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1992 DIGILAW 335 (GUJ)

Yogeshkumar Kantilal Shah v. Gujarat Steel Tubes LIMITED

1992-10-15

M.S.PARIKH

body1992
M. S. PARIKH, J. ( 1 ) ). It is the petitioners conviction under section 630 (1) of the Companies Act, 1956, hereinafter referred to as the Act and sentence of payment of fine in the sum of Rs. 250/-, in default simple imprisonment for 15 days, which have been complained of in this Criminal revision Application under Section 397 of the Code of Criminal Procedure, 1973, hereinafter referred to as the code. ( 2 ) FACTS in Brief: The petitioner came to be employed in respondent No. 1-Company as a maintenance Engineer (Electrical ). By virtue of his employment, the respondent no. 1-Company allotted to him flat bearing No. F-10 in the Gujarat Steel tubes Staff Officers Colony at ahmedabad and the petitioner was residing in the said flat since 1978. The respondent No. 1 Company put to an end the services of the petitioner with effect from 4-2-1986. It was the case of the respondent No. 1-Company that although the possession of the flat in question was called for from the petitioner-accused, he did not hand it over to the respondent No. 1-Company and that is how he wrongfully withheld the same. The respondent No. 1-Company, therefore, filed Criminal case No. 1995 of 1986 under Section 630 (1) of the Act in the Court of the judicial Magistrate First Class (Second court), Ahmedabad (Rural) at Narol. ( 3 ) IT appears from the judgment of the learned Magistrate that the complaint was directed for investigation under Section 156 (3) of the Code and the ultimate police report revealed that the matter was of a civil nature. However, it appeared io the learned Magistrate that there was a prima facie case under Section 630 (1) of the Act, appearing from the police papers and, therefore, he directed process in the form of summons to be issued to the petitioner. The petitioner pleaded not guilty to the charge under the aforesaid provision of the Act. The result was the trial of the matter before the learned Magistrate and order of conviction as aforesaid passed on 29-1-1988. On the same day, the petitioner came to be sentenced to pay fine in the sum of Rs. 250/-, in default to undergo simple imprisonment for 15 days. The result was the trial of the matter before the learned Magistrate and order of conviction as aforesaid passed on 29-1-1988. On the same day, the petitioner came to be sentenced to pay fine in the sum of Rs. 250/-, in default to undergo simple imprisonment for 15 days. ( 4 ) THE second part of the order indicates that the petitioner was directed to hand over peaceful and vacant possession of the flat in question by virtue of provision contained in Section 630 (2) of the Act, failing which he was sentenced to undergo simple imprisonment for three months. ( 5 ) THE petitioner had taken the matter in appeal by way of filing Criminal Appeal no. 11 of 1988 in the Sessions Court at ahmedabad (Rural) at Narol and the learned Sessions Judge by his judgment and order dated 7-5-1988 confirmed the conviction and sentence as aforesaid. He, however, directed the petitioner to hand over the possession of the flat in question on or about 7-5-1988. ( 6 ) FEELING aggrieved with and dissatisfied by the conviction and sentence, the petitioner has called in question both the aforesaid judgments and orders in this Criminal Revision application as stated above. ( 7 ) IT may, however, be noted that as according to him his services were arbitrarily and without sufficient reason terminated, the petitioner made a grievance before the appropriate government through the Deputy commissioner (Labour) and prayed for appropriate reference being made under the relevant provisions of the Industrial disputes Act. However, since the reference was delayed, he was required to approach this Court by filing Special civil Application No. 2615 of 1986. He also prayed for interim relief against his eviction from the flat in question. According to the petitioner as the appropriate Government referred the matter to the Labour Court by letter dated 27-6-1986, being Reference No. ICA No. 1357 of 1986, the petitioner requested the labour Court to protect his possession of the flat in question. However, as according to the Labour Court the question was not covered under the industrial dispute and under the reference the prayer for stay was rejected. The petitioner, therefore, filed Special Civil application No. 5749 of 1986 on 23-10-1986, which was placed for hearing before this Court (Honble Mr. Justice r. A. Mehta ). Mr. However, as according to the Labour Court the question was not covered under the industrial dispute and under the reference the prayer for stay was rejected. The petitioner, therefore, filed Special Civil application No. 5749 of 1986 on 23-10-1986, which was placed for hearing before this Court (Honble Mr. Justice r. A. Mehta ). Mr. S. B. Vakil, learned counsel appearing for the company-respondent No. 1 assured to the court that the status quo would be maintained pending admission and it is in this fashion that the petitioners possession of the flat in question was protected. In the context of such proceedings wherein status quo with regard to the petitioners possession of the flat in question was maintained, it should further be noted that the petitioner had vacated the flat in question and handed over the possession thereof to the respondent No. 1-Company. It is under such circumstances that the second part of the order of sentence is not the subject-matter of this revision application and the matter has to be examined from the standpoint of conviction as also the first part of the sentence under Section 630 (1) of the Act. ( 8 ) SHORT submissions of Mr. Pandit, learned Counsel for the petitioner are that the judgments and orders passed by both the Courts below are against the settled principle of law applicable to the facts of the present case to the effect that the dispute which was raised by the present petitioner from the very inception was of a civil nature and it was a bona fide dispute, which answer the requirement of the provisions contained in Section 630 (1) of the Act, inasmuch as (a) the flat-quarter in question allotted to the petitioner was on a monthly rent of Rs. 55/- and the amount of rent was deducted from the petitioners salary, (b) the termination of the service of the petitioner was a subject-matter of reference to the appropriate Labour Court and, therefore, the termination of the petitioners service was also subject to adjudication and, therefore, formed basis of the bona fide dispute of a civil nature, and (c) the petitioners possession of the flat in question came to be protected in Special civil Application No. 2615 of 1986 and thereafter in Special Civil Application No. 5749 of 1986 and as soon as (as per the submission of Mr. Pandit) the protection was lifted, the possession of the flat in question was handed over by the petitioner to the respondent No. 1 - company. ( 9 ) MR. S. B. Vakil, learned Counsel for the respondent No. 1-Company submitted that this is a revision application wherein the disputes raised by the petitioner cannot be considered. According to his further submission pendency of a civil proceeding would not provide a bar to prosecution under Section 630 (1) of the act. ( 10 ) FOR the purpose of appreciating the short question which relates to the conviction and sentence of the present petitioner, it would first be necessary to set out the provision contained in Section 630 (1) of the Act, which reads as under:"630. Penalty for wrongful withholding of property. (1) If any officer or employee 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. " ( 11 ) FOR the limited purpose of showing how the dispute raised by the present petitioner all throughout would be a dispute of civil nature, Mr. Pandit, learned counsel for the petitioner also placed reliance on the provisions of Section 13 (l) (f) of the Bombay Rents, Hotel and lodging Houses Rates Control Act, 1947, which reads as under:" (F) that the premises were let to the tenant for use as a residence by reason of his being in the service or employment of the landlord, and that the tenant has ceased, whether before or after the coming into operation of this Act, to be in such service or employment;"it may be noted that Section 13 (l) (f) of the aforesaid Act confers a ground for eviction upon a landlord by virtue of the very provision contained in Section 13 of the said Act and the respondent no. 1-Company would be entitled to recover possession by filing an appropriate civil suit in the Court of Small causes at Ahmedabad under Section 28 of the aforesaid Act. 1-Company would be entitled to recover possession by filing an appropriate civil suit in the Court of Small causes at Ahmedabad under Section 28 of the aforesaid Act. It may be at once stated here that Section 630 (2) of the act provides for a summary remedy of eviction if the case is covered under the said provision. Section 630 (2) of the Act reads as under:" (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. "in this case the criminal proceeding has reached its logical end and the provision contained in Section 630 (2) of the Act will not be attracted, since during the pendency of this petition and pursuant to the Courts direction the present petitioner did hand over peaceful and vacant possession of the flat in question to the respondent No. 1 - Company. What is important to be noticed is the conduct of the present petitioner in following relevant directions of the Court. ( 12 ) IT is in the light of the aforesaid facts that the dispute which was raised by the petitioner at the earliest has got to be borne in mind. The police report admittedly indicated that the dispute was one of a civil nature. The evidence adduced before the learned Magistrate also indicated that a sum of Rs. 55/- per month was deducted from the salary of the petitioner by, way of rent and there was no evidence with regard to any notice of eviction having been issued by the company to the petitioner under the provisions of the Rent Act. There was evidence before the learned Magistrate to the effect that the petitioner did raise an industrial dispute with regard to the termination of his services. It also appeared in the evidence that interim injunction against the eviction was obtained from this Court by the petitioner, but then that was not in force at the time of the judgment passed by the learned Magistrate. It also appeared in the evidence that interim injunction against the eviction was obtained from this Court by the petitioner, but then that was not in force at the time of the judgment passed by the learned Magistrate. Pausing for a moment here it may be noted that the interim injunction which was earlier obtained by the petitioner continued by virtue of the statement to maintain status quo made on behalf of the respondent No. 1 - company in a subsequent petition filed by the petitioner. The learned Magistrate held that simply because an industrial dispute was pending adjudication before the Labour Court, it could not be held that the petitioner was entitled to retain the possession of the flat in question. He, therefore, passed the impugned judgment and order. Similar was the fate of the petitioners cause in Criminal apppeal before the Sessions Court as stated above. What is then the legal position with regard to the words "having any such property in his possession, wrongfully withholds it" appearing in clause (b) of Section 630 (1) of the Act ? it is in this connection that Mr. Pandit learned Counsel for the petitioner referred to a decision rendered by a learned Single judge of the Bombay High Court in the case of Damodar Das Jain v. Krishna charan Chakraborty reported in (1985) 57 Company Cases at page 115. There it was held that the dispute between the parties was as to the title of the premises and it was a bona fide dispute particularly when the company itself was claiming to be the tenant of the premises and was further claiming to have allowed the accused to occupy the same at the time of his employment, while the accused was claiming himself to be the tenant of the premises directly of the landlord. It was held that such a dispute of the parties was of purely civil nature, which could be left to the Civil Court to determine. ( 13 ) THE above decision of the Bombay high Court came to be affirmed by the supreme Court in the case of Damodar das Jain v. Krishna Charan chakraborli reported in 1990 (67) company Cases at page 564. ( 13 ) THE above decision of the Bombay high Court came to be affirmed by the supreme Court in the case of Damodar das Jain v. Krishna Charan chakraborli reported in 1990 (67) company Cases at page 564. It was held that the question whether the Company could be said to be the tenant of the flat and the question whether after the written agreement of the licence in favour of the Company had expired, it could be said that the Company was a licencee of the said flat, were both questions required to be determined by a Civil Court and could not be determined by a magistrate in proceeding under Section 630 of the Act. ( 14 ) IT is no doubt true, as submitted by Mr. Vakil for the Company, that the purpose of enacting Section 630 of the act is to provide speedy remedy to the company when its property is wrongfully withheld or wrongfully obtained by an employee or ex-employee. The question is, however, whether the property is wrongfully withheld by an employee or ex-employee. The facts of the present case clearly indicate that the dispute which the petitioner raised relates both to his termination as also to his status qua the flat in question. In so far as his termination was concerned, the dispute was a bona fide dispute inasmuch as the appropriate Government referred the matter for adjudication by virtue of the relevant provisions contained in the industrial Disputes Act. In fact, it can hardly be said that the dispute was not a bona fide dispute. In so far as the dispute with regard to his status qua the flat in question was concerned, when interim directions were issued in his favour all throughout, it could again hardly be said that his dispute was not a bona fide dispute. It should be rioted with care that when the petitioner was under a protection of the Court qua his possession of the premises in question, it could hardly be said that he withheld the possession and that too wrongfully ( 15 ) IT is not in dispute that the protection of the petitioners possession of the flat in question was operating till upto the time the present revision application came to be filed and some time thereafter. Added to that is the fact that the petitioner had handed over the possession no sooner the protection came to be lifted In my opinion the words "wrongfully withheld" clearly stand answered by all these aforesaid facts and circumstances, with the result that the conviction and sentence of fine cannot for a moment be sustained. ( 16 ) IT has been submitted on behalf of the petitioner that in a revisional jurisdiction under Section 397 of the code, the petitioner cannot press into service the aforesaid question of law. On a plain reading of the Section 397 of the code, this submission would not stand. This Court can examine the correctness, legality and propriety of any finding, sentence or order recorded by the inferior court. By virtue of Section 401 of the code, the High Court may exercise powers enumerated in Section 386 of the code while exercising its revisional jurisdiction in a case like the present one. In that view of the matter Mr. Vakils submission cannot be accepted. ( 17 ) THE result is that the present revision shall have to be allowed. Conviction of the present petitioner under section 630 (1) of the Act, as also the sentence of fine (which is stated to have been paid) are hereby quashed and set aside. Fine, if paid, shall be refunded to the petitioner. Rule made absolute in the aforesaid terms. Application allowed. .