9911796707
TMI Blog1995 (9) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... belonged to Chandra Textiles, a joint stock company, registered under the Companies Act. The agreement dated October 3, 1994, has been entered into between the complainant company on the one hand and Chandra Textiles Limited on the other. By virtue of the agreement, the property "Pioneer House" has become the property of Chandra Textiles. The petitioner herein is one of the directors in Chandra Textiles and as such he continues to reside in Pioneer House. The petitioner, while he was the managing director of the respondent-company, was given certain perquisites and amenities to be enjoyed by him. Item No. 4 in the schedule attached to the complaint is a Hindusthan Contessa car, bearing registration No. PY-018-7155, which was purchased by the respondent-company and given to the petitioner for his use as managing director. Item No. 5 is a diesel generator set, which was erected in Pioneer House, which was the property of the respondent-company. Items Nos. 4 and 5 still continue to be in the possession of the petitioner, notwithstanding the fact that he ceased to be the managing director of the respondent-company. Items Nos. 2 and 3 in the schedule are computers, whereas item No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles and continued wrongful retention of these articles by the petitioner has resulted in a great loss to the respondent-company. The respondent has also denied in paragraph 16 that the matter is seized by the arbitrator, and K. Rajagopal is an arbitrator, and also denied the averment regarding suppression of facts and contended that the complaint has been taken on file by the court on February 27, 1995, and Mr. K. Rajagopal's decision is said to have been made on March 7, 1995, which is subsequent to the complaint. Repelling these averments, the petitioner contended that the complaint smacks of mala fides and it is an abuse of the process of the court and of law and it has been filed merely to enable the respondent to harass, and coerce the petitioner and contended that this is a matter of civil wrong at best and in view of the memorandum of understanding dated July 15, 1994, the petitioner has rights and it is a matter to be adjudicated in accordance with law in arbitration proceedings. Learned counsel for the petitioner invited my attention to paragraph 17 of the memorandum dated July 15, 1994. The point for consideration is whether the complaint of the respondent here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a case for prosecution in a criminal court. Learned counsel for the petitioner cited a decision of the Supreme Court in State of Haryana v. Bhajan Lal, AIR 1992 SC 604, at page 628, paragraph 108, wherein the Supreme Court has given a list of myriad kinds of cases, though not exhaustive, wherein such power of quashing should be exercised. Learned counsel relied on one such illustration, namely, where the complaint is so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused, in such an event the complaint should be quashed. Learned counsel for the respondent contended that this court cannot take into consideration the documents produced by the petitioner at this stage without legal proof and relied on a decision of the Delhi High Court in Delhi Municipality v. Ram Kishan Rohtagi, AIR 1983 SC 67, wherein the Supreme Court has held that proceedings against an accused at the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. The test is that taking the allegations and the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme of section 630 of the Companies Act contemplates right to possession and the duration of occupation are all features, which are integrally blended with the employment and the capacity and the corresponding rights are extinguished with the cessation of employment and an obligation arises to hand over the allotted property back to the company. Where the property of the company is held back whether by the employees, past employee or any one claiming under them, the retained possession would amount to wrongful withholding of the property of the company actionable under section 630 of the Act. Section 630 of the Act is a penal provision and, therefore, must be subject to strict construction and in essence, sub-section (1) of section 630 makes it an offence where any officer or employee of a company wrongfully withholds possession of such property of the company. It, inter alia , regulates the affairs of the company including the control of the management and protection of the property of the company. It provides speedy relief to the company, where its property is wrongfully obtained or wrongfully withheld by an employee or an officer. In Smt. Abhilash Vinodkumar Jain v. Cox an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments rendered by this court and, relying upon the law laid down in Baldev Krishna Sahi v. Shipping Corporation of India Ltd., AIR 1987 SC 2245; [1988] 63 Comp. Cas. 1 and Amrit Lal Chum's case, AIR 1988 SC 733 ; [1988] 63 Comp. Cas. 839 held that the offence under section 630 of the Act is not such as can be said to have been consummated once for all and that the offence continues until the officer or employee delivers up or refunds the property of the company when ordered by the court to do so within a time fixed by the court and in default to suffer the term of imprisonment as may be imposed by the court. It was held that 'officer or employee' under section 630 of the Act, includes both present and past officers and employees." It has further held that though section 630 of the Act falls in Part XIII of the Companies Act and provides for penal consequences for wrongful withholding of the property of the company, the provisions, strictly speaking, are not penal in the sense as understood under the penal law. The provisions are quasi-criminal. They have been enacted with the main object of providing speedy relief to a company when its property is wrongfully obtained or ..... 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