Transfer of Security Deposit Received as Liability
This query is : Resolved
05 July 2022
Dear Expert,
let suppose I am Manufacturer of PVC Pipe. I appointed small dealers for sale of my product for that i kept Rs 20000 as refundable security deposit when they start work with me. Now i had opened a Master dealer in their area & i will bill to him & he will distribute the stock to small dealers.
Can i transfer the security deposit of Rs 20000 to Master dealer which is standing as liability in my books?
Please guide solution & process if yes..
let suppose I am Manufacturer of PVC Pipe. I appointed small dealers for sale of my product for that i kept Rs 20000 as refundable security deposit when they start work with me. Now i had opened a Master dealer in their area & i will bill to him & he will distribute the stock to small dealers.
Can i transfer the security deposit of Rs 20000 to Master dealer which is standing as liability in my books?
Please guide solution & process if yes..
06 July 2022
Yes, you can transfer the amount no problem.
08 July 2022
Here, it is the responsibility of the deposit receiver to refund the amount when the contract between them gets over. So, unless there is any tri-party agreement or the consent obtained from the small dealer, you should not hand over the responsibility to your master dealer.
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