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Company after receiving payment did not supply product

Question: I run a private limited company. We provide engineering services. Two months ago the company received a large order from our customer. To accomplish this, we needed to buy some equipment. We finalized the quotation of a proprietary company and transferred 50% payment. The company after receiving payment did not supply the product.

Money transferred from our company’s current account to its company’s current account. But after transferring the money, the supplier is not answering the call or mail. The company lost the order because of that. Which also ruined our company’s reputation and wasted the company’s money. Now he is neither supplying the equipment nor returning our money. All communication is done over mail. Please help me with what legal action I can take.

Question from: Delhi

It is a breach of contract. When the company has received a payment and agreed to supply the product in a stipulated time. Then the company is bound to perform its part within that time period. It did not obey the agreement resultantly, you have suffered a huge loss.  

In this situation you should cancel the agreement and send a legal notice to the company. The legal notice should be for 

  • Return of money with interest.
  • Good the loss which you suffered due to non supply of product. 
  • Compensation for the loss of reputation

If the company does not compensate you within a reasonable time then you can file a civil suit under Section 73 Indian Contract Act for breach of agreement and compensation. 

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