Diversion of profit by partners

I was a partner in a C&F agency representing a specific company. My partners later started another C&F agency for the same company. In 2020, the company reversed a commission, claiming an error. My partners said it belonged to another agency, dissuading me from pursuing the matter.

I left the partnership in 2021. In 2024, I gained access to the financial records of my partners' agency through the company. These records reveal that the reversed commission was transferred to my partners' new agency, even though it was rightfully ours based on the customer it was linked to. My partners misled me and redirected the commission to their agency.

Despite inquiries, neither the company nor my former partners have responded to my emails.

I have only the financial records of both agencies, which I received from the company, as evidence.

Questions:
1. Can my former partners be charged with any criminal offense for diverting the commission and misleading me?
2. Are the financial records from the company sufficient to prove guilt?
3. Where should I file a complaint?
4. Who is liable for my loss, the company or my former partners? What actions can I take to recover my loss?
5. What is the limitation period for filing a complaint/suit in this case?

Asked 8 months ago in Criminal Law

Religion: Hindu

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4 Answers

1) file case of cheating and criminal breach of trust against ex partners

2) file complaint with local police station within whose jurisdiction offence was committed

3) audited accounts of new agency would help you make out a case

4) limitation period for filing suit is 3 years

Ajay Sethi

Advocate, Mumbai

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1. You have stated to have left the company in the year 2021 but you found this cheating activity in the year 2024 only, if this commission was due to you what made you to not to claim the same at that time. If your partners dissuaded you from pursuing the matter then you might have given something in writing which enabled the partner to have those commission to be paid to him, hence in my opinion this transaction may be within your knowledge and you are aware of it therefore you may not be having any case to file against them.

2. The company's financial records are not pertaining to your firm's accounts hence how will it be possible for yo claim them

3. If you still want to go ahead with the legal action then you can approach local police with all your documentary evidences and a complaint narrating your grievances in this regard.

4. The company may not be held liable for your grievances, may be the partner who misled you and got the amount fraudulently transferred to his account would be liable if you have evidences to prove it

5. Three years from the date of event

T Kalaiselvan

Advocate, Vellore

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Dear Client,

Criminal offense for diverting the commission: Your former partners could potentially face criminal charges if they engaged in fraudulent activities, such as diverting funds that rightfully belonged to you. You would need substantial evidence to prove criminal intent, including records, communications, and witness statements.

Sufficiency of financial records: Financial records alone can be a strong piece of evidence but may not be sufficient by themselves to establish criminal guilt. They need to be corroborated with other evidence, such as emails, witness testimonies, and proof of misleading communication.

Where to file a complaint: You can file a complaint with the local police station, the Economic Offenses Wing (EOW) if there is substantial financial fraud, or the civil court, If you decide to pursue a civil suit for recovery of funds.

Liability and Recovery: The former partners are primarily liable if they diverted funds and misled you. If the company facilitated or was negligent in handling the funds, it might also be held liable, especially if there was a failure in their auditing processes. For recovery, file a criminal complaint if there’s clear evidence of criminal activity or file a suit for recovery of the diverted commission.

Limitation period for filing a complaint/suit: For filing a civil suit for recovery of money, the limitation period is generally 3 years from the date when you became aware of the diversion of funds.

Consult with a lawyer to explore all possible legal avenues and ensure timely and effective action. Should you require any further clarification, please do not hesitate to contact us.