A reflection on the business environment in India. Though Narendra Modi’s efforts might bring ease of business in terms of procedures and processes followed by businesses, but what about the typical indian behavior of deceit, the inherent urge to ditch and cheat someone for personal gains, even if it amounts to trampling all ethics and prudent behaviour.
Be it the opening of a new business, hand holding with an existing one, joining as a partner or taking a franchisee, the oft seen pre planned intent to separate out with the partner / franchisor over some pretext or the other, the sooner sufficient experience is picked up, is a deep rooted malaise in the psyches of many, more so the first timers and novices.
Though reasons could be many, but such behavior often stems from a persons lack of fear in cheating others. This in turn sprouts from the lack of implementing specific laws protecting franchisors or businesses in the country or to put it simply, the inability of the Judiciary to gauge and act decisively in cases where premeditated intent of deceit in such hand holding arrangements and planned separations are visible. Though its true that refraining clauses do cover and protect the interests of a business through a series of agreements, notarized or registered, memorandum of understandings (mou’s) between parties etc, but what’s the point of having these if the state is unable to give justice at the right time. “Delayed Justice is Justice denied”. Delayed justice doesn’t help businesses as an opportunity lost is lost for ever applies more stringently to a business in today’s ever changing environment.
Story Highlighting Individual Chicanery & Fraud
This below story highlights what has been said and how entrepreneurs and businesses struggle to cope up with an environment of deceit and corruption that ails individuals in Indian society.
Believing in her employee’s imperative need to move to another city, so as to save her marriage and to retain a source of livelihood, the founder and CEO, a female herself, took pity and obliged. She instructed her company management to initiate the opening of a branch in Chandigarh. She further confidentially told her staff, “Please ensure that things are eased out as much as possible for Annu (the employee in context), as she is going through serious mental trauma, struggling to bring her personal life back on track.” This was Delhi, year 2012-13.
Annu Bijarnia, had joined the company as a novice and happened to work directly under the famous nutritionist and lifestyle celebrity Shubi Husain, at her Safdarjung Enclave centre. In the couple of years that followed, Annu got trained and groomed by Shubi herself.
Being close to the owner, Annu managed to extract perks and privileges from the company, much beyond her stature and capabilities. A 2 room fully furnished, leased company flat in a posh Safdarjung Enclave neighborhood with free water, electricity, phone etc that many other employees in the company envied her for.
Despite all this, as destiny would have it, Annu apparently got entangled in her web of domestic problems, needing to deal with her husband’s plans to leave his job with the Border Security Force (BSF), worries of his subsequent employability, shifting to her in laws at Chandigarh and so on. Annu started sharing her personal distress with Shubi, seeking advice and help and in the process winning over her sympathies and compassion.
Continuing with Annu’s request and acting on Shubi’s directions, without losing much time the management came up, with a draft MOU which Annu tweaked per her convenience and willingly signed. A token amount was mutually agreed, to be chipped in by Annu in the franchise branch for Chandigarh, that took shape. Through this token amount, Annu on her part ensured to show her undivided interest towards the venture and in the process to make the company believe in her story of desperation to shift. The company on its part safeguarded its own business interests by ensuring Annu’s full indulgence, long term continuity and commitment towards running of the clinic. This was more important for the company, as being located in a different city, the company was to eventually become dependent on Annu for all operations and management of the clinic.
With all formalities done up, the Company went ahead with the investment, took a 2500 sq ft of space on long lease for 9 years in Sector 8, Chandigarh at an annual rental of 16.8 lacs/yr. As the other Director revealed, “The agreement had a lock in period of 1 year which the Company signed, took the onus of risk on itself and deposited 5.6 Lacs as security and advance rentals. All this was done in good faith, on face value and personal rapport and relationship that Annu Bijarnia enjoyed with Shubi Husain.”
Some of the clauses in the MOU (a copy available with N4M), like the one at para 2.1 read, “No opening of the centre…
As brought out by one employees of the Company, “The signing of the MOU at the time looked trivial and secondary, only to be consigned to files for documentation, but as an afterthought, none knew the kind of fraud Annu and her husband Himanshu, had in mind, then.”
In the meanwhile, the Company, on a fast track, got the interiors to the 2500 sq ft of space done up. However still, the couple of intervening months, before the start of operations, made the company bear the rentals, all by itself. Simultaneously, by the time the actual operations started in (2013), Annu Bijarnia’s husband was expecting his release from the BSF so as to join Annu at Chandigarh, a well timed move. However since many things don’t go as per plan so, it’s alleged that her husband Himanshu, deserted the Army (BSF) and joined her wife at Chandigarh. N4M team’s efforts to get the Deserter’s List from the BSF HQ’s in Delhi, to verify the allegation hasn’t fructified till this report went in for print.
With the opening of the centre, the entire management and responsibility of running the centre was entrusted to Annu Bijarnia who with a sly smile acknowledged and vowed to run the centre loyally and in the true spirit as envisaged in the terms of the Memorandum of Understanding that she signed. It was just the advertising that remained centrally with the company at Delhi, but that too was controlled by Annu and the advts’ were released on her recommended date, time and publication. The leads from such advertisements in Chandigarh used to come directly to her through a cell phone provided by the company. She also used to call the clients and followed up with them per her convenience as part of the management and with literally nil interference from the parent company.
With full fledged operations, having started by _________________-, apparently things seemed going smooth, but as alleged, by the 5th month onwards the sales started plummeting.
Choudhary adds, “Smelling something fishy, the company alerted its key staff and through some employees while checking up the accounts came across a few carbon copies of receipts (deposited with the company) that had an amount written on them which differed from the services provided and amount mentioned in the original receipt that was handed over to the clients. A few of the originals were thus recalled from the clients, only to confirm the fraud being committed by Annu Bijarnia on the company.”
Fraud And Forgery Committed
Scanned copy of Bills highlighting the fraud and forgery committed by Annu Bijarnia i.e. Received 45000/- from the client but submitted only Rs 30000/- to the Company thereby cheating and defrauding the company of Rs 15000/- .
On checking further, it was found that Annu Bijarnia was involved in a major scam, from the start of operations, cheating the company by committing forgery and making fake bills, thereby defrauding the company to the tune of several lacs of Rupees.
Having established irrevocable proof against Annu Bijarnia, the company continued further investigations. In the words of one of its Director’s Mr Choudhary, “To our utter surprise and horror we came to know from the Asstt Manager Dr. Savita, that Annu Bijarnia had opened a replica centre within a short distance from the clinic and that she had been passing most of the clients and leads to her husband Himanshu, who was sitting and running her newly opened clinic, just a few blocks away.”
Filing of Police Complaint By The Company:
With such breach of faith having come to the notice of the company, the Management, left with no option, filed a criminal complaint with the SSP Office praying for filing an FIR under sections 420 (Fraud/cheating) and 120b (criminal planning) of the IPC. A Notice was also served on Annu Bijarnia through company’s lawyer Mr Vishnu Sharma. An excerpt from the Application filed with the SSP Office in the month of ___2013 is reproduced below:
Beginning of the excerpt from the complaint submitted to SSP Office, Chandigarh..
“…that as per clause I of the MOU, Ms Annu Bijarnia assured and undertook that she shall not during her association with the company and for a period of 01 year, in the event of dissolution of the said MOU, directly or indirectly on her account, or jointly, or in collaboration with any other person firm, company or body corporate carry on business or engage in the sale or trade secrets or otherwise deal in Health Care & fitness or any other service, products, goods machinery or device, sold, traded or dealt in or rendered by the company.
It was further agreed that no activity which may otherwise deemed to be illegal or harmful to the company’s interests and business shall be allowed.
6. It is shocking to note that Ms Annu, in utter violation of MOU signed with the company is running a similar centre by the name of Detox, located at SCO 211,1st floor Sector 36D, Chandigarh. She is running the said centre in association with her husband and is diverting majority of our customers to that centre. As a result, our clientage has gone down during the past few months and our company has suffered a loss in revenues to the tune of Rs 20 to 25 lacs.
7. That it has further come to our knowledge that said Ms Annu, while issuing receipts to our clients has committed bungling of funds. The receipts issued to our clients reflect a different amount than what is reflected in the office copy of the receipt. Two such receipts are enclosed for your perusal. A detail audit is being conducted to assess the exact amount of embezzlement.
8. That the above stated conduct constitutes a criminal offence and calls for prosecution.It is therefore…”
While the Police mulled filing of an FIR, Annu’s husband Himanshu along with her brother in law, Vikram (a govt employee and a stake holder in the business with Annu), approached the Company management and requested not to pursue the case and rather settle it amicably. They also accepted to get the money involved in the cheating by Annu Bijarnia deducted from her original chip in, to settle the case and pleaded to allow them to continue with the operations of their own Clinic named DETOX CLINIC, that was opened in violation of the terms of agreement and was then located at SCO 211, 1st floor Sector 36D, Chandigarh.
Since the parent company was based out of delhi and with Annu and her in-laws, trying to stop the operations of the company by force (various calls to PCR 100 were made and available in Police Diary), the company was left with two options. In the words of Mr Choudhary, “One was to go all out, pursue with the police and ensure getting Annu Bijarnia arrested for committing forgery and cheating. The second option was to accept their apologies and pleadings, personally made by Annu and her brother in law and to go for a settlement.”
Under the circumstances and sustained pressure of getting the operations that Annu and her family had disrupted, back on line, the company chose the second option. The company thus also parted ways with Annu, per her wish and a Dissolution deed was signed.
However the company, keeping Annu’s unethical and tainted track record in mind, ensured to retain a mention in the key lines of the dissolution deed that in case if Annu Bijarnia, her husband Himanshu, her brother in law Vikaram or any relatives, in any way obstructed the company’s operations, then in that case the company reserved the right to stop the disbursal of payments that it had agreed to give Annu from her initial share of deposit, minus the amount adjusted on account of theft, forgery and cheating committed by Annu Bijarnia.
A Premeditated and Cunning Ploy:
Looking back at the entire sequence of events, it sums up to be a premeditated case. Annu played a cunning ploy by first getting close to the company management, then exuberating self pity, convinced her boss into agreeing to open a clinic in Chandigarh where her in laws resided. Thus laying the groundwork for her husband to leave the BSF and join her in Chandigarh, so that both could open a clinic together.
Thus the opening of the DETOX clinic nearby corroborates with the staff’s allegations that Annu Bijarnia was stealing leads and client data from the parent company and passing on the same to her husband and thus the consequent fall in sales of the company since most of the leads were being sourced through advertisements that had a hefty cost element attached.
The company thus maintains that Annu Bijarnia’s criminal intent was premeditated and in active connivance with her husband. All this is liable to attract section 120b of criminal planning. Over and above the theft, tampering of bills and the fraud played on the company was a clear cut case under section 420 (IPC), that made filing of an FIR and her arrest imminent. The company intends pursuing up with the Higher Courts for reopening of an investigation into the entire case. The company further demands that the DETOX Clinic be shut with immediate effect till such investigation is completed.
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