BY REGISTERED POST & ACKNOWLEDGMENT DUE

&
BY COURIER SERVICE
&
BY ELECTRONIC MAIL SERVICE
&
WHATSAPP INSTANT MESSAGING SERVICE

12.06.2023
To,
Amit Kumar Nag,
Aquilaw,
Advocate,
9, Old Post Office Street,
8th Floor, BBD Bagh,
Kolkata,
West Bengal – 700 001

Subject: Reply to the Legal Notice dated 25.05.2023 issued under section 138
read with Section 141 of the Negotiable Instruments Act, 1881

Ref: Notice issued under instructions from your client, Tuaman Engineering
Limited, having office at Plus D Souza 1-64/4 I, House of Helen D Souza
Little Flower, Vivek Nagar, 1st Cross Road, Kulur, Kavoor, Panjimogaru,
Maglore, Karnataka – 575 013 and having corporate office at 9 Brabourne
Road, LIC Building, 1st floor, Kolkata - 700 001.

Dear Sir,

This reply Notice is being sent under the instructions of my Client,

Gita Refractories Pvt Ltd., Represented by its Directors, having registered office at

#105, R.R. Takt, 37, Bhoopasandra Main Road, Sanjaynagar, Bengaluru – 560 094.

1. I am instructed to state that for the last 35 years, my client, is a very well-known

manufacturer of refractory materials such as high alumina bricks, magnesia

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 carbon bricks, magnesite bricks etc. My client offers a value-based proposition

in terms of product quality, cost, and development, whose motto has always

been to deliver as committed, keeping customer satisfaction at the helm of all

our decision-making processes.

2. On perusal of your legal notice, the averments contained therein are baseless,

devoid of merit and contrary to facts and law. At the very outset, my Client

denies all contentions raised in your legal notice and this reply to your legal

notice is issued without prejudice to the case of my Client.

3. My Client further instruct me to state that your Client had placed a purchase

order dated 07.03.2022 with my Client for the supply of items such as Oven

Standard Bricks, Flue Tunnel Standard Bricks etc., for a total sum of Rs.

12,16,19,170.92/- (Rupees Twelve Crores Sixteen Lakhs Nineteen Thousand

One Hundred Seventy and Nine Two Paise Only).

4. In reply to Paragraph Nos. 1 to 3 of your legal notice, the averments therein are

a matter of record, and hence do not need any specific traversal herein.

However, the averment in Para 4 that any stipulate that on failure on the part of

our client to complete the project within the scheduled time would attract

liquidated damages for an amount of Rs. 18,50,00,000/- is refuted as false and

hence, is denied in toto.

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5. My Client informs me to state that though the refractory items i.e. First Batch of

1,50,000 refractory bricks were ready in September 2022 itself from our end,

your client sent the Joint Inspection Team consisting of MECON Ltd and M/s

TUVIPL only in December 2022. This shows there was unreasonable delay and

failure on your client’s part to do the transaction within the scheduled time

period. Subsequently, the Second Joint Inspection of the second batch of

refractory bricks of consisting of 1,50,500 in number only occurred on

10.04.2023 that is beyond the agreed scheduled time. It is pertinent to note that

since the date of issuance of the Purchase Order, my client has diligently started

manufacturing refractory items to strictly comply with the delivery schedule.

This shows the immense activeness on the part of my client to sincerely abide

by the terms of the Purchase Order. However, there was unreasonable latches

and delays in conducting the Joint Inspection. Additionally, it is informed to me

that despite the delays from your end, there was no amendment to the Purchase

Order and your client with the ulterior intent of casting the entire liability on my

Client has made reckless allegations against my Client.

6. The averment in Para 6 of the Notice that my Client “failed and/or refused

and/or neglected to submit discharge of its obligation to submit discharge of its

performance bank guarantee for 10% of the value of the basic value of the said

purchase order” is vehemently denied as false. The my Client honoured its

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 obligations as stipulated under the Purchase Order and accordingly gave a

corporate guarantee in consonance with the purchase order.

The further averment that our Client issued an- undated security cheque bearing

No. 051875 to the tune of Rs. 97,50,000/- (Rupees Ninety Seven Lakhs Fifty

Thousand Only) drawn on State Bank of India, 22, JC Road, Bengaluru as per

the terms of the payment of the aforesaid Purchase Order is rejected with full

vigor. The aforesaid cheque was issued when there is a breach as per the terms

in the contract. As per the definition of the “Breach of Contract” Violation of a

contractual obligation by failing to perform one’s own promise by repudiating it

or by interfering in another party’s performance. In the instant case, there is no

breach of the contract from my client’s side as there was failure on your Client’s

part to undertake Joint Inspection of the refractory items and take delivery of the

same within the Delivery Schedule. Apart from the aforesaid contention, my

Client has also informed me that any alleged breach of a contract which may

result in damages have to be accurately determined through accepted methods.

Shockingly, none of these steps were undertaken by your Client.

7. In Reply to Paragraph No. 7 of your Legal Notice, the averment that the my

Client is liable to pay a delivery penalty of 5% of total value of purchase order,

in case of failure to complete the delivery as per the delivery schedule is false.

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 7.1 It is relevant to note that there was no delay in the delivery of the

refractory items from my Client’s end, hence, there is no question of

invoking Clause 13 of the Purchase Order.

7.2 It is vehemently denied that the my Client “miserably failed and/or

refused and/or neglected to discharge to discharge its contractual

obligation as per the terms of the said purchase order and complete

the delivery within the delivery schedule of the said purchase order.”

On the contrary, it is your Client who utterly and grossly failed to lift

the materials. As is abundantly clear from documentary evidence, it

was in fact my Client that followed up with your Client for clearing the

supplies, which was finally cleared after an inordinate delay of seven

months.

7.3 My Client further instruct me to state that your Client lifted the first

batch of refractory items having 1,50,000 Nos. of bricks from

27.12.2022 to 13.01.2023 from my Client’ factory at Hoskote. Thus, as

amply demonstrated, it is your Client’ lackadaisical attitude in clearing

the supplies that led to the delay, and not on the contrary, as falsely and

deviously suggested by you.

8. In Reply to Paragraph No. 8 of your legal notice, the averments therein a matter

of record and do not require any specific traversal herein.

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9. In Reply to Paragraph No. 9 of your legal notice, the averments therein are only

admitted to the extent that there was an inspection of the materials carried out

my MECON Ltd. and M/s TUV India Pvt. Ltd. However, the rest of the

averments are denied as false.

9.1 My Client instruct me to state that though the inspection report dated

13.04.2023 conclude that the offered quantity are not found acceptable,

the my Client registered their protest against the hitherto unheard

manner in which the inspection was carried out.

9.2 Vide elaborate emails dated 15.04.2023, 18.04.2023 & 19.04.2023, my

Client have effectively addressed the aforesaid inspection report and

have also objected in the manner the inspection was carried out. The

said inspection utterly failed to follow the established protocols and the

my Client has already brought this to your notice. Furthermore, the my

Client has also sought for a re-inspection, in line with established

practices, but to no avail. The pleas of the my Client has so far falls on

deaf ears. Copy of the aforementioned email trail is attached herewith

as Annexure – A.

10. In Reply to Paragraph No. 10 of your legal notice, the averments therein are

wholly false, and are denied in toto. In fact, there was inordinate delays on your

Client’s part to comply with the Delivery Scheduled. Your Client has utterly

failed to demonstrate and justify as to how the my Client would be liable to

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 make good penalty of 5%. Furthermore, as aptly demonstrated before, when the

whole inspection process is clouded with mystery and suspicion, thereby

necessitating a re-inspection, a question of unilateral rejection of goods and

consequently arbitrary claim of refund from my Client does not arise at all.

11. In Reply to Paragraph No. 11 of your legal notice, the averment that your Client

is subjected to liquidated damages of an amount of Rs. 18,50,00,000/- is

beyond the knowledge of my Client, and hence is denied accordingly. However,

the other averments are denied as false and baseless. At the cost of repetition, it

is made clear that there was no failure on the part of my Client to deliver as per

the delivery schedule, and on the contrary, it is the actions of your Client that

has given rise to the present conundrum, for which only your Client is solely

responsible.

12. In Reply to Paragraph No. 12 of your legal notice, the averments only to the

extent that “the said cheque was dishonoured and returned unpaid by the

drawee bank with the remark ‘PAYMENT STOPPED BY DRAWER’ on 27

April, 2023” is admitted as true as there was no legally enforceable debt

subsisting between my Client and your Client. The rest of the averments are

fictitious and malicious, and denied accordingly.

13. Your Client has misutilized the purpose of the undated security cheque issued

by my Client. The same is evidently made clear on behalf of my client through

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their communication to you on 21st March 2022 – “As we have agreed that

the purpose of this returnable cheque and corporate guarantee are only to

secure your advance payment of Rs. 97.5 lakhs to be paid to us. Kindly note

this cheque and corporate guarantee, needs to be returned to us immediately

after adjusting your advance amounts”. The Copy of the letter dt. 21.03.2022

issued by our Client is annexed as ANNEXURE – A.

13.1.The adjusted amount being Rs. 86,42,600 has been made clear in my

client’s letter dated 27th April 2023 to your client’s Managing Director

– "We observed that you did not lift the materials following the Supply

Schedule despite so many correspondences in this regard by us to you,

and only after passage of seven months, you cleared the supply (after

duly satisfied inspection from your end) and lifted 1,50,000 no's of

bricks invoiced (incl. GST @ 18% ) from our factory at Hosakote

during 27.12.2022 to 13.01.2023, and the ILC final clearance value for

the same was fixed at Rs.1,20,36,069.75, after deducting 10 per cent of

the Basic Invoice Value of 1,10,74,100/-, i.e., Rs.11,07,400/- (which

was your partial recovery against the advance payment of Rs.97.50

Lac) which you paid to us by honouring the said ILC. Therefore, it is

legitimately concluded that the balance lying on A/c Advance Payment

made by you to us was and is Rs.86,42,600/-.The passage of seven

months since the time we were awaiting to execute the supplies did

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 reach us substantial inventory carrying cost, labour cost and other

overheads which far-exceeded our Budget."

The Copy of the letter dt. 27.04.2023 issued by our Client is annexed

as ANNEXURE - B

13.2. Furthermore, this is reflected from your client’s behalf in their Bill of

Exchange dated 13th January 2023 which states a deduction of 10% i.e.

Rs. 11,07,410 on the basic value, which amounts to (including a 18%

GST) a total of Rs. 12,036,069.75 . The Copy of the Bill of Exchange

dt. 13.01.2023 issued by your client is annexed as ANNEXURE – C.

13.3. Hence the cheque was intended for payment purposes related to the

terms of the purchase order, and it does not encompass delivery

penalties or any other unauthorized charges. Your Client's decision to

utilize the cheque for the alleged delivery penalty is a clear

misappropriation of funds and a violation of the agreed-upon terms.

This misutilization of the cheque highlights your Client's disregard for

the proper procedures and their attempt to unfairly extract additional

payment. Such actions are not only wrongful but also against the

principles of good faith and fair dealing. It is imperative to rectify this

misrepresentation and hold your Client accountable for their misuse of

the cheque.
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14. In Reply to Paragraph No. 13 of your legal notice, the averment that the said

cheque was drawn by the my Client with its banker State Bank of India is

admitted as true. However, the rest of the averments are denied as wholly

malicious and frivolous.

14.1 As vociferously propounded in the preceding paragraphs, your Client

has used the undated signed cheque given by the my Client to recover

the disputed and alleged delivery penalty which is beyond the objective

of the aforesaid cheque. Additionally, your Client has remained

unresponsive to the corrective action suggested by my Client, whereby

my Client have called for a re-inspection in line with established

practices. Your Client has remained incommunicado with respect to the

re-inspection, and has malafidely presented the said cheque to cause

undue financial distress to my Client.

14.2 Thus, the said delivery penalty @ 5% has been fraudulently claimed by

your Client using the aforementioned cheque despite being well aware

that there exists no legally enforceable debt as against my Client.

Therefore, the malicious attempt by your client to deliberately present

the cheque, with the sole view to get the same dishonored shall be

construed as a fraudulent attempt on your part which can attract

stringent criminal action.

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 14.4 Furthermore, we would like to highlight that our client's decision to

stop the cheque is not indicative of any fraudulent or dishonest intent.

On the contrary, it is a responsible and prudent action taken by our

client, considering the circumstances surrounding the transaction. It is

important to note that our client possesses sufficient funds in the

account to honour the cheque if necessary, thereby negating any

suggestion of criminal intent.

14.5 Contrary to what you have coined the acts of my Client’ act as

“arbitrary, illegal, fraudulent and malafide,” it is in fact the act of your

Client is clearly worthy of such labels. The act of arraigning the Vice

President of my cilent, who is not even a signatory to the said cheque,

is an ample demonstration of the vindictive and arm-twisting tactics of

your Client, to deliberately gain undue financial advantage.

15. The said amount has been fraudulently claimed by your Client using the

aforementioned cheque despite being well aware that there exists no legally

enforceable debt as against my Client. Therefore, the malicious attempt by your

client to deliberately present the cheque, with the sole view to get the same

dishonored shall be construed as a fraudulent attempt on your part which can

attract stringent criminal action.

16. With respect to charges of this notice, you can recover from your client.

Furthermore, when there is no question of any legally enforceable debt, there

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 shall be no question of interest, and consequently, there does not arise any need

to treat your legal notice as one under the Interest Act as well.

17. In the best interest of your client, you are hereby called upon to desist from

filing any frivolous suit or criminal complaint. Any such malicious proceeding

will be met with a befitting response and the same shall come at your own cost

and risk.

18. Your client is liable to pay a sum of Rs. 25,000 towards the cost of this reply to

your legal notice.

19. This is reply is issued without prejudice to the interests of my Client, and shall

reserve the right to give further replies, if necessary.

CHANDAN B.R. REDDY

[ADVOCATE]

Copy to Tuaman Engineering Limited

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