Seller has filed criminal case
2) you are not personally responsible for payment of money
3) Meghalaya does not have jurisdiction
4) case has to be filed against new company
5) jurisdiction for defamation case is Meghalaya
Filed an FIR for a financial transaction between companies
My firm is a pvt ltd company and I am one of the directors. The company is based out of Bangalore. We had worked with a vendor in Meghalaya who is a sole proprietorship who delivered us goods (like furniture) for our projects in 2 projects in Assam and 1 project in Nagaland. We never had any agreement between our company and his company. We paid amount for 2 projects and a liability of 16 Lakhs is pending for 1 project. As we ran into financial issues, we sold the company to a new owners who took over all our assets and liabilities of the company. They requested me to be director for 1 year which I will be out after March 2023. As the new owners failed to pay this liability, the vendor has filed a complaint in his state Meghalaya against me in the Police station seeking for recovery of the money. The police accepted his complaint and filed an FIR under section 420 IPC, against me. My questions about this transaction are as below from Company Law perspective 1) Is this a criminal case or civil case. And if its a civil case does he need to go to NCLT or civil court for recovering his money 2) Without having an agreement between the companies can he file a criminal complaints. 3) Does he have a jurisdiction to file a complaint in Meghalaya. The goods have been delivered in Assam and our company is present in Bangalore. He is based out of Meghalaya, does it provide him with Jurisdiction to file a complaint in Meghalaya 4) As a director of this company am I personally liable for this financial transaction both for civil or criminal nature. 5) Are the new owners who took over the company will be liable for the amount or as this transaction happened when I am the director, I will be liable even though I sold the company 5) Even though other directors are present in the company he has filed case against me only. Is this legal 6) Considering the above If this case can be considered as False FIR and can I go against him with a False FIR case and defamation. If I can go where will be the jurisdiction. Is it Bangalore (where the company is ) or Hyderabad (where I reside) or Meghalaya because the FIR has been filed there. Please confirm
Asked 1 year ago in Business Law
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5 Answers
See basically it's a civil recovery case (NCLT has no jurisdiction as the amount is below 1cr), but once the person some how manage the police ( you know how police are managed) and registered FIR for cheating, now you have to defend that case, you should file Quashing of FIR before Meghalaya High court as the your case is of civil nature plus you don't have liability to pay the debt personally the liability is of company.
Once you get your FIR Quashed..he has to file civil recovery suit either at assam or at Bangalore
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1. Actually it is a civil case and remedy of recovery is available to them by filing the civil suit.
2. He can file anything but same is not legal.
3. If part of transaction is made at meghalaya then he can file but you can object the jurisdiction in court.
4.Yes if the transaction was during your position as director.
5. That depends on averment of complaint why he did it. The complaint actually will be against company
6. You can file.that in Mumbai if.you make out Mumbai as your jurisdiction
1. A complaint given before police is a criminal case and not a civil case.
2. This is a complaint lodged against the individual and not agaisnt the company.
3. As far as the complainant the cause of action arose i the place where he resides, hence Meghalaya becomes his jurisdiction.
.4. Since he has filed the complaint against you in the individual capacity you may have to challenge the same in the trial proceedings alone.
5. Since there is no contract or agreement between any company, the company cannot be held liable except for the person who had directly dealt with the vendor.
5. If you had dealt with the transaction earlier, then in the absence of any contract between the companies, he can take action against the individual alone.
6. There is no defamatory ingredients available in this complaint registered against you, because as far as he is concerned he is the aggrieved person and he has transacted with the supply on the basis of the oral orders received from a person, may be he was representing a company.
Thus it would be improper to handle such issues in the individual capacity while it is done on behalf of the company or firm.
The jurisdiction is very well within Meghalaya state, hence you cannot claim exemption except to attend the case at a court in Meghalaya state.
1. This is a criminal case.
2. It is possible to file a criminal case for cheating under Section 420 IPC even if there is no written agreement between the parties. However, whether the vendor's action qualifies as cheating is a matter that would need to be established in court.
3. yes, but deciding the same is little complex
4. depends on your role in the transaction
5. Yes
6. Yes
In a criminal case, liability is individual and not vicarious. Please note that you will have to take immediate steps to protect your interest. You can get in touch with me, I have good experience in handling croporate matters and we have represented clients in Meghalaya before.
Regards
