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ALooking for some advice regarding an LLP dispute my father is facing.
My 70-year-old father was one of three partners in an LLP based in Mumbai. A few years ago, the LLP procured goods worth around ₹1.2 crore from a supplier located in Rajasthan.
The goods were dispatched from India to Dubai, but unfortunately, the overseas buyers turned out to be fraudsters and disappeared after taking delivery.
An official police complaint regarding the fraud was registered in Dubai. We have documented proof that this was a third-party fraud and not due to any wrongdoing from our side.
Important facts:
1. Out of the ₹1.2 crore, around ₹35 lakh was already paid to the supplier at the time.
2. After the fraud incident, the LLP became non-operational. The other two partners are untraceable.
3. My father went back to his independent real estate consulting work and has had no involvement with the LLP’s operations since then.
4. There was no formal written contract with the supplier specifying jurisdiction, but the LLP’s official documents specify Mumbai court jurisdiction for disputes.
5. We are willing to fairly settle the pending amount, but the supplier is demanding ₹2.5–3 crore, citing “opportunity loss,” which we believe is excessive and unfair.
6. No personal guarantee was given by my father.
Questions:
1. Can the supplier file a recovery case in Rajasthan? Or will it have to be in Mumbai because of our LLP documentation?
2. If they do file in Rajasthan, can we get the case transferred to Mumbai?
3. If a case is registered, is my father liable for only his share of the LLP’s liability or the entire outstanding?
4. What practical options do we have if they continue making unreasonable demands?
Would appreciate any advice from people experienced with LLP disputes, civil recovery, or insolvency matters. Thanks a lot in advance!
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