One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.

Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.

Mr.X approached me regarding a major contractual dispute with XYZ Pvt Ltd, a prominent multinational company in City A. The company had entered into a service agreement with Mr.X’s business, promising specific discount structures and payment terms. After successfully completing the contracted services, XYZ Pvt Ltd began defaulting on payments and refusing to honor the agreed discount rates. The company claimed that the original contracts were invalid and attempted to unilaterally modify the terms. Mr.X had invested significant resources based on the original agreement and faced substantial financial losses due to the company’s breach. Multiple attempts at resolution through internal channels failed, as the company’s legal department maintained their position that they were not bound by the original contract terms.

Advice in Such Cases

Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Document everything immediately including all correspondence, contract copies, and payment records. Send a formal legal notice demanding compliance with original contract terms within 15-30 days. Consider mediation or arbitration if specified in the contract as it can be faster than court proceedings.

Applicable Sections of Law

Under the Bharatiya Nyaya Sanhita (BNS), Section 318 deals with cheating and dishonestly inducing delivery of property. Section 316 covers criminal breach of trust when companies misappropriate funds or refuse contractual obligations. Section 61 addresses criminal conspiracy if multiple company officials are involved in the default. The Bharatiya Nagarik Suraksha Sanhita (BNSS) provides procedural framework for filing complaints and conducting investigations in such commercial fraud cases.

If You Are the Complainant

• File a complaint with the local police station under relevant BNS sections for criminal breach of trust and cheating
• Simultaneously file a civil suit for recovery of dues and damages in appropriate civil court
• Send legal notice through registered post demanding payment within specified timeframe
• Gather all documentary evidence including contracts, emails, payment records, and witness statements
• Consider filing complaint with regulatory authorities if the company operates under specific industry regulations

If You Are the Victim

• Immediately stop any further services or deliveries to prevent additional losses
• Preserve all evidence including original contracts, amendments, email communications, and payment receipts
• Calculate exact financial damages including interest, opportunity costs, and additional expenses incurred
• Approach consumer forums if the dispute qualifies under consumer protection laws
• Consider freezing company assets through court orders if substantial amounts are involved

How the Police Behave in Such Cases

Police typically treat contract disputes as civil matters initially and may be reluctant to register FIR. However, when fraud elements like cheating, criminal breach of trust, or dishonest inducement are clearly established, they must register the complaint. Economic offences wings handle such cases more seriously. Police may attempt mediation first before proceeding with formal investigation, especially in commercial disputes involving established companies.

FAQs People Normally Have

Can I file both civil and criminal cases simultaneously? Yes, you can pursue both remedies as they serve different purposes – civil for recovery and criminal for punishment.

What if the company is based in different state? You can file complaint where the breach occurred or where payment was due as per contract terms.

How long does contract dispute resolution take? Civil suits may take 3-5 years while criminal cases can take 2-4 years, though commercial courts are faster.

Can the company settle during proceedings? Yes, settlements are possible at any stage and often encouraged by courts to reduce litigation burden.

What Evidence Is Required?

• Original signed contracts and all amendments or modifications
• Email correspondence and written communications regarding the dispute
• Payment receipts, bank statements, and financial transaction records
• Delivery receipts, service completion certificates, or performance documents
• Company’s admission or acknowledgment of dues through any communication
• Witness statements from employees or third parties aware of the agreement
• Expert opinions on industry standards and contract interpretation if needed

How Long Will the Investigation Take?

Police investigation typically takes 60-90 days for initial enquiry and charge sheet filing under BNSS provisions. Complex commercial fraud cases may require 6 months to one year for thorough investigation. Court proceedings in commercial disputes usually take 2-5 years depending on court workload and case complexity. Arbitration or mediation can resolve matters within 6 months to 2 years if parties cooperate.

Advocate Sudhir Rao, Supreme Court of India