Tatineni Venkata Krishna Rao v. K. C. P. Sugar and Industries Corporation Ltd. Vuyyuru
2004-11-24
A.GOPAL REDDY
body2004
DigiLaw.ai
A. GOPAL REDDY, J. ( 1 ) THIS batch of revision cases, having common features, arises from a common point of significance in relation to the offence under Section 630 of Companies Act, 1956 (for short the Act ) and its interpretation and hence, they have been heard and disposed of together. ( 2 ) THE brief facts of these revision cases are as follows: the petitioners are the employees of the 1st respondent-corporation and were allotted quarters to occupy the same for the convenience of the work. As per the terms and conditions, the petitioners have a right to stay during their tenure of employment or till their allotment is terminated by a notice either oral or in writing by the corporation. When the petitioners illegally participated in the strike and did not resume the work in spite of repeated demands made by the 1st respondent, they were dismissed from the service as per clause 26 of the Standing orders of the 1st respondent. On such dismissal, they have no right to continue to withhold the possession of the quarters of the 1st respondent and hence, they were directed to vacate their respective quarters forthwith by notice, dated 2/- 2-2001. In spite of notice, instead of vacating the quarters, the petitioners continued in occupation of the property and approached the Industrial tribunal for appropriate relief. Hence, the 1 st respondent filed a petition before the Special judge for Economic Offences, Hyderabad, for eviction of the petitioners under the provisions of Section 630 of the Act. After taking into consideration the oral and documentary evidence, the learned Special judge came to the conclusion that the complainant/1 st respondent proved its case against the accused for the offence under section 630 of the Act and the accused were sentenced to pay a fine of Rs. 1,000/- each in default, to undergo simple imprisonment for three months each and they were also directed to vacate the premises and hand over the possession of the quarters to the complainant/1 st respondent within one month from the date of the said judgment, failing which, the accused hae to undergo simple imprisonment for a period of three months each and also directed to pay usual rental charges for such occupation.
( 3 ) AGGRIEVED by the same, all the accused preferred appeals before the Metropolitan sessions Judge, Hyderabad, contending that they are workman of the complainant/1 st respondent and since they raised Industrial dispute before the Industrial Tribunal, which are pending, order of eviction will cause hardship to them as they are residing therein with their family members. The learned metropolitan Sessions Judge after elaborately going through the facts of the case dismissed the appeals confirming the conviction and the sentence passed by the learned Special judge for Economic Offences, Hyderabad, and directed the accused to vacate the quarters within one month from the date of the judgment, if they are not already vacated. Aggrieved by the same, the present revision cases are filed. ( 4 ) LEARNED Counsel for the petitioners/ accused contends that Section 630 of the Act does not attract for due eviction of the petitioners and hence, the complaints filed by the 1st respondent are liable to be dismissed and the petitioners/accused are entitled for acquittal. ( 5 ) IT is convenient to consider the said submission in the context of Section 630 of the Act and a decision of the Apex Court in lalitha Jalan and another v. Bombay Gas company Limited and others. Section 630 of the Act reads as hereunder: section 630 Penalty for wrongful withholding of property: (1) If any officer or employee of a company (a) worngfully 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 article and authorized by this Act; he shall, on the complaint of the company or any credit or contributory thereof, be punishable with fine which may extend to ten 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. ( 6 ) IN the above case the 1st respondent had taken on lease a flat in a building and the same was allotted to N. K. Jalan, in his capacity as director of the company.
( 6 ) IN the above case the 1st respondent had taken on lease a flat in a building and the same was allotted to N. K. Jalan, in his capacity as director of the company. A-1 and A-2 are the son and daughter-in-law of N. K. Jalan and A-3 is the son of A-1 and they were in occupation of the premises after the death of n. K. Jalan. The company purchased the flat and filed a Criminal complaint under Sec. 630 of the Companies Act against A-1 who is the son of N. K. Jalan and others and it was stayed in a company petition and finally, the magistrate issued process against the accused. Aggrieved by the same, the accused moved an application for recall of the process issued against them and for their discharge and the same was rejected by the Metropolitan magistrate, Mumbai. Thereafter, they preferred the petition under Section 482 cr. P. C. and under Article 227 of the constitution of India in the High Court of mumbai challenging the process issued against them contending that they cannot be prosecuted under Section 630 of the Act and the complaint filed against them is an abuse of the process of the Court and it is liable to be quashed and the said petition was dismissed. ( 7 ) THE apex Court in paragraph No. 6 held that the main ingredient of the section is wrongful withholding of the property of the company or knowingly applying it to purposes other than those expressed or directed in the articles and authorized by the Act. The object of enacting the section is that the property of the company is preserved and is not used for purposes other than those expressed or directed in the articles of association of the company or as authorized by the provisions of the Act. On relying various earlier judgments viz. , in Baldev Krishna Sahi v. Shipping Corporation of India Limited (1987) 4 SCC 361 ) wherein the apex Court at paragraph 7 held that"7.
On relying various earlier judgments viz. , in Baldev Krishna Sahi v. Shipping Corporation of India Limited (1987) 4 SCC 361 ) wherein the apex Court at paragraph 7 held that"7. 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 his 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. " ( 8 ) THE Supreme Court further disagreeing with the observations in J. K. Bombay Limited v. Bharti Matha Mishra (2001) 2 SCC 700 while approving the view expressed in abhilash Vinodkumar Jain v. Cox and Kings (India) Limited (1995) 3 SCC 732 wherein it is held that"the Object Section 630 of the act is to retrieve the property of the company where wrongful holding of the property is done by an employee, present or past, or heirs of the deceased employee or officer or anyone claiming the occupancy through such employee or officer. The view expressed in Abhilash vinodkumar Jain case clearly subserves the object of the Act, which is to the effect of recovering the possession of the property belonging to the company. "held, the view expressed in Abhilash vinodkumar Jain case is justified and should be accepted in interpreting the provision of section 630 of the Act. ( 9 ) IN view of the same, the submission made by the learned Counsel for the petitioners that the quarters, which were allotted to the petitioners would not come within the purview of the property possessed by the 1 st respondent cannot be accepted. It is strenuously argued that all the petitioners who are not the employees of the company, but only the workmen cannot be evicted inasmuch as the employees of the company can only be evicted. I see no force in the said submission.
It is strenuously argued that all the petitioners who are not the employees of the company, but only the workmen cannot be evicted inasmuch as the employees of the company can only be evicted. I see no force in the said submission. ( 10 ) THE very fact in the employment cards of all the employees disclose that all of them are the employees of the 1st respondent, which include clerical, workmen or others for all purposes including for the purpose of payment of gratuity. ( 11 ) IN view of the foregoing discussion, I am of the view that the impugned judgments do not require any interference of this Court. Hence, all the revision cases are liable to be dismissed. Accordingly, these criminal revision cases are dismissed.