the purchase order, the respondent denied budging from his stand.

The Process

While PrivateCourt was involved in the settlement, the mediator went through all the communication and established that the claimant had a valid stand.

In the first discussion with the respondent, it was clear that there was malicious intent to avoid payment. In subsequent rounds of negotiation, the mediator clearly put across to the respondent that since there was a breach of agreed terms from their end and the next step that would be taken would be to repossess the hardware in question, which would send their business plans into a tizzy. Besides, this news being spread on social media would also create a bad reputation for their business. With these threats looming large, the respondent agreed to come around and make good on their end of the bargain.

The Settlement Terms

It was agreed that the Respondent would pay the remainder of the payments i.e. Rs. 4,34,672/- in three equal instalments of Rs. 1,44,890/, on or before 23rd May 2022, each to be payable as below:

The first instalment of Rs. 1,44,890/- on or before 23rd March 2022.
The second instalment of Rs. 1,44,890/- on or before 23rd April 2022.
The third instalment of Rs. 1,44,890/ on or before 23rd May 2022.

Failing to make this payment would draw an immediate forfeit of the articles sold with no refund to the 50% already paid.

The Inference:

Most business houses have to trust their customers, and business is mostly conducted on a good faith basis. When there is an intention to cheat, third-party negotiations with clear directives of swift legal action can often turn things around.