2003 (8) TMI 594 - HC - Companies Law

Summary

Issues Involved:

1. Maintainability of the complaint filed by an employee on behalf of the company.
2. Protection of possession under State Government notifications.
3. Petitioner's claim of tenancy and jurisdiction of the Criminal Court.
4. Discretionary relief under Section 630(2) of the Companies Act.
5. Strict construction of penal provisions under Section 630 of the Companies Act.
6. Alleged procedural irregularity during the trial.

Detailed Analysis:

1. Maintainability of the Complaint:

The petitioner contended that the complaint was not maintainable as it was filed by an employee and not in the name of the company. However, it was established that the complaint was filed by the security officer, R.G. Ghag, under a power of attorney granted by the company's Board of Directors, authorizing him to act on behalf of the company. The court held that the complaint was effectively for and on behalf of the company, thus maintaining its validity. The decision in Atul Mathur v. Atul Kalra was cited, affirming that a duly authorized individual could file such a complaint without causing a failure of justice.

2. Protection of Possession Under State Government Notifications:

The petitioner claimed protection under notifications issued by the State Government, which purportedly provided that occupants of tenements in textile mills should not be evicted without alternative accommodation. The court noted that these notifications were not in force when the petitioner committed the offence under Section 630 of the Companies Act in December 1988. Additionally, the court emphasized that the Companies Act, a central legislation, prevails over state notifications, and the notifications cannot have retrospective effect to legalize wrongful possession. The court concluded that the petitioner, having resigned from the company, had no right to continue occupying the premises.

3. Petitioner's Claim of Tenancy and Jurisdiction of the Criminal Court:

The petitioner argued that he was a tenant and that the issue should be decided by the Court of Small Causes, not the Criminal Court. The court rejected this contention, stating that the petitioner's occupation was as a service occupier, not a tenant, and that Section 630 of the Companies Act specifically addresses wrongful withholding of company property. The court referenced previous judgments, such as Dr. Suresh Venkatrao Nerlekar v. Sharanghadar Pandurang Nadkarni, which supported the view that criminal proceedings under Section 630 could proceed independently of civil tenancy claims.

4. Discretionary Relief Under Section 630(2) of the Companies Act:

The petitioner argued that the relief under Section 630(2) was discretionary and that the courts erred in ordering him to vacate the premises. The court clarified that while the word "may" in the statute indicates discretion, it does not preclude the court from ordering possession recovery in appropriate cases. Given the wrongful withholding of the premises, the court found that the lower courts had correctly exercised their discretion in favor of the company.

5. Strict Construction of Penal Provisions:

The petitioner asserted that the penal nature of Section 630 required strict construction. The court dismissed this argument, noting that the provision aims to recover property wrongfully withheld by an employee. The court referred to the decision in Lalita Jalan v. Bombay Gas Co. Ltd., which highlighted that penal provisions could be interpreted to fulfill their protective purpose.

6. Alleged Procedural Irregularity During the Trial:

The petitioner claimed that the trial was vitiated because the Magistrate improperly asked him to admit certain documents. The court acknowledged a possible procedural irregularity but emphasized that the petitioner was not forced to admit the documents and had not demonstrated any resulting prejudice. Therefore, this contention was deemed unsubstantial.

Conclusion:

The court found no merit in the petitioner's challenges to the impugned orders. Consequently, the petition was dismissed, and the rule was discharged. The court granted the petitioner eight weeks to vacate the premises, considering his intention to appeal to the Supreme Court.