1997 (4) TMI 539 - HC - Indian Laws

Issues Involved:
1. Jurisdiction and inherent powers of the Chief Judicial Magistrate under Section 630(2) of the Companies Act, 1956.
2. Wrongful withholding of company property by a former employee.
3. Applicability of Supreme Court precedents.
4. Interpretation and scope of Section 630 of the Companies Act, 1956.
5. Invocation of inherent powers under Section 482 of the Cr.PC and Article 227 of the Constitution.

Detailed Analysis:

1. Jurisdiction and Inherent Powers of the Chief Judicial Magistrate under Section 630(2) of the Companies Act, 1956:
The learned Chief Judicial Magistrate rejected the petitioner-company's application under Section 630(2) on the grounds that he lacked jurisdiction to exercise inherent powers under the Cr.PC. The Magistrate held that unlike the Apex Court or the High Court, he could not direct the delivery of possession of the flat at the interlocutory stage pending the conclusion of the trial.

2. Wrongful Withholding of Company Property by a Former Employee:
The petitioner-company argued that the respondent No. 2's right to occupy the flat was coterminous with his employment, which ended on June 30, 1994. The company had allowed the respondent to stay until December 31, 1994, on humanitarian grounds. However, the respondent continued to occupy the flat beyond this period, which the petitioner-company claimed constituted "wrongful withholding" under Section 630(2) of the Companies Act, 1956. The respondent No. 2 refused to vacate the flat and did not accept the payments offered by the company.

3. Applicability of Supreme Court Precedents:
The petitioner-company relied on two Supreme Court decisions: Baldev Krishna Sahi v. Shipping Corporation of India Ltd. and Shrimati Abhilash Vinodhumar Jain v. Cox Kings (India) Ltd. These cases emphasized that Section 630 is designed to provide a summary procedure for retrieving company property wrongfully withheld by an employee. The respondent No. 2 countered that these decisions did not address whether an order for delivery of property could be made before the conclusion of a trial under Section 630(1).

4. Interpretation and Scope of Section 630 of the Companies Act, 1956:
Section 630 comprises two parts: Sub-section (1) deals with wrongful possession and withholding of company property by an officer or employee, punishable with a fine. Sub-section (2) allows the Court to order the delivery or refund of wrongfully withheld property and imposes imprisonment for non-compliance. The Court noted that the provisions are quasi-criminal and aimed at providing speedy relief to companies.

5. Invocation of Inherent Powers under Section 482 of the Cr.PC and Article 227 of the Constitution:
The Court invoked its inherent powers under Section 482 of the Cr.PC and Article 227 of the Constitution to direct the respondent No. 2 to vacate the flat. The Court emphasized that the company's right to retrieve its property was explicit, and the respondent had not provided any valid reason to resist the company's claim. The Court referenced the Supreme Court's directive in Baldev Krishna Sahi's case, where the pendency of a criminal trial did not prevent the Court from ordering the delivery of property.

Conclusion:
The application under Section 482 read with Article 227 of the Constitution was disposed of with the following orders:
- The respondent No. 2 was given one month's time to vacate the flat, failing which the petitioner-company could take legal action.
- The learned Chief Judicial Magistrate, Alipore, was directed to expedite the trial and dispose of it within four months.

This comprehensive analysis ensures that all relevant issues are covered, preserving the legal terminology and significant phrases from the original text.

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