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Calcutta High Court · body

1992 DIGILAW 213 (CAL)

A. C. Bose Alias Ashoke Ch. Bose v. State

1992-06-01

G.R.Bhattacharjee

body1992
Judgment 1. THIS application under Section 482 of the Code of Criminal Procedure has been filed for quashing the proceeding being complaint Case No. 362 of 1990 under Section 630 of the Companies Act, 1956 pending in the Court of the learned Chief Judicial Magistrate, South 24-Parganas at Alipore. The petitioner, Shir A.C. Bose (Ashoke Chandra Bose) was an officer of the Opposite Party No. 2,i. G. E. (India) Ltd., Calcutta Branch (hereinafter referred to as the Company. The Company filed a petition of complaint under Section 630 of the Companies Act, 1956 against the petitioner. The allegation of the Company against the petitioner in substance is that the Company hired the first floor flat at 5/2a, Old Ballygunge Road along with the servant's room at 5/ 1c, Old Ballygunge road under certain terms and conditions and the said flat was allotted to the petitioner herein who was an officer of the Company for his use as his residence during the continuance of his service under the Company and the petitioner occupied the same on 1 -1 -1975. It is also the allegation of the Company that the petitioner tendered resignation from service on 20-4-87 which was accepted by the Company but as the petitioner earnestly requested the Company to allow him to occupy the premises in his occupation for some time just to enable him to procure an alternative accommodation elsewhere, the Company considering his promise to vacate as early as possible allowed him to continue to occupy the same. It is further allegation of the Company that time and again the petitioner was requested orally as well as by letter to hand-over vacant possession of the flat to the Company but the petitioner with dishonest intention to continue his illegal stay took different pleas at different times and did not vacate the same in spite of his undertaking to deliver up possession positively by the end of December, 1991. There are also certain other allegations in the petition of complaint which however need not be mentioned here. Suffice it to say that the learned Magistrate took cognizance under Section 630 of the Companies Act, 1956. 2. There are also certain other allegations in the petition of complaint which however need not be mentioned here. Suffice it to say that the learned Magistrate took cognizance under Section 630 of the Companies Act, 1956. 2. ON the other hand, the plea of the petitioner is that initially he took tenancy of the ground floor of premises No. 5/2a, Old Ballygunge Road of which Shri A.K. Basu was the owner and he was also given possession of one garage and a servant's quarter as a part of that tenancy at the adjacent premises No. 5/1c which was also owned by said Shri Basu and that while he was occupying the said tenancy, the land-lord proposed to him to give better accommodation in the first floor in lieu of the tenancy in ground floor but wanted the tenancy to be taken in the name of the Company and accordingly on the request of the petitioner the Company accepted the proposal of the landlord and there was a lease agreement on 18-12-1974 between the. Company and the landlord and it was settled that the Company would pay Rs.1000/- per month in respect of the said first floor to the landlord. The petitioner thereafter shifted from the ground floor to the first floor. It is the allegation of the petitioner that the Company used to realise the rent from him by deduction from his salary and used to pay the same to the landlord as rent. It is the further allegation of the petitioner that he resigned from the service of the company with effect from 1-6-87 and continued to occupy the said premises as a tenant. The company by a letter dated 22-6-87 intimated the petitioner that it had made an advance of Rs.1000/- to the landlord and the same was recoverable on termination of lease agreement and as the petitioner would be occupying the said tenancy he should refund Rs.1000/- to the company and accordingly the petitioner refunded the said amount to the company. The petitioner however used to pay rent to the Company and the company also used to accept the same and pay the rent to the landlord. The petitioner however used to pay rent to the Company and the company also used to accept the same and pay the rent to the landlord. It is the contention of the petitioner that the Company granted rent receipts in the name of the petitioner and by a letter dated 14-9-87 the Company informed the petitioner that it had no objection if the petitioner entered into an agreement with the landlord in respect of the said tenancy and be a tenant of the same directly under the landlord and in that event the petitioner should pay rent directly to the landlord and all responsibilities would lie with the petitioner. According to the petitioner the landlord was however not willing to record the tenancy in the name of the petitioner and wanted that the Company's name should remain recorded as tenant. In view of these facts and circumstances it is the contention of the petitioner that the criminal proceeding under Section 630 of the Companies Act, 1956 is not at all tenable inasmuch as while the company is a tenant under the landlord of the first degree, the petitioner is the sub-tenant under the Company in respect of the said tenancy which is independent of and unconnected with the status of the petitioner as an employee or for that matter as an ex-employee of the company. The factual position, therefore, is that the company hired the flat as a tenant under the landlord and allotted the same to the petitioner who was their employee at the relevant time to occupy the same for his residential purpose. Subsequently, the petitioner resigned from the service of the company on 1st June, 1987, but in spite of his such resignation he continued to occupy the flat and also paid the rent amount to the Company and the Company in turn paid the rent to the landlord. It also appears that the petitioner after his resignation from service of the Company tried to obtain direct tenancy of the flat from the landlord and the Company had no objection to that but the landlord did not agree to the proposal. It also appears that the petitioner after his resignation from service of the Company tried to obtain direct tenancy of the flat from the landlord and the Company had no objection to that but the landlord did not agree to the proposal. It further appears that there was a written agreement on 12th January, 1989 between the Company and petitioner wherein it was stated that as the petitioner approached and/or requested the company to give him permission to stay at the said flat upto 31st December, 1989 the Company gave him permission to stay in the flat upto 31st December, 1989 on payment of a licence fee of Rs. 1500/- per month to the Company and the petitioner licensee would be bound to give peaceful vacant possession of the said flat to the Company on or before the 1st January, 1990. It was further stipulated in the said agreement that the licence granted thereby would stand revoked automatically and the Company would have the right of re-entry and to take possession of the flat on 1st January, 1990 without any further reference to the licensee and without recourse to any Court of law. It has been submitted by Mr. Bimal Dutta for the petitioner that the facts and circumstances obtaining in the case, including the fact that in spite of his resignation in June, 1987 the petitioner continued to occupy the flat all these years and paid rent to the Company would show that his present occupation of the flat is by no means connected with or related to his status as an employee or ex-employee of the Company. It is his argument that altogether a new relationship, namely, the relationship of landlord and tenant has come into existence between the company and the petitioner after his resignation from the service of the company and that being so the proceeding under Section 630 of the companies Act, 1956 was not tenable and therefore the said proceeding is liable to be quashed. 3. 3. AS regards the above mentioned agreement to vacate the premises by the end of December, 1989 it is stated inter alia in paragraph 11 of the present revisional application that the same was not voluntary, and in order to save himself and the members of his family form being harassed by the men and agents of the Company the petitioner expressed therein that he would leave the premises by the end of December, 1989, but he had no such intention and he was rather willing to continue to remain in possession of the said premises as a tenant under the said Company. The questions whether the said agreement was not a voluntary one and whether the petitioner had no such intention as prima facie appears from the language of the agreement are however all matters of fact which cannot be decided or settled in this revisional proceeding. Going by the prima facie materials placed before this Court I find that by a written agreement dated the 12th January, 1989 the petitioner agreed to vacate the premises of which the Company was the direct tenant under the landlord by the 1st January. 1990. The said agreement read as a whole and in the context of the facts and circumstances do not show that the parties therein has created or intended to create any new relationship between them unconnected with the status of the petitioner as an employee under the company who had since retired. In the first paragraph of the agreement the petitioner has been described as a prematurely retired serviceman by occupation. In the said agreement it has also been stated thus:- And whereas the said a. C. Bose was an employee of the said Company and the said flat was allotted to him as such employee. And whereas the said A.C. Bose has now prematurely retired from the said Company. In the said agreement it has also been stated thus:- And whereas the said a. C. Bose was an employee of the said Company and the said flat was allotted to him as such employee. And whereas the said A.C. Bose has now prematurely retired from the said Company. And whereas the said A. C. Bose has approached and/or requested to the Company to give him permission to stay at the said flat upto 31st December, 1989it is therefore evident that the agreement was entered into with the petitioner as an ex-employee of the company obviously with a view to giving him opportunity to find out or make his own arrangement of accommodation for severing the connection between the Company and its ex-employee in respect of the flat which the ex-employee was given to occupy during his employment and which he was allowed to continue to occupy for some time after retirement to facilitate the making of his own arrangement of independent accommodation. 4. IT appears that the Chief Judicial Magistrate Issued summons to the petitioner on 30-3-1990 and the petitioner also filed a suit being Title Suit No. 376 of 1990 in the 2nd Court of Munsif at Alipore praying for a declaration of his tenancy right in respect of the Suit premises. It may also be noticed intrans connection that the agreement between the Company and the petitioner which was executed on the 12th January, 1989 was not for allowing the petitioner to occupy the flat for any indefinite period. On the other hand, it was for a definite period till the end of December, 1989 with an express stipulation for delivery of possession and right of re-entry on the 1st January, 1990. On the other hand, it was for a definite period till the end of December, 1989 with an express stipulation for delivery of possession and right of re-entry on the 1st January, 1990. The very fact that this agreement was only for limited period and was rather in the form of an undertaking given by the petitioner in favour of the Company to vacate the premises by a particular date clearly indicates that it did not create and there was also no intention of the parties to create any new relationship between the parties in respect of the said flat conferring any independent right on the petitioner in respect of the same apart from embodying a gesture of grace shown by the Company to the petitioner in consideration of the fact that he was an ex-employee of the Company so that he could make an alternative arrangement of accommodation for him in the meantime. At this stage we may look at the provisions of Section 630 of the companies Act, 1956 which is re-produced below: "630. Penalty for wrongful withholding of property (1) If any officer or employees of a company - (a) wrongfully obtains possession of any property of a company or (b) having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act; he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to one thousand rupees. (2) The Court trying the offence may also order such officer or employee to deliver up or refund, within a time to be fixed by the Court, any such property wrongfully obtained or wrongfully withheld or knowingly misapplied, or in default, to suffer imprisonment for a term which may extend to two years", 5. THEIR was at one time a divergence of opinion as to whether the said section 630 also applies to ex-employee of a Company. The controversy has however since been settled by a catena of judicial decisions of the apex court which are noted below. The Supreme Court in its decision in Baldev Krishna us. THEIR was at one time a divergence of opinion as to whether the said section 630 also applies to ex-employee of a Company. The controversy has however since been settled by a catena of judicial decisions of the apex court which are noted below. The Supreme Court in its decision in Baldev Krishna us. Shipping Corporation of India Ltd., AIR 1987 SC 2245 upheld the view of the high Court of Bombay that the term officer or employee of a Company as used in Section 630 applies not only to existing officers or employees but also to past officers or employees if such officer or employee either (a) wrongfully obtains possession of any property, or (b) having obtained such property during the course of his employment withholds the same after the termination of his employment. In the said case the petitioner had been inducted into the flat only by virtue of his capacity as the General Manager of the company's branch office at Bombay but the company allowed him to retain the same on humanitarian grounds for a short period alter his retirement to enable him to find alternative accommodation. This humanitarian and charitable consideration shown by the company was reciprocated by the petitioner by adopting an adamant attitude and he declined to vacate the same on one pretext or another. The petitioner in that case retired from the service of the company on or about September 30, 1984. Prior to that on September 26, 1984 he wrote a letter requesting the company to permit him to continue to live in the company's premises during the period of his accumulated leave after his retirement for a period of six months, undertaking to vacate the flat as early as possible. The company acceded to his request on humanitarian ground and permitted him to stay in the flat for six months after his retirement and in accordance with the company's rules, he was required to pay compensation for the use of the premises. After the expiry of the said period of six months the company requested the petitioner to vacate the premises stating that if he failed to do so, he would be liable to pay higher compensation as per the company's rules. The petitioner however did not vacate. The petitioner also instituted a civil suit seeking a declaration that he was a tenant of the disputed flat. The petitioner however did not vacate. The petitioner also instituted a civil suit seeking a declaration that he was a tenant of the disputed flat. In this background the question that fell for consideration of the Supreme Court in that case was whether such wrongful retention of the flat amounted to an offence under section 630 of the Act. It was in this background the Supreme Court upheld the view of the High Court at Bombay as stated above. The same view also reiterated by the Supreme Court in Amrit Lal vs. Devoprasad Dutta Roy, air 1988 SC 733 as well as in Atul Mathur vs. Atul Kalra 1984)4 SCC 514. In the case reported in (1989) 4 SCC 514 (Supra) the petitioner also filed a suit in the Court of Small Causes against the company and the owner of the flat for a declaration that he was the actual licensee of the flat and for permanent injunction. In the background of the facts and circumstances the Supreme court in that case held the view that merely because the accused had screamingly filed a suit in a civil count it can never be said that the civil court was in seisin of a bona fide dispute between the parties and as such the criminal court should have stayed its hands when the company filed a complaint under Section 630 of the Act and that if such a view was taken it would not only lead to miscarriage of Justice but also render ineffective the salutary provision of Section 630 of the Companies Act. 6. THE position in law is therefore clean in view of the decisions of the supreme Court discussed above that the mere fact that tile accused who was given the occupation of a residential accommodation by the Company in his capacity as an officer or employee of the company, continues to occupy or was allowed to occupy the same for some time after his retirement or resignation will not take him out of the ambit of Section 630. The position however may be different where the company and its erstwhile officer or employee enter into altogether a new agreement relating to the occupation or possession of any property of the company whereby a new relationship is created between the parties independent of or unrelated to the previous status structure between the parties as employer and employee. The position however may be different where the company and its erstwhile officer or employee enter into altogether a new agreement relating to the occupation or possession of any property of the company whereby a new relationship is created between the parties independent of or unrelated to the previous status structure between the parties as employer and employee. In our present case, we have already seen, whatever was the state of affairs after the premature retirement of the petitioner from the service of the company, there never was created any new relationship in respect of the concerned premises between the company and the petitioner independent of or unrelated to their previous status structure. Even the written agreement between the company and the petitioner was only for a limited period and was, in purport and effect, an undertaking on the part of the petitioner to vacate the premises in favour of the company within the stipulated period and in that agreement also reference was made to the petitioner's status as an employee of the company since retired. These arrangements whereby the petitioner was allowed to continue to occupy the flat on payment and to negotiate with the landlord to obtain direct tenancy of the flat from the landlord, and the fact that ultimately on failure of the expected arrangement of direct tenancy, the company allowed him some more time on his undertaking to vacate the flat by a particular date are nothing but liberal transitional arrangements for dismantling an incident which was the product of employer-employee relationship between the parties. By no means it can be said that there was any new arrangement between the company and the petitioner at any point of time after the retirement of the petitioner creating any new relationship independent of or unrelated to the earlier relationship of employer and employee. In the circumstances, I find no reason to hold that Section 630 of the companies Act has no application to the facts and circumstances of the case. The revisional application is dismissed. 7. HOWEVER, having regard to the facts and circumstances, I direct that in case the petitioner gives an undertaking in the court below, namely, the court of the ld. The revisional application is dismissed. 7. HOWEVER, having regard to the facts and circumstances, I direct that in case the petitioner gives an undertaking in the court below, namely, the court of the ld. Chief Judicial Magistrate, Alipore, within 15 (fifteen) days from this date that he will vacate the premises within a period of 3 (three) months from the date of the undertaking and if he vacates the premises in terms of such undertaking, in that case the opposite party company shall not proceed with the criminal proceeding and the company shall withdraw the same. It may be noted here that the ld. Advocate for the opposite party company here and right now gives an oral undertaking before this Court to that effect about withdrawal of the prosecution in the event the petitioner vacates the premises in terms of this order. Except for the purpose of taking undertaking as directed above and matters consequential thereto, the proceeding in the court below shall remain stayed for a period till the expiry of the period mentioned herein or till a fortnight from this date in case no undertaking is given by the petitioner within that time before the court below, whichever is earlier. 8. THE revisional application stands disposed of accordingly. Let this order be communicated to the court below by a special messenger at the cost of the opposite party. The special messenger's cost be deposited by the opposite party by Wednesday next 3.6.92.