Is it not mandatory to make fir by a company in case of fraud of rs.50 lakhs?
K.K.Ganguly
(Querist) 28 October 2011
This query is : Resolved
Would the Ld. Experts give their valuable opinion in the following matter?
1) In one Airlines, one Airport Cashier has been charged for committing fraud by using other 4 counter clerks’ (who book ticket, refund money etc) ID & Password when they are found absent as per the master roll (maintained in register entered by hand showing entry & exit time & not supervised).
2) As per their internal investigation it is apprehended that in total Rs.50 Lakhs have been misappropriated from one Air Port only in one year.
3) No Police complain has yet been made & the Cashier has been charge sheeted & suspended since the said 4 retail clerks told that the Cashier had asked & had taken their ID & Passwords.
4) The Cashier attended the enquiry but soon felt that he has been targeted & the enquiry is one sided hence refused to attend giving a letter to that effect.
5) The Cashier then filed a suit in the High Court, Bombay for reliefs & the Airlines challenged the maintainability stating that the matter has to be dealt by Tribunal since it is under Industrial Dispute Act.
Now, at this stage my questions are
a) When such a big misappropriation/fraud to the tune of more than Rs.50 Lakhs in one year, in one Airport, has taken place, is it not mandatory by the Company to report the matter to Police for investigation?
b) Can the Airlines make internal investigation/enquiry, fix responsibility on one Cashier & close the matter.
c) Can any case reference be given in this regard?
d) Is the case to be filed as per Industrial Dispute Act? The law states that when a union is behind an employee then only it becomes Industrial Dispute.
Thanks in advance.
Isaac Gabriel
(Expert) 28 October 2011
a)It is left to the company's dicretion to initiate criminal action.
b)It could be dicided after the out come of the enquiry,either to close or to pursue against the involved.
c)Show cause notice may be issued depending upon the gravity of the case.
d)Since the ID act has been invoked, the other option could be decided after the decision of the tribunal.
prabhakar singh
(Expert) 28 October 2011
Fallacious indeed but it is !that to FIR or not is not mandatory. And those under legal duty to watch the interest of company which is limp in absence of its Directors,can not do any thing on its own in absence of action on the part of its watch men,who are directors to manage the affairs of the company.
But if they fail in their duty to act which in circumstances is necessary,i think the default should be reportable to SEBI or CLB or or ROC or a writ petition can be filed by its ordinary share holders to probe such a grave theft. I mean some thing in equity must be there when law does not lay it necessary to file FIR of theft in funds of a company
by those under duty to look after the affairs of company.
Mr.Isaac Gabriel has answered your all questions in legal perspective but i wish to have an answer from him in equity perspective.
M V Gupta
(Expert) 29 October 2011
For initiating domestic inquiry, filing of FIR with the Police is not mandatory. FIR is necessary to get the accused person punished under the IPC. Domestic inquiry and criminal proceedings can proceed simultaneously.If the delinquent is a workman then the labor court is the proper venue to file any proceedings in the matter.
Isaac Gabriel
(Expert) 30 October 2011
Learned expert Prabahar Singh,The corporate itself had not taken it serious due to obvious reasons,and slow pedalling in the issue,why should others bother? Perhaps settlement could be resorted to off the record.
K.K.Ganguly
(Querist) 30 October 2011
Yes.The Management is trying to wrap it up since they themselves took out huge sum of money. They want to close the matter now by conducting a doctored domestic enquiry & punishing the cashier.
The Cashier has filed a suit in Mumbai High Court against the suspension etc.& the Management states that the High Court has no jurisdiction since it has to be dealt by Tribunal as per Industrial Dispute Act.
My question is
1)Is it an Industrial Dispute or personal dispute? As per one judgement there should be support of union or 25% of total employees for making any dispute as Industrial Dispute. In that case can it not be heard by Mumbai High Court?
