9911796707
TMI Blog1993 (4) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... ebruary 28, 1977, and the resignation was accepted with effect from March 1, 1977, and the company called upon him to restore possession of the flat by March 31, 1977. The accused is in possession of the premises up to date, which works out to a period of a little over 16 years. The offence under section 630 of the Companies Act is a continuing offence and, consequently, it is an offence which recurs for the period during which it continues. Where an offence is repeated, in relation to premises, the court will have to define the unit in relation to which the offence can be associated and the penalty awarded would, therefore, have to be in consonance with the number of times the offence is repeated. This is the only fair and logical approach which a court ought to adopt in a situation such as this. It is pointed out that the accused has retained the possession of the premises with a degree of brazenness for as along as 16 years and deprived the company of the use thereof. It would be irrational, therefore, to award a fine of Rs. 1,000 in such a case where the occupation has continued for 16 years and the punishment would, therefore, have to be in consonance with the number of times ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses is to take advantage of the desperation of the poor landlord who, in the midst of these legal skirmishes, genuinely feels that it is better to make the best of the bad bargain by selling out to the party in possession. The accused who, on the one hand, has frustrated the law as far as section 630 of the Companies Act is concerned thereafter contends that he cannot be ordered to restore possession of his own flat. In other words, through such a devious procedure, the accused is permitted to take advantage of his own wrong which is anathema to accepted canons of criminal jurisprudence. Such gymnastics, if permitted, will have the effect of nullifying the rule of law and the courts, with some clear thinking, will, therefore, have to adopt a no-nonsense policy in the event of such mischief. The courts, particularly in the city of Bombay, are groaning under the weight of such frivolous and avoidable litigation which is used as an umbrella for delaying and defeating the application of clear and enforceable legal provisions and if honesty and respect for the written word of a contract is to be meaningful, a-stop will have to be put to this class of unjustified litigation. This case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e questioned. By memorandum dated November 12, 1975, addressed to the accused, the keys of the garage were handed over to him and it was specified that the same was to be used only for the purpose of parking the car and for no other purposes and that on termination of the leave and licence granted in respect of the said flat, the accused was required to hand over vacant possession of the garage also. The accused has signed this memorandum and accepted the conditions mentioned therein. On February 28, 1977, the accused wrote a letter to the company tendering therewith his resignation from the service of the company and further stated in the said letter that as per his service agreement dated May 23, 1963, he was giving six months' notice with effect from March 1, 1977, and that he intended to avail of his privilege leave due to him towards the end of the notice period. On the very same day, the company acknowledged receipt of the accused's said letter of resignation and informed him that his resignation was accepted with effect from March 1, 1977, and that the accused would be paid six months' salary in lieu of the notice given by him. By the said letter, the company requested the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated April 5, 1977, acknowledging receipt of the total amount of Rs. 1,30,572.90 for his provident fund as stated above. As the accused thereafter failed and neglected to hand over possession of the said flat, correspondence was exchanged wherein the accused falsely contended that in respect of the said flat, an understanding was arrived at on February 28, 1977, between the company and the accused that the accused would be allowed to continue to occupy the said flat until six months' notice period expired. By March 31, 1977, the accused ought to have vacated the said flat which was in his possession and handed over peaceful possession of the said flat to the company. The accused ought to have also handed over vacant and peaceful possession of the said garage to the company. As the accused did not hand over possession of the said flat, the company filed a suit against the accused in the Court of Small Causes at Bombay being Suit No. L.C. No. 164/225 of 1977 for a decree and an order directing the accused to quit, vacate and deliver to the company possession of the said flat and for other reliefs. The said suit was contested by the accused and ultimately a decree was passed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that by virtue of the civil proceedings that were pending and the statement that had been made on behalf of the company in those proceedings that the criminal complaint required to be filed, the learned Magistrate by an order dated January 14, 1982, stayed the proceedings. The company filed Criminal Revision Application No. 53 of 1982 in the Court of Sessions, Greater Bombay, which came to be allowed and the stay order was vacated. Another disturbing feature that had come to light from the record of this case is that the wife and daughter of the accused by an assignment dated September 3, 1979, took over the ownership of the flat subject to the tenancy of the petitioner-company and it subsequently transpired that they, in turn, had let out the premises to a limited company by the name of Indofil Chemicals Ltd. and that this fact was withheld while obtaining stay of execution of the decree passed by the Court of Small Causes. The company filed a contempt petition before the Supreme Court, but it is not very clear from the record as to what order the Supreme Court passed in the said contempt proceedings. The criminal case was thereafter taken up for hearing and the company exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and, pursuant to that application being granted, the matter was heard. Shri Vashi, learned counsel appearing on behalf of the appellant, has taken me through the material on record, the bulk of which consists of the orders passed in the various proceedings and copies of the plaints, petitions, etc. As far as the accused is concerned, Shri Vashi pointed out to me that the evidence is clear and conclusive that he was an officer of the company and that he was allotted the flat and garage by the company under a simple licence which document is on record and that the clauses of this document very specifically indicate that no rights whatsoever have devolved on the accused and that he was permitted the use and occupation of the premises during the limited period of time when he was an officer of the company and that he was obliged to restore the possession when asked to do so or when he ceased to be an employee of the company. It is also undisputed that the accused resigned from the services of the company and that the plea of so-called sub-tenancy was nothing but an afterthought and emerged for the first time several months after he had resigned from the service of the company, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t because even in the cross-examination of the two witnesses, nothing of any significance has emerged. The learned Magistrate was impressed by the fact that the company is alleged to have facilitated the take-over of the premises in two other cases and the accused had contended that there was a similar understanding with him. The accused sought to take advantage of the fact that this understanding had been entered into with one Shri Kamat and the learned Magistrate has observed in the judgment that the non-examination of Shri Kamat would result in an adverse inference. This finding is incorrect for the reason that the plea of the defence runs completely contrary to the documents on record and one cannot expect that in the case of a public limited company, there were any such dubious agreements or understandings. If the accused was so confident about there being any substance in this plea, nothing prevented him from establishing it by even summoning Shri Kamat. Merely because an accused raises a far-fetched plea and throws up the name of some officers of the company, to my mind, there is no obligation cast on the prosecution to examine that officer. The material on record conclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 630 of the Companies Act rather comprehensively. Even though the main issue involved in that decision was as to whether the term "officer" or "employee" included past officers or employees, which the Supreme Court answered in the affirmative, the judgment also very clearly lays down that the retention or wrongful withholding of company property of which the employee obtained possession constituted an offence under section 630 of the Companies Act. What needs to be emphasised here is that this provision of the Companies Act does not concern the aspect of title, but it is exclusively confined to the aspect of possession. It is in these circumstances, therefore, that the courts have consistently applied section 630 of the Companies Act even in cases of residential accommodation which admittedly does not belong to the company, but in respect of which the company is in exclusive possession. In other words, the right of user in respect of property, moveable or immovable, which is conferred on an employee by virtue of his status as an officer or employee of the company and which gets extinguished on the cessation of the contract of service, cannot be extended and this provision of law p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce punishable under section 630 of the Companies Act, was committed on and from April 1, 1977, when the accused was required in law to have restored possession to the company. Admittedly, that possession has not been restored and there is no order from any court of competent jurisdiction justifying the wrongful retention or possession by the accused. On the contrary, there is a decree of a civil court passed against the accused and it may be that by virtue of the appeal that is pending, as an interim arrangement, the company has been restrained or has agreed not to execute that decree. This, to my mind, does not alter the position vis-a-vis the present proceeding and to that extent, therefore, the accused would be liable for punishment until such time as the property is restored to the company. The offence having been committed and the offence being a continuing one, the accused is liable to be convicted under section 630 of the Companies Act. The interesting question arises as to whether an order under section 630 of the Companies Act can be passed in this case. In a proceeding of the present type, the relief granted by the court under section 630 to the aggrieved party, namel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accused who would have to shift to some other suitable premises by way of securing such accommodation and completing the process of shifting, etc. Also, in the event of the respondent-accused desiring to carry the matter higher, it is only fair that reasonable time be afforded to him. Shri Vashi, learned counsel appearing on behalf of the appellant, advanced the submission that the offence under section 630 of the Companies Act is a continuing offence and in this regard, he relied on the decision of the Supreme Court in the case of Gokak Patel Volhart Ltd. v. D.G. Hiremath [1991] 71 Comp. Cas. 403. The Supreme Court was dealing with a group of cases from Karnataka and had occasion to interpret in detail another facet of section 630 of the Companies Act and it would be useful to reproduce the observations of the Supreme Court in this regard (at page 415): "The expression 'continuing offence' has not been defined in the Code. The question whether a particular offence is a 'continuing offence' or not must, therefore, necessarily depend upon the language of the statute which creates that offence, the nature of the offence and the purpose intended to be achieved by constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out this aspect of the case to me, was required to concede that in view of the conclusive pronouncement of the Supreme Court in the cases referred to supra, which again dealt with non-return of premises to a limited company wherein prosecutions had been instituted under section 630 of the Companies Act is a valid and binding judgment and that it applies squarely to the present proceeding. In this context, it would be useful to make a reference to the following decisions as also to certain publications and certain text-books as the issue relating to a continuing offence is something which has apparently not been considered in sufficient depth by the courts in our country while interpreting section 630 of the Companies Act: Best v. Butler and Fitzgibbon [1932] 2 KB 108; Verney v. Mark Fletcher and Sons Ltd. [1909] 1 KB 444; King v. Taylor [1908] 2 KB 237; London County Council v. Worley [1894] 2 QB 826; Black's Law Dictionary, fourth edition (revised) (para 21); Black's Law Dictionary, fifth edition (Special Deluxe) (para 7); Halsbury's Laivs of England, volume 45, fourth edition (para 1389) and Salmond and Heuston: Law of Torts, 19th edition, page 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of thought, purpose or action which may be deemed a single impulse." So also a continuous crime means "one consisting of a continuous series of acts, which endures after the period, of consummation, as, offence of carrying concealed weapons. In the case of instantaneous crimes, the statute of limitation begins to run with the consummation, while in the case of continuous crimes it only begins with the cessation of the criminal conduct or act." The corresponding concept of continuity of a civil wrong is to be found in the Law of Torts. Trespass to land in the English law of torts (trespass quare clausum fregit) consists in the act of (1) entering upon land in the possession of the plaintiff, or (2) remaining upon such land, or (3) placing or projecting any object upon it in each case without lawful justification. Trespass by remaining on land, as we read in Salmond and Heuston on the Law of Torts, 19th edition, page 50: "Even a person who has lawfully entered on land in the possession of another commits a trespass if he remains there after his right of entry has ceased. To refuse or omit to leave the plaintiff's land or vehicle is as much a trespass as to enter originally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he law are the entry of a customer into a common inn, of a reversioner to see if waste be done, or of a commoner to see his cattle." To make a person a trespasser ab initio , there must be a wrongful act committed; a mere non-feasance is not enough. It would be useful at this juncture to reproduce the provisions of section 630 of the Companies Act, which reads as under : "Penalty for wrongful withholding of property. (1) If any officer or employee of a company ( a )wrongfully obtains possession of any property of a company, or ( b )having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act; he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to one thousand rupees. (2) The court trying the offence may also order such officer or employee to deliver up or refund, within a time to be fixed by the court, any such property wrongfully obtained or wrongfully withheld or knowingly misapplied, or in default, to suffer imprisonment for a term which may extend to two years." Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly misapplied the same, a court of summary jurisdiction would order such person to be imprisoned. The offence of withholding the money referred to in this section was held to be a continuing offence, presumably because every day that the moneys were wilfully withheld, an offence within the meaning of section 12 was committed. In Verney's case, [1909] 1 KB 444, section 10(1) of the Factory and Workshop Act, 1901, inter alia , provided that every fly-wheel directly connected with steam, water or other mechanical power must be securely fenced. Its sub-section (2) provided that a factory in which there was contravention of the section would be deemed not to be kept in conformity with the Act. Section 135 provided penalty for an occupier of a factory or workshop if he failed to keep the factory or workshop in conformity with the Act. Section 146 provided that information for the offence under section 135 shall be laid within three months after the date at which the offence came to the knowledge of the inspector for the district within which the offence was charged to have been committed. The contention was that in May, 1905 and again in March, 1908, the fly-wheel was kept unfenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , according to which, notwithstanding anything contained in the provisions of Chapter XXXVI of the Code of Criminal Procedure, any court may take cognizance of an offence after the expiration of a period of limitation if, inter alia , it is satisfied that it is necessary to do so in the interest of justice. The expression 'continuing offence' has not been defined in the Code. The question whether a particular offence is a 'continuing offence' or not must, therefore, necessarily depend upon the language of the statute which creates that offence, the nature of the offence and the purpose intended to be achieved by constituting the particular act as an offence. Applying the law enunciated above to the provisions of section 630 of the Companies Act, we are of the view that the offence under this section is not such as can be said to have been consummated once for all. Wrongful withholding, or wrongfully obtaining possession and. wrongful application of the company's property, that is, for purposes other than those expressed or directed in the articles of the company and authorised by the Companies Act, cannot be said to be terminated by a single act or fact but would subsist for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribing punishment that would be in consonance with the period of time during which the offence has recurred. Confining the consideration to the facts of the present case where the property consists of a residential flat on which the company is required to pay rent or compensation from month to month, the wrongful withholding of the premises by the accused from month to month will constitute a recurrence of the offence from month to month. To my mind, the legal injury that has been done to the company runs parallel to the wrongful gain or wrongful benefit derived by the accused from month to month and for this purpose, the only unit that can be correctly applied in such cases would be the period of one month since the tenancy runs from month to month. There is no dispute in this case that the company is required to pay to the landlord the rent/compensation from month to month and, therefore, the wrongful loss has occurred to the company every month and the corresponding wrongful gain has accrued to the accused from month to month. In this view of the matter, to my mind, the accused would be liable to be penalised from month to month during the entire period during which the offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Small Causes the company puts any of its other officers in possession of the premises, they shall obtain an unconditional undertaking which shall equally bind the company and the concerned officer and his family and which shall be filed in the eviction proceedings before the Court of Small Causes, and such possession shall be subject to the final orders in those proceedings. To my mind, it would be quite impermissible for a court to allow the present situation to be used as an automatic termination or cessation of the company's tenancy. If the argument canvassed by learned counsel on behalf of the respondent-accused were to be accepted, it would lead to the absurd situation that the offending party, namely, the accused, gets the full advantage of his own wrong merely by purchasing the premises and thereafter contending that the company is automatically ousted. It would be essential as stated earlier to consider a situation whereby the ownership of the premises had changed with some other officer in occupation and it is precisely that situation that is required to be contemplated. In this view of the matter, it would be perfectly legitimate for this court to pass an order unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f proceedings, etc., should be permitted by the trial courts because the history of those proceedings indicates that each of such stages is responsible for further litigation and years of delay. The law is well-settled now with regard to the position that the pendency of other civil proceedings is no bar to the decision of an application under section 630 of the Companies Act which fact should be taken cognizance of in such situations. ( d )That the appeal courts, i.e. , the Court of Sessions, in the first instance, must judiciously scrutinise and vigorously examine the revision applications and appeals before granting stay orders. ( e )That applications for discharge on frivolous and untenable pleas are required to be speedily and effectively disposed of and are not to be used as handles for protracting the litigation. The appeal is accordingly allowed. The judgment and order of the trial court are set aside. Respondent No. 1-accused is convicted under section 630 of the Companies Act and is ordered to pay a fine in the sum of Rs. 1,000 per month for each month during which the offence has recurred starting from April 1, 1977, until the date of restoration of possession of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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