2007 (8) TMI 456 - HC - Companies Law

Proceedings under section 630 of the Companies Ac- Held that - Once the accused/applicant is terminated and he has been issued notice to vacate the quarter, unless the stay is granted by the Labour Court or the concerned authorities to his termination order, he would not be entitled to retain the accommodation allotted to him by virtue of his service condition. Therefore, the authorities referred by the learned counsel for the applicant may not be helpful to him to justify retention of the residential accommodation granted to him as a condition of service, after he ceases to be in service. Consequently, the proceedings under section 630 of the Companies Act would not be bad only because the permission required under section 33(1) of the Industrial Disputes Act is not obtained. Application cannot succeed.

Summary

Issues:
Challenge to rejection of discharge application under section 482 of the Code of Criminal Procedure for offence under section 630 of the Companies Act.

Analysis:
1. The respondent filed a complaint under section 630 of the Companies Act against the applicant for wrongfully holding a residential quarter without legal right or permission. The applicant moved an application for discharge, citing a pending case in the Labour Court challenging his termination. The rejection of the discharge application was challenged in the present case.

2. The applicant argued that as per section 33(1) of the Industrial Disputes Act, the complainant was required to obtain written permission before initiating proceedings under section 630 of the Companies Act. The applicant relied on legal precedents to support his contention that the complainant's failure to obtain such permission made the discharge application valid.

3. On the other hand, the respondent contended that since the applicant was no longer in service after termination, he was obligated to vacate the quarter allotted as a condition of his service. The respondent argued that the applicant had no right to retain the quarter after termination, and the notice to vacate was issued accordingly.

4. The court analyzed the situation and concluded that the applicant's claim for discharge based on the pending Labour Court proceedings was not valid. Despite the Industrial Disputes Act's requirement for permission before altering service conditions, the court found that since the applicant had been terminated and was not actively working, he could not retain the residential accommodation.

5. The court emphasized that the applicant's entitlement to the quarter was tied to his service status, and once terminated, he could not continue to occupy the accommodation. The court dismissed the application, stating that the proceedings under section 630 of the Companies Act were justified even without the permission required under the Industrial Disputes Act.

6. Therefore, the court upheld the rejection of the discharge application, emphasizing that the applicant's termination and lack of active service rendered his claim for retention of the quarter untenable. The court highlighted the importance of service status in determining entitlement to company-provided accommodation and dismissed the application accordingly.