hi,
there is a private limited company dealing in restaurant businesses, which had a franchise invested company owned franchise agreement on non judicial stamp paper (non registered ) with it's one of client ,where the client agreed to invest in business for restaurant buildup & equipment(rs.13 lakh including 3.5 lakh franchise fees non refundable )and security deposit of 2 lakh refundable, total 15.5 lakhs and agreed to receive rs. 30k p.m or 10% of sales whichever is higher. the company paid the person for 9 months and unable to pay starting Jan'2020 but still trying hard due to this slowdown before Corona pandemic and now this world pandemic the business got ruined and due to no cash in the company to operate business everything is got closed.
the agreement with the person though unregistered states that during any conflict in regards to the agreement it should be resolved through arbitration where the arbitrator will be appointed by the company's part in Kolkata.
the company has two directors and both are ruined due to bad market and doesn't have a penny as they are now doing petty jobs in the market for their own survival. but in this situation the client is trying to put a case through the court and constantly putting pressure.
just want to ask is there any way where the directors can plead mercy and come out of this if the clients tries to get them arrested, as they really don't have a penny to pay and also what measure should they take for their benefit if the person tries to get them arrested .
also despite of arbitrary clause can the person go to court for the agreement.
In case of commercial nature, it is always prudent and proper to consult an expert professional and on line guidance makes even simple issue confused to a lay man;.
