1983 (4) TMI 195 - HC - Companies Law

Summary

Issues Involved:
1. Wrongful withholding of company property.
2. Limitation period for filing the complaint.
3. Whether the offence under Section 630 of the Companies Act is a continuing offence.
4. Extension of the limitation period under Section 473 of the Code of Criminal Procedure.

Detailed Analysis:

1. Wrongful Withholding of Company Property:
The company filed a complaint against Ashok Rai under Section 630 of the Companies Act, 1956, alleging wrongful withholding of property. The company claimed that Ashok Rai was employed on 15th November 1971 and was provided with accommodation at 22, Ferozeshah Road as part of his employment. After his termination on 11th October 1976, Ashok Rai failed to vacate the premises despite repeated requests, thus wrongfully withholding the property. The Magistrate initially dismissed the complaint, stating it did not allege wrongful possession or withholding of the property. However, the High Court found this dismissal factually incorrect, as the complaint clearly alleged wrongful withholding, which, if proven, would fall within the ambit of Section 630.

2. Limitation Period for Filing the Complaint:
The Magistrate ruled that the limitation period commenced on 11th October 1976, the date of termination, and since the complaint was filed on 10th December 1980, it was barred by time. The High Court agreed that the limitation period started soon after the termination date. Section 468(1)(c) of the Code of Criminal Procedure specifies a three-year limitation for offences punishable with imprisonment exceeding one year but not exceeding three years. Therefore, the complaint, filed over four years after the offence, was time-barred.

3. Whether the Offence is a Continuing Offence:
The company argued that the offence under Section 630 is a continuing wrong, thus each day of wrongful withholding would reset the limitation period under Section 472 of the Code of Criminal Procedure. However, the High Court disagreed, referencing the definition of a "continuing offence" from a Division Bench of the Bombay High Court. The High Court concluded that the offence under Section 630(1)(b) is complete once committed and is not a continuing offence. They reasoned that once the wrongful withholding began, it could not be considered a new offence each day.

4. Extension of the Limitation Period:
The company contended that the court should extend the limitation period under Section 473 of the Code of Criminal Procedure, which allows for extension if the delay is properly explained or necessary in the interests of justice. The Magistrate had not extended the period, citing no application for condonation of delay. The High Court noted that Section 473 does not require a formal application and that the court has discretion to extend the period if justified. Given the circumstances, including the respondent's assurances to vacate, the High Court deemed it a fit case for extension and directed the trial Magistrate to proceed further in accordance with law.

Conclusion:
The High Court allowed the appeal, remanding the case back to the trial Magistrate for further proceedings, emphasizing that nothing in the judgment should be taken as an expression of view on the merits of the complaint. The parties were instructed to appear before the court on 3rd May 1983.