Query about validity of agreement


My father had been running a branch of a company since past 20 years after succeeding from his father, who had started the branch in 1954. After the death of my father last year, my mother wanted to handle the branch & wrote many letters to the head office for making her secretary of the running branch. They demanded their  share for the past 10 years, which was overdue from the time my father was secretary, out of the receipts of the branch. She had already informed vide letters that there was no new business at the branch, rather only old customers were availing services from the branch. So, my father had not sent the share for so many years. Her main intention was to keep providing services to the old customers as there were hardly any new customers visitng the branch nowadays.

My mother was told to pay a lumpsum of Rs. 5 lakhs towards previous dues, after which they would consider her request. She expressed her inability and they agreed to accept Rs. 3 lakhs upfront and 2 lakhs in installments after some period. She paid the 3 lakhs by demand draft and on the same day, they got her to sign a fresh agreement which stated that she was being permitted to open a new branch in the city and open a new bank account. The agreement also stated a minimum HO share of Rs. 1 lakh annually to be sent by the branch. This was completely opposite of what she was assured before handing over the draft. Somehow, they got her to sign it & then assured her that they would alter the agreement later on after the draft is encashed by them.

Now, they are trying to force her to pay the 1 lakh share of the previous year along with the 2 lakh remaining balance as security deposit, whereas she has already informed them that still the business is very low and there have been only a few new customers at the branch. So, she cannot pay the amounts to them now.

 

My query is:

1. Can the agreement be challanged on the grounds that the branch was already running before the agreement & they had forcefully made it to exploit her by considering it as a new branch & a fresh agreement, where there is no mention of the previous history of the branch or that she had paid the previous dues which they had confirmed were cleared up to the date of the agreement?

2. Also, since she had informed before hand that there was no new business, but still they had drafted the agreement asking for such high share & assurance of thousands of new customers within first two years. In spite of the knowledge of the branch, it was their own decision to make the agreement & they should have thought about the current status before making her commit to pay such high share & security deposit.

 

 
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Advocate

Did your mother had emailed the entire facts to the Head Office in advance before executing the fresh agreement???? did the Head Office insisted about Rs. 5 Lakhs vide email???

kindly share all the communications exchanged with them then only proper advice can be given.

 

Regards

Adv. Rohit Dalmia

9324538481

Mumbai

 
Reply   
 



Dear Mr. Rohit,

 

Yes, my mother had intimated all about the status of the branch that there were hardly any new customers, but not via email. She had sent 3-4 letters vide registered post to the President at Head Office. In these letters, she had explained each and everything about the branch's past & current operations. Before the date of agreement, she had also made 4-5 personal visits to Head Office and everytime, the President was out of country. So, it was the Secretary, who dealt with her everytime & he only told her about clearing the past dues. All the communication between her and the head office has been addressed by the secretary only, except one meeting on the date of agreement. On that day, she had met the president & he had told her to pay the dues & correspond with the secretary. There is no document evidencing their claim as past dues or any clearance letter saying we have received the dues of the branch for the earlier period and there are no dues till the date of the agreement. All this communication was verbal between the secretary & her. He had also verbally agreed to take 3 lakhs up front & balance 2 lakhs as installments over a period, when the branch's business flourishes, out of the proceeds of the new customers. But, in the agreement, he totally changed the wording to security deposit of 2 lakhs to be given in 2 installments after 2 months each from date of agreement. In the agreement also, he is representing the company & all the correspondence has been sent by him only.

The only document of Rs. 3 lakhs is an accounts receipt issued by them under the heading "Head office share" with the DD no. written in narration. This receipt was generated from their tally software on the next day after the agreement. There is no document stating that this amount was received towards the past dues, or anything. Even in the agreement, there is no mention of my father or the history of the branch, other than his name written in introduction of my mother as the second party. The agreement also states that she has to open a new bank account in the branch name. But they were already knowing that there was already a current account with SBI, which is also being operated till date, after proper change in signatories with the bank.

So, basically, each and everything in the agreement is totally opposite of what has actually happened. The agreement says that she has to open a new branch, whereas she has continued the same branch at the same address. Also the bank account clause is completely opposite.

 
Reply   
 

Hello Mr. Rohit,

 

I have read the agreement once again thoroughly and noticed one important detail. They have mentioned that the new branch will provide services & benefits to its customers as defined in schedule A attached to the agreement. But no schedule has been attached and she has neither signed any schedule whatsoever. I think that this should be an integral part of the agreement & without the schedule, the agreement can be rendered as incomplete. Please reply soon.

 
Reply   
 
Advocate

Mr. Sood!

It is advisable to share the agreement copy with me. Further, your mother needs to send a letter to them pointing out all the defects in the agreement which are contrary to the facts.

 

For doing all this you may call me on the below mentioned number, if required.

 

Regards

Adv. Rohit Dalmia

9324538481

Mumbai

 
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