ssj (Dir) 01 February 2010

Advance Payment

Ours is a pvt ltd company having two directors with equal stake . We had paid advance of 10 lacs to a company about 2 years back for purchasing a machine . ( actually we had paid this amount towards their laon account directly in a cooperative bank ).The bank has closed down now .

They have not given us the machine and now are not willing to return the advance .The only proof we have is the cheque nos and the bank statement . Can we file a suit after so much time has passed .And is this evidence sufficient .

Pl advice

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3 Replies

Parveen Kr. Aggarwal (Advocate) 02 February 2010

Limitation for filing a suit for recovery is three years (Article 13 of the Schedule appended to the Limitation Act, 1963). So you can file a suit for recovery of the amount advanced together with interest and the same will be within limitation period.

However, you must serve a notice before institution of the suit which though not a statutory requirement but will be beneficial as the other party may approach you for amicable settlement.

Isaac Gabriel (Advocate) 02 February 2010

Presumably,you have paid the amount directly to their loan account with the bank which could have been obtained by the company for their own needs,and you are left with no evidence that you have paid the amount for any consideration or contract or agreement whatsoever. with the company.Therefore it is a must that you have to put them on notice with the evidence you are having to proceed leaglly within the limitation period as pointed out by Praveen

SIDHES JENA (CEO- Jena & Company www.jenasworld.com) 02 February 2010

Bank statement and cheque not is not sufficient for it, do u have any kind of purchase order or receipt fom them as a supporting document, if yes then go for it,