• Client threatening to go legal but I am not an employee

Hello 

I along with few friends started a firm that is into web development in Kerala. I was designated as the CEO because of my experience in the field. However, the fellow team mates didnt understand the concept of business and they wanted the revenue to be shared immediately which was against my thoughts and vision. Hence my actions of saving money for company use such as marketing, advertising, client acquisition etc were considered as unwanted expense and I was thrown out of the company. 
They have asked me to electronically accept their condition of me not being a part of the company anymore and I did that. Despite me spending some amount for the company from my pocket, I was asked to pay a sum of 10,000 INR as settlement. Since I wanted to settle things, I paid them and everything was over. 

Few days back I got a call from a client of that company, who paid an advance sum when I was working in the startup. However, It seems the client didn't get what he wanted from the company and is unhappy. So he wants me to either reimburse the money or find a solution. I told him I am no longer a part of the company, but he wants me to contact the others and find a solution. 

The client was aware of me being thrown out of the company as he had once called me up and asked what happened etc. He paid some money to the company after this as well. And now apparently, he blames its my responsibility to find him a solution. 

Please note, the firm wasn't registered at the time when I was working with them. I still doubt its registered now. There is no trademark or anything legal to prove the existence of the company, The payment was apparently received in cash.  

My Questions:

1: First of all I need to be clear whether, I am legally liable to answer to his concerns?  Am I legally responsible to settle this?
 I have all the emails the company has wrote to me saying I am no longer a part of the company and their acceptance of my resignation. 

2: The other thing is, I came to know, few key people of the company who brought this client to the company is now working for the client itself [The one who took the advance is also a part of the client's company], and right now I am running an institute and its going quite well. Recently my interview came in a newspaper as well and then suddenly I get this call. Can this be an intention to defame me? 

3: What are the legal supports I an get for this matter?

4: What all could be the possible legal suits he can file against me? 

Looking forward for you expert advice and thank you so much for your valuable time. 

Regards
Asked 1 year ago in Criminal Law from Trivandrum, Kerala
Religion: Hindu
Hi, as per law Company is an artificial person and it has separate legal entity but in your case the company is not registered so it is an unregistered company and then all the members are liable for the amount.

2. But is your case as the amount paid by the client is in cash so it is very difficult to prove before the court that he has paid the amount.

3. Client has to file a suit for recovery of the amount before the court in order to get the amount.

4. You contest the case on merits in order to disprove your case.

5. You have good case on merits so contest the case on merits.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
1) your query is not clear as to whether a partnership firm or company was formed by you and others 

2) if it was company and you were merely CEO you are not personally responsible to the client 

3) if client was dissatisfied with work done by company he had to sue the company for damages 

4) as employee you have no personal liability 

5)?it appears since you are doing quite well now they want to extort money from you by blaming you for work done on the project 
Ajay Sethi
Advocate, Mumbai
23370 Answers
1224 Consultations
5.0 on 5.0
1) if partnership firm had been formed by you with other partners even after retirement youwould continue to be liable to third party unless By an agreement entered into by you with other partners and third party you are discharged 

2) section 32 reads as under 

Section 32. RETIREMENT OF A PARTNER.

(1) A partner may retire -

(a) with the consent of all the otter partners,

(b) in accordance with an express agreement by the partners, or

(c) where the partnership is at will, by giving notice in writing to all the other partners of his intention to retire.

(2) A retiring partner may be discharged from any liability to any third party for acts of the firm done before his retirement by an agreement made by him with such third party and the partners of the reconstituted firm, and such agreement may be implied by a course of dealing between such third party and the reconstituted firm after he had knowledge of the retirement.

(3) Notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them which would have been an act of the firm if done before the retirement, until public notice is given of the retirement
Ajay Sethi
Advocate, Mumbai
23370 Answers
1224 Consultations
5.0 on 5.0
1) you are no longer running business with yiur friends 

2) yiu have entered into settlement with your friends paid Lumpsum amount and quit the organisation 

3) client was aware of your exit and continued to do business with your friends and paid further money for doing the web development work 

4) you are not liable to reimburse him if he is not satisfied with work done by your friends 
Ajay Sethi
Advocate, Mumbai
23370 Answers
1224 Consultations
5.0 on 5.0
1. A partnership firm does not require a mandatory registration. The liability of partners is to the extent laid down in the partnership deed. The client can proceed only against the firm and possible the members, in view of the fact that there is no partnership deed. However, no liability can be mounted on an ex partner. The remedy to the aggrieved is available only against the firm which is a separate entity.

2. If at all he files a lawsuit for damages against you the court will give you a fair opportunity to defend yourself. 
Ashish Davessar
Advocate, Jaipur
18190 Answers
449 Consultations
5.0 on 5.0
1: First of all I need to be clear whether, I am legally liable to answer to his concerns?  Am I legally responsible to settle this?
 I have all the emails the company has wrote to me saying I am no longer a part of the company and their acceptance of my resignation. 

The evidences in your possession will prove that you were just an employee of that company and since your services were terminated you are no more responsible for any claims against the company. You can reply absolving the responsibility in case you get a letter directly from the client. 




2: The other thing is, I came to know, few key people of the company who brought this client to the company is now working for the client itself [The one who took the advance is also a part of the client's company], and right now I am running an institute and its going quite well. Recently my interview came in a newspaper as well and then suddenly I get this call. Can this be an intention to defame me? 

As suspected by you, this may be a foul game operated against you by your enemies or competitors   So dont get deterred by such fictitious calls, they may not convert into any legal issue in the absence of any substantial evidence against your involvement in the claim or anything directly against you. If you get anything in black and white and then consult a local lawyer and give a fitting reply based on the merits in your side. 




3: What are the legal supports I an get for this matter?

What is the support you expect?,  There is no liability on your side towards the company or its client hence need not worry.




4: What all could be the possible legal suits he can file against me? 

He has no grounds to file any legal suit against you, let him initiate and see on what basis he has approached law for this subject and then decide to defend and challenge his case. 
T Kalaiselvan
Advocate, Vellore
14151 Answers
127 Consultations
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