1989 (2) TMI 350 - HC - Companies Law

Summary

Issues Involved:
1. Termination of the petitioner's service.
2. Eviction of the petitioner from residential quarters.
3. Filing of a criminal case in Bombay under Section 630 of the Companies Act and Section 406 of the Indian Penal Code.
4. Territorial jurisdiction of the court in Bombay to entertain the criminal case.

Issue-Wise Detailed Analysis:

1. Termination of the petitioner's service:
The petitioner was appointed as an assistant medical officer at Tata Main Hospital, Jamshedpur, and was given residential quarters by the company. After 17 years of service, the petitioner's services were terminated abruptly on October 3, 1985. The petitioner challenged this termination in the Labour Court at Jamshedpur, and the proceedings were pending.

2. Eviction of the petitioner from residential quarters:
Post-termination, the company demanded that the petitioner vacate the residential quarters, which he refused. Consequently, in 1986, the company filed an eviction suit in the Munsiff's Court at Jamshedpur, seeking possession and mesne profits. This suit was being contested and was pending.

3. Filing of a criminal case in Bombay under Section 630 of the Companies Act and Section 406 of the Indian Penal Code:
In June 1988, the company filed Criminal Case No. 54/S/88 in the court of the Additional Chief Metropolitan Magistrate, 33rd Court, Ballard Pier, Bombay, under Section 630 of the Companies Act and Section 406 of the Indian Penal Code. The complaint stated that the petitioner had no right to occupy the staff quarters after his services were terminated. The company argued that the premises belonged to it, and all accounting of income, losses, assets, and liabilities, including remuneration and emoluments of officers and employees, were maintained at the head office in Bombay. The company claimed that all accountability within the meaning of Section 181(4) of the Criminal Procedure Code arises in Bombay alone.

4. Territorial jurisdiction of the court in Bombay to entertain the criminal case:
The petitioner filed a petition to quash the process issued on the grounds of lack of territorial jurisdiction. The court noted that the venue of an inquiry or trial is primarily determined by the averments in the complaint. The court found that the basis for filing the complaint in Bombay was artificial and lacked justification. The court observed that the essence of the offence under Section 630(1)(b) of the Companies Act and Section 406 of the Indian Penal Code is the wrongful withholding or retention of the property, which took place in Jamshedpur. The complaint did not allege that the petitioner had to account for the property in Bombay, only that the company's liability to account was in Bombay. The court emphasized that the wrongful withholding of the property occurred in Jamshedpur, and thus, the case should be filed there.

The court referred to various precedents and legal principles, stating that the consequence of the act must be part of the offence for Section 179 of the Criminal Procedure Code to apply. The court rejected the company's argument that the loss suffered in Bombay due to the petitioner's refusal to vacate the premises could invoke the jurisdiction of the court in Bombay. The court also dismissed the argument that Section 462 of the Criminal Procedure Code could be invoked to cure the lack of territorial jurisdiction.

Order:
The court quashed the process issued in Case No. 54/S of 1988, pending in the Court of the Additional Chief Metropolitan Magistrate, 33rd Court, Ballard Pier, Bombay, and made the rule absolute accordingly.