Reply to Legal Notice

Avinash Nandan Sharma

Advocate                                                                                                                     REF. No.:————

DATED:————–

BY COURIER/ E-MAIL

TOTAL PAGES:——-

To

Mr. Ajay 

Advocate

 Office at:

Chamber No. x

Supreme Court

New Delhi – 110 001

Your Clients: M/s  XY Limited, Having its registered office at B.M. House,  Kirti Nagar, New Delhi – 110 015

Our Clients:   M/s LB Limited, a company incorporated under the provisions of the Companies Act, 1956, having its registered office at X,  Delhi – 110 033 and having its corporate office at  Industrial Area, Surajpur, Greater Noida – 201 306, District- Gautam Budh Nagar, Uttar Pradesh

Subject:          Reply to your legal notice dated 15^th September, 2025, received by our clients on 22^nd September, 2025

Dear Sir,

We are acting for and on behalf of our clients noted above who have placed in our hands your afore subjected notice, with instructions to write to you as under:-

1. THAT at the outset our clients deny and controvert all the allegations and narrations made in your afore subjected notice, unless specifically admitted herein.
2. THAT bare perusal of your afore subjected notice revels that your clients have not properly instructed you and even has concealed the true and material facts from you and got issued the afore subjected notice on the basis of false and frivolous facts.
3. THAT status of your clients as mentioned in para No.1 of your afore subjected notice are a matter of record.
4. THAT the contents of para No.2 of your notice are absolutely wrong and hence are specifically denied. Our clients had never approached your clients for the supply of goods on consideration as alleged in forgoing para of your notice. It is pertinent to mention here that our clients have a manufacturer of various parts of AC, Washing Machine, Cooler etc. for their customers such as LG Electronics, Videocon Industries Limited etc. and are having a good reputation in this field. It is your clients, who after seeing the reputation and work of our clients, had approached to our clients for receiving the job work for manufacturing the various components of AC, Washing Machine, Cooler etc. for the customers of our clients.
5. THAT the contents of para No.3 of your notice are absolutely wrong and hence are specifically denied. Our clients have neither assured your clients nor given any personal guarantee for any alleged outstanding towards your clients. It is pertinent to mention here that being impressed by the assurances, given by your clients, our clients had agreed to give the job work to your clients and for the said purpose it had been agreed by your clients that they would take the moulds from the Unit-I and Unit III of our clients and after finishing the work they would return back the finished goods to our clients. Accordingly, the details of costing for manufacture of the various products have been executed between your clients and our clients wherein it had been expressly admitted by your clients that the rejection rate of granules would be 1%.
6. THAT the contents of para No.4 of your notice are absolutely wrong and hence are specifically denied. It is pertinent to mention here that apart from the aforesaid costing terms for manufacturing, no express agreement has been executed between your clients and our clients. Your clients used to supply the finished materials to our clients which used to be manufactured by your clients after receiving the mould sand granules from our clients. But your clients deliberately and malafidly charged the rejection of the granules from 13 to 25 % whereas the agreed rejection rate was only 1 %. Due to the said higher rejection rate, disputes has arisen between your client and our client with respect to the price difference and over charging.
7. THAT in reply to the contents of para No. 5 of your notice it is submitted here that your clients have raised the invoices towards the goods manufactured by them after receiving the granules from our Clients. Your clients had never supplied any alleged statement of account to our clients. It is pertinent to mention here that your clients have wrongly charged the rejection rate on the granules from 13% to 25 % instead of agreed rate of 1 % in the invoices raised by them. Our clients had strongly objected about the higher rejection rate charged by your clients and for the said purpose various reminder and mails had been sent to your clients but despite receiving the said reminder and mails, your clients miserably failed to adhere to the aforesaid costing terms.
8. THAT in reply to the contents of para No. 6 of your notice it is submitted here that when your clients did not stop charging the higher rejection rate of the granules, our clients had decided to discontinue the work with your clients, accordingly, our clients had requested your clients to return back the moulds of our clients which is costing more than Rs. 1,50,00,000.00 (Rupees One Crore Fifty Lakhs Only) and further requested to reconcile the account by adjusting the amount towards higher rejection charges, towards the shortage of supply and towards the price difference etc. But your clients in order to cheat and to defraud our clients induced our clients first of all to pay the amount, then only, they would return the moulds and reconcile the account. Hence, our clients were left with no other option except to pay the amount as directed by your clients, accordingly, in July, 2025, being induced and pressurized by your clients, our clients were forced to issue seven post dated cheques as detailed herein below. Therefore, out of the aforesaid seven cheques, cheque bearing Nos. 282840, 951490 and 951489 all dated 26.07.2025 were duly encashed into the account of your clients. Accordingly, after releasing the amount of the aforesaid three cheques into the account of your clients, our clients requested your clients to return back their aforesaid mould  also requested to adjust a sum of Rs. 14,49,160/- towards the debit notes issued by our clients in respect of higher rejection of granules, price difference etc. Therefore, our client had repeatedly followed up your clients for receiving of the moulds and for reconciliation of the account. After several follow up, your clients had returned the moulds of our client after a long delay due to which our clients had to suffer a huge financial loss. Your clients miserably failed to reconcile the account with our client. Hence, vide email dated 11.08.2025, our clients had requested your clients not to present the aforesaid remaining four cheques and also requested to return these four cheques.

9. THAT the contents of para No. 7 of your notice are absolutely wrong, illegal, malicious hence, the same are specifically denied and strongly objected. As already stated supra, our clients were forced and induced by your clients to issue the aforesaid cheques. But when despite receiving the email dated 11.08.2025, your clients did not turn out to reconcile the account with our clients and also not adjusted the aforesaid amount of Rs. 14,49,160/- towards the debit notes issued by our clients in respect of higher rejection, price difference etc. our clients were left with no other option except to send the letters to their bankers for giving instruction to stop the payment of the aforesaid remaining four cheques as your clients have already got the excess payment.
10. THAT the contents of para No. 8 of your notice are absolutely wrong, illegal, malicious hence, the same are specifically denied and strongly objected. It is your clients who caused grave financial loss to our client by illegally   withholding the moulds of our client due to which our client has to suffer huge loss to the tune of Rs. 1,00,00,000/- (Rupees One Crore Only) and further even after receiving the email dated 11.08.2025, your clients had deliberately presented the aforesaid remaining four cheques despite knowing that our clients have  no liability to pay any amount to them. Due to the aforesaid acts of your clients, our clients had to face grave mental pain, agony and trauma which can not be compensated in terms of money.
11.  WE THEREFORE CALL UPON YOUR CLIENTS to recall the aforesaid notice and withdraw the allegations made against our clients in para Nos. 7 and 8 of your aforesaid notice within fifteen days of the receipt of the instant reply, failing which we have got clear instructions from our clients to initiate necessary legal action against your clients as well as against each and every directors, managers, secretaries of your clients who are responsible for the conduct and day to day affairs of your clients at the appropriate forum for the recovery of the aforesaid amount of Rs. 1,00,00,000/- (Rupees One Crore Only) which our clients had incurred due to the delay in returning the moulds by your clients.

12        THAT despite receiving the instant reply, if, your clients take any action against our clients as alleged in your afore subjected notice, in that eventuality, the same will be duly defended by our clients at the cost of your clients.

13        A COPY of the instant reply to your aforesaid notice has been retained in our office for future reference and further necessary action.

(Avinash Nandan Sharma)

ADVOCATE

Copy to:         M/s XY Limited, Having its registered office at  New Delhi – 110 015

Notes:

1. As per the statement of account for good received back by UNIT-I there is a difference  of Rs. 38,82,800.23 between debit and credit amount.
2. As per the statement of account for good received back by UNIT-III there is a difference  ofRs. 16,49,7363.38 between debit and credit amount.