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Supplier / Vendor Fraud

A supplier or vendor cheated you — took advance payment but did not deliver goods, delivered defective or substandard goods, or disappeared with your money.

Do this now
  1. 01Send a formal written demand notice to the supplier by registered post or email
  2. 02Document all communications with the supplier (orders, invoices, delivery receipts)
  3. 03Get quality test reports if goods received are defective or substandard
  4. 04File a police complaint if the supplier has absconded with advance payment
  5. 05Send a legal notice through a lawyer demanding refund/delivery within 15 days
  6. 06File a civil suit for recovery if the amount is substantial
  7. 07Warn other businesses about the fraudulent supplier through trade associations
Evidence to collect
  1. Purchase orders and invoices
  2. Proof of advance payment (bank transfer receipts, cheque copies)
  3. Delivery challan or goods receipt notes
  4. Quality inspection reports for defective goods
  5. All communications (emails, WhatsApp chats, messages)
  6. Supplier's GST registration and business details
  7. Photographs of defective goods received
Documents you need
  1. Purchase order copies
  2. Payment receipts and bank statements
  3. Legal notice sent to supplier
  4. Quality test reports (if applicable)
  5. Business registration documents
  6. ID proof
  7. GST invoices
Where to complain
  1. Nearest Police Station — FIR for cheating
  2. Civil Court — Recovery suit
  3. Consumer Court (if you are end consumer)
  4. Arbitration (if contract has arbitration clause)
  5. Economic Offences Wing — for large-scale fraud
Laws that apply
  1. Indian Contract Act — Sections 73, 74 (Compensation for breach)
  2. Sale of Goods Act — Sections 12-16 (Conditions and warranties)
  3. BNS Section 318 — Cheating
  4. BNS Section 316 — Criminal breach of trust
  5. Consumer Protection Act — Section 35 (if end consumer)
Understanding the issue

Supplier fraud affects businesses of all sizes. Under the Indian Contract Act, failure to deliver goods after accepting payment is a breach of contract. If the supplier deliberately misrepresented goods or had no intention to deliver, it amounts to cheating under BNS. You can file both a criminal complaint and a civil suit for recovery. For goods-related disputes, consumer forums may also be applicable if you are the end user.

When to see a lawyer

Consult a lawyer if the amount involved is substantial, if the supplier has absconded, or if you need to file a recovery suit in court.