THE BOARD OF DISCIPLINE THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

IN THE MATTER OF COMPLAINT OF PROFESSIONAL OR OTHER MISCONDUCT UNDER THE COMPANY SECRETARIES ACT, 1980

DC/327/2015

Order reserved on: 7th July, 2017 Order issued on : ,i-u~1,~t.~► 1o+

M/s. GEE Limited .... Complainant

Vs.

Mr. Ganesh Nalawade ACS-37828 .... Respondent

Present: Mrs. Meenakshi Gupta, Director (Discipline)

FINAL ORDER

1. The Board of Disciplineexamined the Complaint, Written Statement, Rejoinder, prima-facie opinion of the Director (Discipline).

2. The Board of Discipline noted the following: -

(I)

The Complainant has inter-alia alleged that the Respondent's Unethical conduct as working in two companies as a Key Managerial Personnel as Company Secretary i.e. M/s.GEE Limited and M/s. Skyline Millars Limited.

(ii) The Respondent has inter-alia stated that: -

a) He joined his current Company M/s. Skyline Millars Limited on 8th June, 2015 as Company Secretary. Due to slowdown in the Company's business and operations, he was not paid salary in time. He searched other job and was selected by the Complainant (M/s. GEE Limited) through one Recruitment Consultancy Firm.

b) Since service with M/s. Skyline Millars Limited was on probation, and as per the terms of employment letter, both had a right to terminate the employment by giving one month notice or salary in lieu thereof, he agreed and joined the Complainant on 15th September, 2015, after tendering his resignation with immediate effect through email dated 10th September, 2015. So the allegation of his working with two companies as KMP as Company Secretary is totally wrong and false.

c) At the time of his selection he was informed that the Complainant is in full compliance of all applicable laws and all the statutory registers, records and other compliances are in order and updated, but after joining on 15th September, 2015 within few days he was surprised and disappointed with the claims made by the Complainant. The Directors were expecting him to complete all the pending compliance work of years within ❑ day or two without giving him the sufficient time to apply mind and analyse the implications and he was totally disturbed.

d) Thereafter, M/s. Skyline Millars Ltd., and its Directors assured him of timely salary and offered him to rejoin the Company which he accepted and left the Complainant Company w.e.f. 29th September, 2015 after informing them and the Recruitment agency associated with Complainant.

e) Further, the Complainant also filed a false criminal complaint against the respondent alleging sharing and parting with their intellectual proprietary rights/knowhow with their competitors. He was also called by the police authorities, which he attended personally and submitted his statement to them, to which police authorities were also convinced. He is from commerce back ground and does not have any technical knowledge of the domain in Complainant's business. So the question of his understanding and sharing of their technical and proprietary intellectual knowledge/rights with their competitors does not arise and the criminal complaint made against him clearly shows the frustration and ill motive of the Complainant.

(iii) The Complainant also highlighted the flow of events as below:

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a) Right after the Annual General Meeting on Saturday, 261h November, 2015 (Sunday closed), the Respondent came to the office on Monday, 28th September, 2015 for few hours and left early at 15.25 HRS and abruptly remained absent from 29th September, 2015 as per the details of Attendance and later on the Respondent informed over the phone to Mr. VinayakPharse, one of the Complainant's office staff, that due to sad demise of one of his relative, he is going at native place and would remain absent for three days. The company accepted the same on humanitarian grounds.

b) After three days, the Respondent did not resume the work; neither informed the company nor attended phone calls of the Company. The company on its own on Monday, 5/h October, 2015 called the office of M/s. Skyline Millars Ltd, the previous employer and surprisingly came to the know that the Respondent was in meeting with his company's Managing Director.

c) This proves that the Respondent even after joining the company on 15th September, 2015, took official leave and was simultaneously working with M/s. Skyline Millars Ltd. This is an out and out case of an employee being on one Company's payroll & simultaneously, working in another.

d) The Complainant denies the allegations made against him by the Respondent and submits that the Respondent had confirmed the company that he would be joining the company on or before 24th August, 2014 and to overview the status he came to meet the Managing Director on 12" August, 2015 and spent more than eight hours which is enough time to judge the compliance status, furthermore, all the compliances are now getting updated electronically and the company had a responsible person to look after secretarial compliances who left and also engaged a Practising Company Secretary to look after

the compliances of the company, to whom the Respondent also met.

e) The Complainant denies the allegations levelled against it and submits that the Company had provided him a Lenovo Laptop alongwith carry case which contained all the secretarial and other important data. The laptop is connected to the server data and the Respondent being in a position of KMP had access to all financial as well as secretarial data and for transfer of data to any storage device like pen drive /hard disk, one need not have a technical knowledge and informed that the company was forced to take such legitimate precautionary action. The Respondent's being from commerce background is fully capable of interpreting and reading all financial and industry data. Customers lists, vendors and even product pricing is very important in our industry and any leakage of the same could be detrimental to any company.

f) The Complainant further submitted that the Respondent had frequently requested the company to re-consider him and also meet personally on 9th September, 2015 to Ms. Payal Agarwal (Director-Finance) and Mr. UtsavKapadia (Non-Executive Director) and apologised for his earlier unprofessional act and submitted his case to the management stating that he had received Rs. 5 Lac cash from his previous employer which lured him to stay back with his previous company. However in the 1st week of September, 2015, when his salary was not processed by his previous company, he decided to come back to the Complainant.

g) The Respondent's indecisive, whimsical and unprofessional approach costs four months recruitment exercise which caused stress and cost to placement consultants.

h) The Complainant further stated that the Respondent not only disturbs the company's reputation but also reputation of the Institute and requested the Institute to take appropriate action for the same.

3. The Board of Discipline considered the prima facie opinion dated 15th June, 2017 of the Director (Discipline)that the Respondent is prima-facie not guilty of professional misconduct under the Company Secretaries Act, 1980 for the acts and/or omissions alleged by the Complainant in his complaint.

4. The Board of Discipline noted the following observations of the Director (Discipline) in this complaint: -

a) The Respondent has tendered his resignation to M/ s Skyline Millars Limited with immediate effect vide his email dated 10th September, 2015 before joining the Complainant w.e.f. 15,h September, 2015. The terms of appointment allowed terminable of services with one month's notice on either side or on payment of one month's salary in lieu thereof. Hence, the Respondent has done nothing wrong or unethical.

b) The Respondent in the said email had offered his readiness to come on date of AGM to M/ s Skyline Millars Limited and this email was duly shared with the complainant.

c} The Complainant has provided the copy of duly accepted offer letter dated 22nd July, 2015 from the Complainant to the Respondent. Although, the Respondent had resumed his duties with the Complainant w.e.f. 15th September, 2015. No formal appointment letter provided by the Complainant to the Respondent found to be enclosed in the Complaint.

d) The Respondent in his written statement has also confirmed that he had rejoined M/s. Skyline Millars Limited and leaving the Complainant w.e.f. 29th September, 2015 after informing the Complainant and the Recruitment agency associated with Complainant. It is pertinent to mention that the Offer letter dated 27th July, 2015 of the Complainant contains no terms and conditions with regard to termination of service by either party.

e) The Respondent stated of having underwent in an enquiry procedure of the Complainant by the Police authorities, which has also been confirmed by the Complainant in its Rejoinder dated 04th January, 2016 as a legitimate precautionary action for their important data including private and confidential information. It has been observed that nothing could be established against the Respondent by the Complainant.

f) The Complainant fails to put on record documentary evidence to substantiate its allegations of unethical conduct and working in two

oard ot Colsc. companies as a Key Managerial Personnel as Company Secretary against the Respondent.

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g) The allegation of disturbing the reputation of the Institute also does not hold any water.

5. The Board of Disciplineat its meeting held on 7th July, 2017, after considering the aforesaid observations, material on record, prima-facie opinion of the Director (Discipline) and all the facts and circumstances of the case, agreed to the prima-facie opinion of the Director (Discipline), that the Respondent is "Not Guilty" of Professional or other misconduct under the Company Secretaries Act, 1980for the acts and/or omissions alleged by the Complainant in his complaint.

CS Dines ndra Arora Member

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