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Missappropriation of funds

(Querist) 24 March 2017 This query is : Resolved 
Dear Experts,

A Staff, who was responsible in handling cash was found in misappropriation of funds. The same was brought to the notice of the management. On the same day the management had discussions with the staff and during the discussion the staff pleaded to avoid legal proceeding against him and as it affects his future however, admitted to repay the funds misappropriated. Keeping this in view, and his future career, the management declined to proceed legally and now seek your kind suggestions in this matter how to go about.

What kind of agreement could be executed between the organization and him for the amount.

1. Can we have a promissory note from him with the following matter?

2. Can we have blank cheques from him as a security for the payments.

3. Or any other alternative remedy to receive the funds.

Promissory Note

I, Sri. _____________________ S/o. _________________________
promise to pay ____________________________ or order, the sum of Rs.________ (Rupees ______only) towards the financial irregularities occurred during my tenure as accountant.

Please suggest.
DR.VEDULA GOPINATH (Expert) 24 March 2017
Compromise deed confession statement promissory note pdc .
Ms.Usha Kapoor (Expert) 25 March 2017
Promissory note is acceptable.
Vijay (Querist) 25 March 2017
Appreciate your instant replies with suggestions. Would you please through some insights on compromise deed and confession statement. Who should be the first party and second party, stamp paper etc.
Guest (Expert) 25 March 2017
Seems to be some imaginary case!

To be frank, I do not find any substance in your description.

However, if there is any slight truth, can you clarify on the following points:

1) Total amount of misappropriation?

2) Nature of transactions in which the employee misappropriated the funds?

3) Since how long he had been misappropriating the funds?

4) Why the employee is not made to recoup the misappropriated amount in one lump sum?

5) The total number of employees working in your organization?

6) Whether yours is a public limited company, private company, Government organization or a private firm?

Vijay (Querist) 25 March 2017
Dear Sir,
I take this opportunity to appreciate for your kind questions placed before me, the clarifications as follows.

1.Misappropriation Rs 48000
2.Creating fictitious vouchers, bills paid by cheques were used again as cash paid. He used to pay his personal phone bills and account the voucher in organisation, while verification of telephone no we got to know.
3.Since one year it's happening
4.He is willing to pay on a monthly basis

Guest (Expert) 25 March 2017
So, surprisingly, for full one year, nothing could be detected by the supervising authorities of the organization that approved the false bills on regular basis?

Anyway, when you have agreed on request of staff not to proceed legally to avoid any effect to his future career, where is the question of compulsion for the management to accede to his other request for payment on monthly basis? Why not compelled to repay in lump sum?

Further, why the management is compelled to enter in to a compromise deed?

In fact, your supplementary question, "Would you please through some insights on compromise deed and confession statement. Who should be the first party and second party, stamp paper etc," makes me believe that yours is merely an academic query just to obtain a specimen of compromise deed and confession statement.

Otherwise, where is the need of retaining a fraudulent employee in the organization?

Anyway, if there is even a slightest truth in your story, I would like to suggest you to hire services of some local lawyer to get the customised documents to serve your needs, whatsoever that be.
Rajendra K Goyal (Expert) 25 March 2017
Agree with the expert DR.VEDULA GOPINATH.
Vijay (Querist) 25 March 2017
Dear sir,
i must assure that it is not a academic query, since the staff requested to give chance of repaying monthly to run his family we want to ensure he will pay by making any agreement. however he is willing to give any thing that organisation feels, he is no more with the organization, we made him resign. please suggest

Guest (Expert) 25 March 2017
When made to resign, how you are sure that he will will make any compromise agreement, promisory note or pay monthly emi?
Vijay (Querist) 25 March 2017
He is ready to execute an agreement and he is willing to post dated cheques.
Guest (Expert) 25 March 2017
So far no clarification has been found to be convincing.

Anyway, I have already suggested you to hire services of some local lawyer to get the customised documents to serve your needs, whatsoever that be.

Vijay (Querist) 25 March 2017
Thank you all for your suggestions
Dr J C Vashista (Expert) 26 March 2017
1. How are you concerned with the query?

2. Why did the management agree to drop legal action against an employee found misappropriation of funds?

3. What can be one of the other good reasons for the management to allow such an employee continue in service when he is caught red- handed?

4. What type of organisation/establishment/ company the case pertain to viz; government, psu, private company or a Baniya shop involving your query?
Vijay (Querist) 26 March 2017
I am director operations, the employee pleaded to avoid legal due to his future career, keeping this in view we have forgiven, however he agreed to pay back. He is not continuing in the service as i mentioned earlier. It's a NGO.


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