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1990 (5) TMI 180 - HC - Companies Law

Issues Involved:
1. Whether the proceedings on the criminal complaints should remain stayed until the civil court finally decides the matter.

Issue-wise Detailed Analysis:

1. Whether the proceedings on the criminal complaints should remain stayed until the civil court finally decides the matter:

The facts in all these cases are that Texmaco Ltd., the petitioner, filed criminal complaints against its various employees for not vacating residential accommodations after ceasing to be employees. The accused claimed they were tenants and had obtained a temporary injunction from the civil court restraining the petitioner from dispossessing them forcibly. The learned A.C.M.M. ordered that the criminal proceedings would continue but no final judgment would be given until the civil court decided the matter. The Additional Sessions Judge stayed the trial in the criminal case until the civil suit was finally disposed of. The petitioner challenged both orders.

The primary question was whether the criminal proceedings should be stayed until the civil court decided the matter. The petitioner argued that staying the criminal proceedings would render section 630 of the Companies Act ineffective, depriving the company of summary relief to reclaim its property from ex-employees. The respondent contended that complicated questions of fact and law, such as whether the respondent was a tenant or licensee, should be decided by the civil court first.

In M.S. Shriff v. State of Madras, AIR 1954 SC 397, it was held that criminal matters should generally take precedence over civil proceedings, but no hard and fast rule exists. The Supreme Court noted that if simultaneous prosecution of criminal and civil proceedings would embarrass the accused, the civil suit should be stayed. In Smt. Raminder Kaur Bedi v. Shri Jatinder Singh Bedi, it was found expedient to stay the criminal case until the divorce petition was disposed of due to the defamatory allegations involved. However, the facts of each case determine whether the criminal case or the civil suit should be stayed.

In Atul Mathur v. Atul Kalra [1990] 68 Comp. Cas. 324 (SC), the Supreme Court emphasized that section 630 of the Companies Act aims to provide speedy relief to a company when its property is wrongfully withheld by an employee or ex-employee. The court held that if no bona fide dispute exists, the criminal complaint should not be stayed. In Damodar Das Jain v. Krishna Charan Chakraborti [1985] 57 Comp. Cas. 115 (Bom), the title of the company to the property was genuinely disputed, and it was held that the civil court should decide such disputes.

The respondent relied on Damodar Das and other cases to argue for staying the criminal proceedings. However, in Amritlal Chum v. Devoprasad Dutta Roy [1988] 63 Comp. Cas. 839; AIR 1988 SC 733, the Supreme Court held that section 630 of the Companies Act applies to residential premises allotted to employees who fail to vacate after termination of employment. In Bush India Ltd. v. Lekhraj [1984] Crl. LJ 346, the Bombay High Court stayed the criminal case due to the civil nature of the dispute, but the facts were different from the present case.

The petitioner cited Kishindas Tekchand v. State, AIR 1956 Bom 423, where the criminal case was not stayed as the civil suit was not being diligently prosecuted. In Govind T. Jagtiani v. Sirajuddin S. Kazi [1984] 56 Comp. Cas. 329 (Bom), it was observed that wrongful withholding of the company's property gives rise to criminal liability under section 630 of the Companies Act. The petitioner argued that there were no complicated bona fide questions of fact or law that the criminal court could not conveniently deal with.

The court found force in the petitioner's contention that the respondents had filed civil suits to delay the matter. It was held that the impugned orders could not be sustained, and the criminal court was directed to proceed with the criminal cases in accordance with law. The petitions were allowed.

 

 

 

 

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