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Allahabad High Court · body

1993 DIGILAW 594 (ALL)

MISRI LAL SHAH v. STATE OF U P

1993-10-11

M.C.AGARWAL

body1993
M. C. AGARWAL, J. These are applications under Section 482, Cr. P. C. , seeking to quash th complaints lodged against the applicants under Section 630 of the Companies Act. 2. Since the points involved in all these cases are identical, with the consent of parties, they were heard together and are disposed of by this common order. 3. The applicants, excepting R. Antony in Criminal Misc. Application No. 8158 of 1991, were employees of M/s. Hindalco Industries Limited, Renkoot, district Sonbhadra. As employees of the said company, they were allotted residential quarters by the employer for purposes of their residence during the term of employment. Applicant Jagdhari Ram was retired by the company from service with effect from 31 st December, 1991. The other appli cants have been dismissed from service by the said employer on various dates. In some cases, industrial disputes arising out of the dismissal/retirement have been referred to the Labour Court/industrial Tribunal and the same are pending. In some cases, conciliation proceedings under Rule 4 of the U. P. Industrial Disputes Rules are pending and in some cases, the employees applications under Section 6-E (2) (b) of the U. P. Industrial Disputes Act are pending. After the dismissal/retirement, the employer M/s. Hindalco Industries Limited asked the respective applicants to vacate the residential fiats occupied by them. Since the employees did not comply with the companys request, complaints Section 630 of the Companies Act have been lodged by the employer and the accused-applicants have been summoned by the Special Chief Judicial Magis trate, Allahabad. 4. R. Antony, the applicant in Criminal Misc. Application No. 8158 of 199j, was an employee of M/s. Renusagar Power Company Limited. He has been dismissed with effect from 15th December, 1990. and Adjudication Case No 3 of 1990 about his dismissal is pending. The employee is also alleged to have made a complaint against the employer under Section 6-F of the Indus trial Disputes Act. The employer M/s. Renusagar Power Company Limited has lodged a complaint against the applicant because the latter has not vacated the companys residential accommodation that is occupied by him. 5. The employer respondents filed counter-affidavits and the learned counsel for the applicants wanted time to file rejoinder-affidavits. The employer M/s. Renusagar Power Company Limited has lodged a complaint against the applicant because the latter has not vacated the companys residential accommodation that is occupied by him. 5. The employer respondents filed counter-affidavits and the learned counsel for the applicants wanted time to file rejoinder-affidavits. The learned counsel for the employer respondents then stated that he would not rely on the counter-affidavits and, therefore, the cases were heard on the agreement that the counter-affidavits filed by the employer respondents would not be looked into. 6. The facts are not in dispute. All the applicants were allotted residen tial quarters by the employer in connection with their employment of the applicants has been terminated by retirement and dismissal etc. and in spite of oial and written requests by the employer, the employees have not vacated the residential quarters. A perusal of the dates of dismissal etc. and the dates on which the company lodged the complaints under Section 630 of the Com panies Act would show that the company has not acted in haste and the complaints were filed sufficiently after the termination of employment. 7. Section 482, Cr. P. C. under which the present applications have been moved relates to the inherent powers of the High Court to prevent abuse of the process of any Court or otherwise to secure the ends of justice. The conten tions raised on behalf of the applicants is that the proceedings under the labour laws regarding the termination/dismissal etc. of the applicants are pending and till those proceedings are decided, the initiation of the proceedings under Section 630 of the Companies Act is an abuse of the process of Court which this Court should prevent by exercising its inherent jurisdiction. 8. Section 630 of the Companies Act provides penalty for wrongful withholding of property. If any officer or employee of a company wrongfully withholds the companys property, he shall on a complaint of the company. . . . . . be punishable with fine which may extend to one thousand rupees. Under sub-clause (2) of Section 630, the Court trying the offence has the power to order the officer or employee to deliver the property wrongfully withheld or in default, to suffer imprisonment for a term which may extend to two years. 9. As is evident, in these cases, the residential flats were allotted to the employees in connection with their employment. 9. As is evident, in these cases, the residential flats were allotted to the employees in connection with their employment. The employment Las been terminated and, therefore, the continued occupation of those quarters by the employees after the companys request to vacate the same prlma facie amounts to wrongful withholding of the flats. 10. Learned Counsel for the applicants relied upon a judgment of the Honble Madras High Court in re J Loomchand Salt v. The Official Liquidator, AIR 1953 Mad 595 in which it was held that to render the accused liabh to penalty under Section 282-A (equivalent to present Section 630), there should be proof of fraudulent intention. This view does not seem to be tenable in view of the judgment of the Honble Supreme Court in Baldeo Krishna Shahi v. Shipping Corporation of India, AIR 1987 SC 2245 and Atul Mathur v. Atul Kalra, 1990 (68) Com Cases 324. In Baldeo Krishnas case (supra), the Honble Supreme Court observed as below : "the beneficent provision contained in Section 630 no doubt penal, has been purposely enacted by the Legislature with the object of providing a summary procedure for retrieving the property of the company (a) where an officer or employee of a company wrongfully obtains possession of property of the company, or (b) where having been placed in possession of any such property during the course of this employment, wrongfully withholds possession of it after the termination of his employment. It is the duty of the Court to place a broad and liberal construction on the provision in furtherance of the object and purpose of the legislation which would suppress the mischief and advance the remedy. " 11. In both these cases, the officers of the Company had not vacated the residential accommodation provided by the company after termination of their employment and the Honble Supreme Court held that they could be rightly dealt with under Section 630 of the Companies Act. The question of any fraudulent intention, therefore, does not arise and what is important is the wrongful withholding of the property. 12. Learned Counsel for the applicants also contended that the dues of the employees in relation to gratuity etc. have not been paid by the employer and, therefore, as held by the Madras High Court in re, K. Sundersa Alyer, AIR 1950 Mad 659 , the withholding of the companys property was not wrongful. 12. Learned Counsel for the applicants also contended that the dues of the employees in relation to gratuity etc. have not been paid by the employer and, therefore, as held by the Madras High Court in re, K. Sundersa Alyer, AIR 1950 Mad 659 , the withholding of the companys property was not wrongful. That was a case where a Director of the company bad withheld certain immoveable properties of the company. The said Director had obtained a money decree against the company and under the decree, a first charge on the disputed moveable properties was created in favour of the said Director. It was on these facts that it was held tnat the Director could not be proceeded with under Section 282-A of the Companies Act, 1913 for withholding those properties. As is evident, that was a case based on totally different facts. In the present applications, there is no allegation whatsoever that any dues of the employees have been withheld by the employer and. for that reason, they are justified in withholding the possession of the flats in question. This point, therefore, is not available to the applicants in the present proceedings. 13. It was contended that in respect of some of the employees, industrial disputes are pending before the Labour Court/industrial Tribunal and in respect of some, the employers applications under Section 6-E (2) (b) of the U. P. Industrial Disputes Act are pending and, therefore, the proceedings under Section 630 of the Companies Act could not be validly launched. 14. As is admitted in all these cases, the employer has terminated the employment by passing orders of dismissal from service and, in one case, by making at order of superannuation. The contention of the learned Counsel for the applicants is that these orders are not final unless upheld by the authorities dealing with industrial and labour disputes. The learned counsel has not pointed out to me anyjprovision of law which provides that an order of dismis sal, termination or superannuation would be effective only after it is approved by the labour authorities or the industrial dispute, if any, raised in that regard is finally decided. The learned counsel has not pointed out to me anyjprovision of law which provides that an order of dismis sal, termination or superannuation would be effective only after it is approved by the labour authorities or the industrial dispute, if any, raised in that regard is finally decided. Of course, if the Labour Court or the Industrial Tribunal holds that the termination or dismissal was unlawful, the same would be deemed to be ineffective right from the beginning, but unless such an order is passed, the termination/dismissal holds good and is effective for all purposes. 15. Learned counsel for the applicants referred to the definition of workman in Section 2 (z) of the U. P. Industrial Disputes Act which includes within the category of workman any such person who has been dismissed, discharged or retrenched. This definition is intended to serve a special purpose relating to the termination of disputes of persons who have been dismissed, discharged or retrenched and who challenged the same by raising industrial disputes. If such persons were not included in the definition of workman then the authorities under the Act would have had no jurisdiction to be a workman. It is for that purpose that in the definition of workman, dismissed, retrenched or discharged employees have also been included. This definition, however, does not, in my view, mean that for all purposes, such person conti nues to be a workman. This special purpose is clear from the definition of workman in the said sub-section (z) because it is clearly specified that for the purpose of any proceedings under this Act in relation to an industrial dispute, a dismissed, discharged or retrenched employee is included in the definition of workman 16. The contention, therefore, that till the industrial dispute is finally decided the relationship of master and servant continues between the employer and the employee and, therefore, the employer cannot ask the employee to vacate the residential quarter allotted to him is not tenable. 17. It was lastly contended that the employer has moved applications under Section 6-Ei 2) (b) of the U. P. Industrial Disputes Act ip some cases and those applications are pending. Copies of such applications have not been appended with the petitioners under Section 482, Cr. P. C. and, therefore, the exact nature aud scope has not been specified. 17. It was lastly contended that the employer has moved applications under Section 6-Ei 2) (b) of the U. P. Industrial Disputes Act ip some cases and those applications are pending. Copies of such applications have not been appended with the petitioners under Section 482, Cr. P. C. and, therefore, the exact nature aud scope has not been specified. Section 6-E of the U P. Industrial Disputes Act provides that during the pendency of any conciliation proceedings before a Conciliation Officer or Board or of any proceedings before the Labour Court or Tribunal in respect of any industrial dispute, the conditions of service etc. of the employee shall remain unchanged. Sub-sec tion (2) (b) however, provides that during the pendency of any such proceedings in respect of an industrial dispute, the err ployer may in accordance with the Standing Orders applicable to a workman concerned in such dispute, for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise, that workman, as is evident, all the employees, in the present applications, have been dismissed or retired from service. The employ ment is completely terminated and the question of further punishing them for any misconduct or of changing their conditions of service does not arise. 18. As stated above, these are petitions under Section 482, Cr. P. C. seeking to invoke the inherent jurisdiction of the High Court to prevent an abuse of the process of law. No such abuse of the process of law has been made out and prima facie the employer is proceeding in accordance with law. Though the employees may have a chance of success in the proceedings pending under the U. P. Industrial Disputes Act, but, as observed by the Honble Supreme Court in P. Jayappan v. S. K. Perumal, AIR 1984 SC 1693 , a mere expectation of success in some proceedings in appeal or reference cannot come in the way of institution of criminal proceedings. The Honble Supreme Court was dealing v. ith a prosecution under Section 276-C of the Income Tax Act and it was contended on behalf of the accused that the assessment proceedings under the Income Tax Act had not been concluded. The Honble Supreme Court held that the pendency of the assessment proceedings had no relevance to the question of maintainability of the prosecution and the same could not be quashed under Section 482, Cr. The Honble Supreme Court held that the pendency of the assessment proceedings had no relevance to the question of maintainability of the prosecution and the same could not be quashed under Section 482, Cr. P. C. on the ground that it is a premature one. The Honble Supreme Court observed as follows : "if may be that in an appropriate case the criminal court may adjourn or postpone the hearing of a criminal case in exercise of its discre tionary power under Section 309 of the Code of Criminal Proce dure if the disposal of any proceeding under the Act which has a bearing on the proceedings before it is imminent so that if may take also into consideration the order to be passed therein. Even here the discretion should be exercised judicially and in such a way as not to frustrate the object of the criminal proceedings. There is no rigid rule which makes it necessary for a Criminal Court to adjourn or postpone the hearing of a case before it indefinitely or for an unduly long period only because some proceeding which may have some bearing on it is pending elsewhere. But this however, has no relevance to the question of maintainability of the prosecution. The prosecution in these circumstances cannot be quashed on the ground that it is a premature one. On a careful consideration of the relevant provisions of the Act, we are of the view that the pendency of the re-assessment proceedings cannot act as a bar to the institution of the criminal prosecution for offences punishable under Section 276-C or Section 277 of the Act. The institution of the criminal proceedings cannot in these circumstances also amount to an abuse of the process of the Court. " 19. The above principles apply to the facts of the present case with equal force and, therefore, the filing of the complaints under Section 630 of the Companies Act by the employers against the present applicants cannot be held to be an abuse of the process of the Court. 20. For the above reasons, the present petitions have no force and are hereby dismissed. The interim order staying the proceedings before the special Chief Judicial Magistrate, Allahabad, are hereby vacated. 21. 20. For the above reasons, the present petitions have no force and are hereby dismissed. The interim order staying the proceedings before the special Chief Judicial Magistrate, Allahabad, are hereby vacated. 21. It is made clear that any observation made in this judgment are restricted to the disposal of the present applications only and are not intended to conclude or prejudice any contention that may be raised by the parties at the trial court. Petition dismissed. .