9911796707
TMI Blog1995 (3) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... hheld possession of room No. 30 in New Shorrock Nagar, the property of the company ("the disputed property", for short), after his retirement from the employment of the company. According to the complainant's case, the disputed room was given to the accused on account of the fact of his being in the service of the company at that time. The accused was given the disputed room in a chawl of the company for his use and occupation, on leave and licence basis. One of the conditions of the said leave and licence agreement between the company arid the accused, was that the accused shall not be entitled to occupy the disputed room after termination of his service. Thus, it is alleged by the complainant that the accused was entitled to keep the disputed room, as long as he was in the service of the company and as per the terms and conditions of the licence agreement between the company and the employee-accused, the company is entitled to possession from him on severence of the relationship of master and servant. The accused retired from the service of the company with effect from September 1, 1984, receiving all the retiral benefits from the company. Therefore, the accused was bound to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the accused is a lessee and not a licensee is totally perverse and erroneous. 2.That even in case of the accused being lessee or tenant, prosecution under section 630 of the Companies Act is maintainable. 3.That the provisions of section 630 will override the provisions of the Bombay Rent Act. 4.That the trial court has committed a grave error in acquitting the accused despite clear and consistent evidence that the accused has wrongly withheld the disputed room of the company after his retirement from service and having obtained a beautiful, big bungalow in Punit Park Society at Nadiad. 5.That the accused is liable for punishment for wrongful with holding of the property of the company under section 630 of the Companies Act and that the accused should be directed to deliver or return the disputed room of the company meant for employees of the company, wrongfully withheld by him or, in default, to undergo exemplary imprisonment. While challenging the aforesaid contentions, learned advocate, Mr. A.J. Patel, for the original accused has raised the following contentions: 1.That the provisions of section 630 of the Companies Act are not attracted in the present case as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide a speedy relief to the company when its property is wrongfully withheld by a service-employee. The analysis of the section shows that what is penalised is not only wrongful possession of property and the subsequent wrongful withholding of it but also refusal to the delivery of the property within the time fixed by the court for such delivery. The former is punishable under sub-section (1) and the latter under sub-section (2) of section 630. There is no doubt about the fact that this section does not apply to any person unless he has been officer or employee. It thus applies to a past officer or employee, if the wrongful obtaining, withholding or application of the property was done in his capacity as such officer or employee. Thus, when an employee refuses to vacate the premises of the company on determination of the employment or on his retirement but continues in possession even after his retirement, the employee can be held liable under section 630. The learned Magistrate while passing the impugned acquittal order has held that the complainant has, successfully, proved that the accused was given possession of the disputed room of the company for the limited period of his e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eave and licence between the parties providing a clause coterminous with the termination of service is in reality creating a tenancy in favour of the accused-employee and his continuance in the property as tenant under the Bombay Rent Act cannot be said to be wrongful or illegal. The question requiring adjudication is as to whether the provisions incorporated in section 630 of the Companies Act are in any way repugnant or conflicting with the provision of the Bombay Rent Act, and if yes what is the legal effect ? In order to appreciate this important issue, it may be stated that the following aspects have emerged from the evidence on record unquestionably: 1.That the accused was inducted in the disputed room situated in the chawl of the company meant for employees by the company on account of employment. 2.That the disputed room is situated in the company's premises and it is belonging to the company. There are several such rooms meant and given to its employees on account of their employment with company only. 3.That the agreement between the accused and the complainant company provided termination of possession or occupation of the disputed room co-terminous with the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company is that even if on the interpretation of the agreement of leave and licence the accused is held to be a tenant, there will not be a ban or a bar on the enforcement of the statutes. The right to occupy and possess is limited to the period of service or employment in the agreement. The accused is rightly held to be a "service occupier". The right to occupy premises of the company is co-terminous on termination of the service. Therefore, after severance of the service relationship on account of voluntary retirement or by any mode from the company, the right to occupy it comes to an end. Even under the provisions of the Bombay Rent Act, a service occupier has no right to continue in the tenanted premises after the end of service. In section 13(1)( f ) of the Bombay Rent Act, a specific provision is made for eviction of a service-tenant. It would be necessary at this stage to refer to section 13(1)( f ). It reads under: "13(1). Notwithstanding anything contained in this Act (but subject to the provisions of sections 15 and 15(A), a landlord shall be entitled to recover possession of any premises if the court is satisfied... ( f ) that the premises were let to the tenant f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the employment of the company who was given possession of the premises out of such service relation, the company has an option either to pursue the remedy provided under section 630 of the Companies Act or under section 13(1)( f ) under the Rent Act. There are thus two remedies open to companies. In view of the decision in the case of Govindbhai v. New Shorrock Mills [1984] 1 GLR 156, the remedy for seeking possession of the demised premises in a civil court under section 13(1)( f ) is only filing a suit in a competent city court under section 28 of the Rent Act. If the company decides to file an eviction suit under the Rent Act, the same has to be pursued in a civil court created under section 28. However, the provisions enacted in section 13(1)( f ) or section 28 of the Rent Act do not. constitute a hurdle or hindrance in the way of pursuing remedy under section 630 of the Companies Act. It cannot, therefore, be contended that the company is not entitled to pursue remedy under section 630 on the ground that the accused is held to be a tenant. Even in case of service-tenancy between the accused and the company, the option is with the company either to pursue the remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequence of the employment of the accused, the company is empowered to invoke provisions of section 630 for filing prosecution. The company incorporated under the Companies Act can be a landlord for the purposes of section 13(1)( f ) and is entitled to file a suit for recovery of possession under the Bombay Rent Act. The right of the service-occupier may be as licensee or lessee, is personal and is attributable to the employment with the company or master. Therefore, even in case of death of such an employee, pending the proceedings before the court, his heirs or legal representatives have no " locus standi " and have no right to claim tenancy rights. This proposition is very well explained and established by several decisions. It is also held by many courts that in such a case heirs of deceased employees may be directed to vacate such premises. Entitlement of an employee of a company registered under the Companies Act to occupy the company's premises is coterminous with termination of his service and such right would stand extinguished as soon as the employment ceases and the employee is bound to hand over possession to the company. This view is very well explained and establishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the statute and ask what is its natural meaning, uninfluenced by any considerations derived from the previous state of the law. In order to arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole statute, to consider what was the law before the Act was passed, what was the mischief or effect for which the previous law had not provided, what remedy the Legislature has provided in the present statute and the reasons for the remedy. If the words are capable of one meaning alone, it must be adopted, but if they are susceptible of wider import, the court has to pay regard to the objects and purposes for which the particular piece of legislation had been enacted. The paramount object in statutory interpretation is to discover what the Legislature intended. The intention is primarily to be ascertained from the text of the enactment in question. The text is no1 to be interpreted without reference to its nature or purpose. The statute should be construed not as theorems of Euclid, but with some imagination of the purpose which lie behind them. No doubt, if there is an obvious anomaly in the application of the law, the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commodation with a view to see that employees or their staff members remain contented and have no worry to find out residential accommodation, while in service and in this manner their work will be more satisfactorily done. The companies, therefore, provide good accommodation, quarters, flats or premises to the staff during the period of service. Thus, companies in many cases provide residential accommodation to some of the members of their staff during the period of service for which accommodation the employee has either not to pay anything or to pay house rent which is deducted from the house rent allowance and which accommodation the employee has to vacate when the employee is transferred from one place to another or in case of expiry of service. In several cases, the employees fail to vacate residential accommodation given to them and they contend that they are either tenants or protected licenses. The Legislature has, therefore, designedly treated such an attitude on the part of the employee as an abuse of the benefit or privilege and has made a specific provision for that purpose by providing section 630 of the Companies Act. Section 630 provides conviction and consequential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The interpretation made by the learned magistrate would mean obliterating the material provisions of section 630 from the live statute book apart from doubting the wisdom of Parliament. Such a construction or interpretation is not only erroneous and unreasonable but is patently perverse and manifestly illegal. It is true that under the Rent Act, specified courts (section 28) are given exclusive jurisdiction and they act according to the prescribed procedure. Presumably and probably, such procedure is more liked or preferred. This is in respect of getting peaceful and vacant possession of the tenanted premises from the employee. The underlying purport and purpose of providing speedy and summary procedure in section 630 against service-occupier on termination of service appears to provide residential accommodation to deserving, desiring and requiring and waiting employees of the companies. The said class of landlords like corporate-landlords is given a special remedy as they are not engaged in professional profiteering and real estate business but with a view to see that a similarly situated employee or needy and deserving employee is given residential accommodation for his conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of section 630 of the Companies Act are unaffected and also invocable irrespective of the non-obstante clause contained in section 28 of the Rent Act. The decision of the Punjab and Haryana High Court in Sushila Mittal v. VXL India Ltd. [1992] 74 Comp Cas 836 is a very appropriate decision to mention here. In that case, a criminal complaint under section 630 was filed by the company against the petitioner Sushila who was allotted residential quarters on the basis of her employment with the company. She continued to be in possession of the said quarters even after she ceased to be an employee of the company. A suit was filed by her for a declaration that she was entitled to possession as a tenant. Thus, it was contended by her that she was in possession of the quarters which was rented to her by the company and she was protected by the Rent Act. She had filed a civil suit for perpetual injunction against the company restraining the company from evicting the petitioner by force. A suit which was also filed by the company for possession was decreed against the employee directing her to vacate the quarters and hand over possession. An appeal which was filed by the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d considering the object and purpose of the both the statutes, this court has found that both can exist together. Even in case of repugnancy or conflict between the two laws, the provisions of section 630 will prevail over the provisions of section 13(1)( f ) read with section 28 of the Rent Act being a statute of the State Legislature and an earlier one. In Ashoka Marketing Ltd. v. Punjab National Bank [1992] 74 Comp Cas 482 ; AIR 1991 SC 855, the Constitution Bench of the Supreme Court has held that in case of conflicting laws, the later law should abrogate an earlier contrary law. The provisions of the Public Premises Act to the extent they cover premises falling within the ambit of the Delhi Rent Court Act, override the provisions of the Rent Act, and a person in unauthorised occupation of public premises under section 2( c ) of the Act cannot invoke the protection of the Rent Control Act. It is also held in that case that one of the principles of statutory interpretation which is applied to resolve conflict in laws is contained in the maxim "leges posteriores priores contrarias abrogant" (later laws abrogate earlier contrary laws). Of course, it is true that this princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... later laws abrogate earlier laws, the Public Premises Act must prevail over the Rent Control Act. Thus, the Supreme Court has clearly held that the provisions of the Public Premises Act would override the provisions of the Rent Control Act in relation to premises which fall within the ambit of both the enactments. In the present case, it can very well be seen that the Bombay Rent Act is a special law relating to the relationship between landlords and tenants. Thus, special provisions are designed relating to the general class of landlords and tenants in a special enactment, so, the sphere and horizon under the Bombay Rent Act of its subjects is wider in relation to the relationship of landlords and tenants. In the Public Premises Act provisions are also made with a view to provide speedy and effective remedies for eviction against unauthorised occupants of certain premises. Thus, the circle or sphere of the subject and object both is smaller than the Bombay Rent Act and it is still smaller and wholly circumscribed to the special class of corporate owners or landlords and service occupiers under the provisions of section 630 of the Companies Act, Thus, a special class is carved o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and eviction which cannot be allowed to be rendered nugatory by holding that the accused employee of the company has raised a dispute of tenancy and protection under the Bombay Rent Act. Therefore, this court is unable to accept the contention of the learned advocate for the respondent accused that the provisions contained in section 630 cannot be applied to the disputed premises as it falls within the ambit of the Bombay Rent Act. The scope and ambit of the provisions of section 630 cannot be restricted by reference to the provisions contained in section 28 of the Rent Act. Such an approach adopted by the learned magistrate is not only illogical, unjust but is arbitrary and illegal. Such an approach would strike at the very root and object of the provisions of section 630. This court cannot cut down the provisions of section 630 on the basis of the provisions under the Rent Act. It is also contended that if the view taken by the learned magistrate is not confirmed, then, it is likely that many companies under the Companies Act may abuse the provisions for profiteering motives. Prima facie, such submission may appear to be subtle but it is not sound and sustainable. The provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. This contention cannot be sustained. What is a bona fide dispute is the question of fact depending upon the circumstances of the case. Apart from that, the mere raising of a bona fide dispute would not constitute a hurdle in the criminal prosecution under section 630 and with a view to support this contention and with a view to appreciate the important question, it would be necessary to refer to relevant case-law. The Bombay High Court has consistently held that under the guise of bona fide dispute criminal prosecution under section 630 cannot be sacrificed. It is consistently held that section 630 plainly makes it an offence if an officer or employee of a company, who was permitted to use any property of the company during his employment, wrongfully retains or occupies the same after the termination of his employment. The term officer or employee in section 630 applies not only to existing officers or employees, but also to past officers or employees if such officer or employee either ( a ) wrongfully obtains possession of any property of the company, or ( b ) having obtained such property during the course of his employment, withholds the same after the termination of his empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wani v. Achyut Kashinath Wagh [1982] 52 Comp Cas 1 and also in Govind T. Jagtiani v. Sirajudin S. Kazi [1984] 56 Comp Cas 329. Following the ratio in the aforesaid three decisions, the Bombay High Court thus once again took the same view in Baldev Krishna's case [1988] 63 Comp Cas 1. In Baldev Krishna Sahi v. Shipping Corporation of India Ltd. [1988] 63 Comp Cas 1 ; AIR 1987 SC 2245, the Supreme Court has upheld the view taken by the Bombay High Court that criminal proceedings cannot be stalled or stayed on the specious plea of tenancy under the Rent Act raised by the accused employee. The following observations of the Supreme Court are very important (at page 10 of 63 Comp Cas): "The beneficent provision contained in section 630, no doubt penal, has been purposely enacted by the Legislature with the object of providing a summary procedure for retrieving the property of the company ( a ) where an officer or employee of a company wrongfully obtains possession of property of the company, or ( b ) where having been placed in possession of any such property during the course of his employment, wrongfully withholds possession of it after the termination of his employment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section applies not only to the present officers and employees of the company but to the past officers and employees as well. In Govind T. Jagtiani's case [1984] 56 Comp Cas 329 (Bom.), Ranade J., following the critical analysis of section 630 in the above case, observed that entitlement of an officer to the property of the company and the duration of such right would be coterminous with the terms of employment and the right would stand extinguished with the termination to the employment giving rise to an obligation to hand over the property back to the company. The following observations at page 336 of the said decision are very pertinent (at page 336): "If the property is held back, the retained possession would amount to wrongful withholding of the property of the company. While the existence of the capacity, right and possession would be during employment, the withholding may be even after the termination of the employment and though the possession as it precedes the act of retention or withholding may be rightful in the past affording an opportunity to withhold, the withholding may be wrongful in the present case." It can safely be presumed that while making special sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for inconsistencies between the laws made by Parliament and the laws made by the Legislatures of States. It reads as under: "(1)If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of any existing law with respect to one of the matters enumerated in the concurrent list, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2)Where a law made by the Legislature of a State with respect to one of the matters enumerated in the concurrent list contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has, been reserved for the consideration of the President and has received his assent, prevail in that State : Provided that nothing in this clause shall prevent Parl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy for the purposes of article 254(2). But there can be no repeal by implication unless the inconsistency appears on the face of the two statutes. ( ii )Though there may not be direct conflict between the Union and the State legislation, where it is evident that the Union Parliament intended its legislation to be a complete and exhaustive code relating to the subject, it shall be taken that the Union law has replaced the State legislation relating to the subject. There is a consensus between all the counsel that the Central legislation companies law is in relation to items 43 and 44 provided in List I in the Seventh Schedule to the Constitution and that the subject of the Bombay Rent Act falls in List II (State List) in the Seventh Schedule to the Constitution. Thus, the Companies Act, 1956, is enacted in relation to items in List I, the Union List. In the circumstances, as provided in article 254 of the Constitution, the Central legislation will prevail over the State legislation. It is reinforced by the decision of the apex court in Ashoka Marketing Ltd. v. Punjab National Bank, AIR 1991 SC 855 ; [1992] 74 Comp Cas 482. The contention that the two agreements of leave an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be a lessee and not a licensee in view of the aforesaid observations. A contention is also raised that the prosecution is barred by the period of limitation in view of section 468 of the Code. Section 468 provides a bar to taking cognizance after the lapse of the period of limitation. Section 468(2)( c ) provides a period of limitation of three years if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. The offence under section 630 of the Companies Act is punishable with imprisonment for a term not exceeding three years. The criminal complaint is filed, admittedly, after the period of three years. However, this contention of bar of limitation cannot be accepted as it is without any substance in view of the provisions of section 472 of the Code. Section 472 provides that in the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of time during which the offence continues. The respondent accused voluntarily retired from service with effect from September 1, 1984. Therefore, according to the defence of the accused, the complaint ought to have been filed on or before September 1, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has no hesitation in finding that the impugned order of acquittal recorded by the learned Magistrate is perverse and illegal. Therefore, it is required to be quashed. The prosecution has undoubtedly succeeded in establishing the guilt of the accused for the offence punishable under section 630 of the Companies Act. Therefore, this court has no hesitation in holding the accused guilty of the offence punishable under section 630. While reversing the judgment and acquittal order, the respondent-accused is hereby held guilty of the offence punishable under section 630. Obviously, here, there shall be a statutory pause as mandated by section 235 of the Code of Criminal Procedure. Before passing the sentence order, it is incumbent to hear the accused on the quantum of sentence for the offence punishable under section 630 of the Companies Act and the matter is, therefore, adjourned for the purpose of hearing the accused on the question of sentence. Pursuant to the direction contained above and the provisions of section 235(1) of the other Code, the accused is present today and he is heard on the quantum of sentence. He has stated the following grounds for taking a liberal and lenient vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adiad, belonging to company within 90 days, i.e. , on or before June 10, 1995, failing which or in default, he shall suffer rigorous imprisonment for one month. A parting thought may be necessary. The quantum of fine and the quantum of sentence of imprisonment awarded above is on account of the peculiar facts and special circumstances emerging from the record of the present case together with the fact that the accused is aged about 73. The court is obliged to strike a balance and has to exercise the powers under section 630 so that the grounds personal to the accused at the stage of sentence can be considered and at the same time the mandate of section 630 and the purpose of the special provision for conviction and eviction is also subserved. What should be the just and reasonable balance will have to be decided on the facts of each case. Having regard to the facts and circumstances, the respondent accused Popatbhai Haribhai Patel is held guilty for the offence punishable under section 630 of the Companies Act, and, consequently, he is sentenced to pay a fine of Rs. 500 in default, to undergo SI for 7 days. The accused is also directed to deliver up and hand over vacant and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
