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2013 DIGILAW 1657 (BOM)

Ramona Garware v. Deve Paints Ltd.

2013-08-21

K.U.CHANDIWAL

body2013
JUDGMENT: Heard. 2. Rule made returnable forthwith. Heard finally. 3. Learned Additional Chief Metropolitan Magistrate, 40th Court, Girgaon, Mumbai, issued process under Section 630 of the Companies Act,1956 against the petitioner, same is questioned. 4. Mr.Jaideep Garware was appointed as Vice President of Garware Paints. In the year 1988, he took over possession of the flat – suit premises. On December 27, 1989, he was appointed as whole time Director. Petitioner – Smt.Ramona married to Jaideep Garware on April 9, 1992. M/s.Garware Paints Ltd. was taken over by M/s.Deve Paints, under Agreement. Later, Mr.Jaideep asserted as tenant of M/s.Garware Paints Ltd in respect of the said flat. On September 25, 1996, M/s.Deve Paints issued a notice to Jaideep Garware to vacate the flat. He filed declaratory R.A.D. Suit no.1771 of 1996. Thereafter, M/s.Deve Paints instituted, on July 11, 1997, the subject complaint under Section 630 of the Companies Act. In November,1998 due to personal differences, petitioner Smt.Ramona left the said flat. On December 4, 1998 Mr.Jaideep Garware passed away. On December 12, 1998, reading of Will of Mr.Jaideep Garware, keys of the suit flat were handed over to Smt.Ramona Garware. She was put in occupation of the flat. However, in her absence Smt.Anita Garware (mother of Mr.Jaideep) allegedly locked the said premises. Resultantly Suit no.2535 of 1999 was filed by Smt.Ramona Garware under Section 6 of Specific Relief Act. 5. In R.A.D.Suit no.1771 of 1996, Smt.Anita Garware was impleaded as plaintiff in place of Jaideep Garware, same was questioned by Smt.Ramona Garware. Consent terms were recorded on March 21, 2001 in the High Court between Smt.Ramona Garware and Smt.Anita Garware. On April 3, 2001, minutes of order were recorded by the High Court in said Writ Petition no.7529 of 2000. At that time M/s.Deve Paints were represented by its Advocate. 6. Mr.Mahesh Jethmalani, learned Senior Advocate appearing for petitioner says, Section 630 of the Companies Act is quasi criminal. Its primary object is, for company to recover premises from an employee. A liberal interpretation has to be given to the heirs or legal representatives. But it will not attract wild or reprehensible conduct. Same would not be applicable to the petitioner as she has come in occupation of the suit flat after four years, of her own rights as LR of tenant, in April, 2001. A liberal interpretation has to be given to the heirs or legal representatives. But it will not attract wild or reprehensible conduct. Same would not be applicable to the petitioner as she has come in occupation of the suit flat after four years, of her own rights as LR of tenant, in April, 2001. According to him, for application of Section 630 of the Companies Act, any other person has to come in wrongful possession, and heir or legal representative has to stake such claim through an employee. In the instant case, the complainant has acquiesced to possession before judicial forum (High Court) and hence Section 630 of the Companies Act would not be applicable. Her husband had filed tenancy proceedings on October 15, 1996, asserting tenancy rights to the premises. Learned Senior Advocate has also criticised paragraph 9C, 9D and 9E of the complaint petition. 7. Mr.P.B.Shah, learned Counsel appearing for respondent-company viz. M/s.Deve Paints Ltd. says, status of the petitioner in the suit premises is not under independent flavour and rights. She has stepped in the shoes of her husband who asserted tenancy which has not been finally settled. It is pending in Supreme Court, as Ramona lost in two courts. There could not be a tenancy claim by a Vice President or a Director of M/s.Garware Paints as all the assets of M/s.Garware Paints were taken over by M/s.Deve Paints Ltd., including the flat. This is so clear, reading the respective agreements between the parties. The delay that has been caused in impleading the petitioner was due to injunction clamped in suit no.2535 of 1999 in favour of Nihal – Jaideep Garware's younger brother, in which M/s.Deve Paints Ltd. was not a party. 8. The submissions of Mr.Jethmalani that possession of Smt.Ramona Garware petitioner is with her independent rights as tenant, is a defence, not yet settled in any competent forum. Matter is pending before Supreme Court. Any agreement or consent terms between two individuals detrimental to the rights of original owner, will not acquiesce him nor such rights are foreclosed. The order of this Court dated April 3, 2001 in Writ Petition no.7529 of 2000 is explicit. It primarily does not bind respondent M/s.Deve Paints Ltd. or eclipse its rights to the suit flat in terms of Section 630 of the Companies Act. Such proceedings were pending even on 3.4.2001. The order of this Court dated April 3, 2001 in Writ Petition no.7529 of 2000 is explicit. It primarily does not bind respondent M/s.Deve Paints Ltd. or eclipse its rights to the suit flat in terms of Section 630 of the Companies Act. Such proceedings were pending even on 3.4.2001. There is no controversy that Smt.Ramona asserted in several proceedings to be staying with her husband and having left the premises owing to her differences. She is asserting her rights as a widow of Jaideep Garware. Consequently, she is bound to face proceedings under Section 630 of the Companies Act. The legal position in respect of a person staking claims by any other title in civil proceedings is explained by Hon'ble Supreme Court in the matter of “Lalita Jalan & Anr. Vs. Bombay Gas Co.Ltd. & Ors. ((2003)6 Supreme Court Cases)”. Paragraph 23 is relevant, which reads as under:- “23. If an erstwhile or former employee is prosecuted under Section 630 of the Act on account of the fact that he has not vacated the premises and continues to remain in occupation of the same even after termination of his employment, in normal circumstances it may not be very proper to prosecute his wife and dependent children also as they are bound to stay with him in the same premises. The position will be different where the erstwhile or former employee is himself not in occupation of the premises either on account of the fact that he is dead or he is living elsewhere. In such cases all those who have come in possession of the premises with the express or implied consent of the employee and have not vacated the premises would be withholding the delivery of the property to the company and, therefore, they are liable to be prosecuted under Section 630 of the Act. This will include anyone else who has been inducted in possession of the property by such persons who continue to withhold the possession of the premises as such person is equally responsible for withholding and non-delivery of the property of the company.” As also in the matter of “Gopika Chandrabhushan Saran & Anr. Vs. XLO India Ltd & Anr., ((2009)3 Supreme Court Cases 342)”. Observations in para 24 are relevant, which read as under:- “24. Vs. XLO India Ltd & Anr., ((2009)3 Supreme Court Cases 342)”. Observations in para 24 are relevant, which read as under:- “24. The case in hand is the one which falls under the first part of clause (b) of subsection (1) of Section 630. The suit premises was allotted to Mr.C.B.Saran, the predecessor-in-interest of the appellants, in his capacity as a Managing Director of the respondent Company. The appellants herein had no direct relationship with the respondent company. Both of them came in possession of the suit premises through the original allottee of the said premises, namely, Mr.C.B.Saran, who has since died. The company has every right and jurisdiction to preserve its property and to see that the same is not used for purposes other than the one expressed or directed in the articles of association of the company.” So also the learned Single Judge of this Court in the matter of “Abdul Quayaum Ansari Vs. State of Maharashtra, ( 1990(2) Bom.C.R. 437 )”. Observations in para 5 are relevant, which read as under:- 5. The question that has arisen in the present case is whether the provisions of section 630 of the Companies Act can be made applicable also to the heirs and legal representatives of the officer or employee in whose charge the property of the company has been left by the deceased employee. In my judgment, on a proper construction of the said provision, the said heirs and legal representatives would be included in the term "officer or employee of a company". An employee who is allotted a residential accommodation by the company does not occupy it alone, but occupies it along with the members of his family. If section 630 obliges an officer or an employee to return the property of the company, I see no reason why after his death, his heirs and legal representatives who continue to be in possession of the property of the company by virtue of they being the heirs and legal representatives of the officer or employee should be absolved of their liability to return the property to the company.” 9. It is pertinent that memorandum of understanding between the Company – respondent and M/s.Garware Paints does not refer to tenancy to a valuable property, Clause 15 thereof is explicit. The tenancy document primarily is shrouded with militant act to retrograde impact of claim accelerated by the respondent – company. It is pertinent that memorandum of understanding between the Company – respondent and M/s.Garware Paints does not refer to tenancy to a valuable property, Clause 15 thereof is explicit. The tenancy document primarily is shrouded with militant act to retrograde impact of claim accelerated by the respondent – company. Primarily petitioner cannot stake independent claim to retain the flat, as she is bound to face impact of Section 630 of Companies Act. 10 Elaborate exploration of facts was advanced before this Court by the petitioner, however, I am not dealing with the same in detail as before this Court, the controversy is shrunk to a limited aspect as to whether there was sufficiency of material before the learned Judge to issue process. Indeed there was sufficient material to issue process. Rule discharged.