Club Factory’s India sellers send legal notice to the e-commerce platform over non-payment of dues

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Club Factory’s India sellers send legal notice to the e-commerce platform over non-payment of dues
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  • A few sellers have sent the company a legal notice demanding their payments to be released.
  • Recently, the All India Online Vendors Association (AIOVA) had also formally complained to the Reserve Bank of India regarding the suspension of payments from Club Factory.
  • Club Factory was one of the Chinese apps to be banned by the Indian government in June.
Chinese e-commerce platform Club Factory, which was one of the apps banned by the Indian government in June, has been in trouble with its sellers in India over the suspension of payments. And now, a few sellers have sent the company a legal notice demanding that their payments be released.

In the legal notice, a copy of which Business Insider has viewed, four sellers have claimed payments worth over ₹2 crore. The legal team which sent the notice told Business Insider that Club Factory has been given 15 days to respond, clear the dues or fight the case.

Club Factory has not yet responded to Business Insider’s emails.

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Recently, the All India Online Vendors Association (AIOVA) has also formally complained to the Reserve Bank of India saying that the Chinese e-commerce platform has violated Section 28 of the Payments and Settlements Act, 2007.

“The last tranche of payments are pending from Club Factory’s side. They told us they are keeping the payments on hold until the ban is lifted,” a seller told Business Insider, whose pending payments with the company run into lakhs.

Days after the ban by the Indian government, reports showed that Club Factory had continued to operate with cash on delivery options. However, on July 13, the sellers got an email from Club Factory that the company will not be releasing their payments until the ban is lifted, evoking the force majeure clause. Not just that, sellers are also worried about the deposits kept with Club Factory in the form of an escrow account, from where the platform used to release money in parts.

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