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TMI Blog1997 (4) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... n June 30, 1994 and on that very day, the petitioner-company accepted his resignation. The respondent No. 2 by his letter dated February 4, 1994 applied for cancellation of his signatures from all bank accounts, power of attorney, trusteeship of provident fund and pension fund of the company. By a letter dated June 16, 1994, the secretary to the petitioner-company recorded the modalities of the handing over of the company's properties by the respondent No. 2 and informed the respondent No. 2 that he was to vacate the flat as well as the company car by June 30, 1994. He was also informed that his salary for May and June, 1994 along with deferred salary refund as applicable along with perquisites as per his entitlement would be paid to him simultaneously with the handing over of the possession of the company flat and car on June 30, 1994. The respondent No. 2 by his letter dated June 17, 1994 informed the petitioner-company that he had made alternative arrangement for his residential accommodation which would be ready by the end of December 1994 and requested the company for allowing him to continue to use the flat till December31, 1994 undertaking to hand over possession of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be in possession of the flat concerned was coterminous with the terms of his employment under the petitioner-company and such right would have automatically been extinguished with his resignation, on the expiry of June 1994. But Since the respondent No. 2 made a written request to the company for permitting him to continue to be in possession of the fiat till the end of December 1994 on the representation that the residential accommodation which he himself arranged for would by that time be ready and available to him and as the petitioner-company had only acceded to his request till the end of July, 1996 on humanitarian grounds and as a special case, the respondent No. 2's right was extended till the end of July 1994 and finally stood extinguished on the expiry of July 1994 giving rise to an obligation to handover the flat back to the company. The retention of the flat by the respondent No. 2 with effect from first of August, 1994 cannot but be 'wrongful withholding' of the property of the company within the meaning of Section 630(2) of the Act. The fact that the company flat in question is being wrongfully withheld by the respondent No. 2 is quite explicit on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial before the lower Court. His plea was taken under Section 251 of the Cr.PC and he pleaded not guilty and claimed to be tried. Had he admitted the accusation, the learned magistrate would have relied on such admission and convicted him then and there, but the magistrate decided to proceed with the trial. As such, the respondent No. 2 cannot be deemed to have made any admission with regard to the accusation. In his written objection directed against the separate petition that was filed on behalf of the complainant company under Section 630(2), the respondent No. 2 did not also admit any of the allegations made in that petition. The alleged letters of the respondent No. 2 on which the petitioner-company seeks to rely cannot be relied upon and treated as legal evidence at this stage. The said documents will be treated as evidence only after they are formally proved and brought into legal evidence. That stage will arise only after the complainant produces his witnesses under Section 254 of the Cr.PC before the Court below and the respondent No. 2 gets his opportunity to cross-examine them and, if necessary, to adduce rebutting evidence. The respondent No. 2 cannot also be called up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and legal representatives and also any one claiming through them. The question that conforonts us in the present case, Bameh, the question whether the direction to deliver property can be given under Sectiorr 630 dinning the pendency of the criminal prosecution under Sub-section (1) did not actually arise for decision in either of the said two Supreme Court cases, nor was it decided. As such, the said two decisions are not binding on this Court as laying down the law within the meaning of Article 141 of the Constitution of India and will be of no avail to the petitioner-company. 11. In support of his contention on the question of non-applicability of the above two decisions. Mr. Basu cited the decisions reported in BR Sharma v. Union Territory of Pondicherry ; B.S. Rai v. Union Terrirtory of Pondicherry ; State of Orissa v. Sudhansu Shekhar Mishra and Union of India v. Dhanwanti Devi. 12. Section 630 of the Act runs in the following words : Penalty for wrongful withholding of property (1) If any officer employee of a company - a) wrongfully obtaines possession of any property of a company of a company ; or (b) having any su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d resignation was accepted by the petitioner-company on February 3, 1994 and it was made known to the respondent No. 2 that he would have to vacate the flat on the expiry of June 30, 1994. On June 17, 1994, the respondent No. 2 by addressing a letter to the company expressed his difficulty to vacate the flat on the scheduled date and made a specific request to the company for permitting him to continue to be in possession of the flat till the end of December 1994 giving the petitioner-company to understand that he had already made arrangements for his alternative residential accommodation which was expected to be ready and made available to him by the end of December 1994. In case his alternative residential accommodation was ready earlier than December 1994 the respondent No. 2 did make it clear that he would intimate to the company the date of his handing over of the possession of the flat. The company purely on humanitarian grounds and as a special case by its letter dated June 22, 1994 acceded to the respondent No. 2's request till the end of July 1994. The respondent No. 2, however, by addressing a letter dated July 21, 1994 reiterated his request to continue to hold the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des. At the same time, the Supreme Court directed the learned magistrate to proceed with the trial of the criminal case that was launched against the petitioner at the instance of the company under Section 630 and dispose it of as expeditiously as possible and in any event, not later than four months from the date of the order. 16. Mr Milra, appearing for the petitioner, accordingly placed his reliance on this decision of the Supreme Court and contended that this Court, in the facts and circumstances of this case, would be competent to pass an order directing the respondent No. 2 to vacate the flat concerned, within certain time to be fixed by this Court and that the pendency of the criminal trial against the respondent No. 2 cannot stand in the way of this Court giving a direction under Section 630(2) upon the respondent No. 2 to vacate the flat. 17. It would be now worthwhile to note certain observations of the Supreme Court in Baldev Krishna Sahi's case (supra). At paragraph 3, it observed: Any of the business organisations, both in the public as well as the private sector, are required to provide residential accommodation to their officers and em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f his employment to continue in possession of the property belonging to the company, under authority of the company and the duration of such right coterminous with his/her employment. 18.2 It further held at para 14 : The capacity, right to possession and the duration of occupation are all features which i 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 handover the allotted properly back to the company. Where the property of the company is held back whether by the employee, past employee or anyone claiming under them, the retained possession would amount to wrongful withholding of the property of the company, actionable under Section 630 of the Act. 18.3 It again observed : Once the right of the employee or the officer to retain the possession of the property, either on account of termination of services, retirement, resignation or death, gets extinguished, they (persons in occupation) are under an obligation to return the property back to the company and on their failure to do so, they render themselves liable to be dealt w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the company after the right to be in occupation has ceased for one reason or the other, it would not only create difficulties for the company, which shall not be able to allot that property to its other employees, but would also cause hardship for the employee awaiting allotment and defeat the intention of the legislature. The Courts are therefore obliged to place a broader, liberal and purposeful construction on the provisions of Section 630 of the Act in furtherance of the object and purpose of the legislation to construe it in a wider sense to effectuate the intendment of the provision. 18.9 It is very much significant to note the following observations of the Supreme Court at paragraph 18 : The Court, when, approached by the employer for taking action under Section 630 of the Act, can examine the basis on which the petition/ complaint is filed and if it is found that the company's right to retrieve its property is quite explicit and the stand of the employee, or any one claiming through him, to continue in possession is baseless it shall proceed to act under Section 630 of the Act and pass appropriate orders. Only an independent valid right not only to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at after hearing an argument on a question which arises in the case or is put in issue may constitute a precedent, no matter for what reason.... 20. On a careful analysis of the two Supreme Court judgments in the cases of Baldev Krishna Sahi (supra) and Abhilash Vinodkitmar Jain (supra), cited on behalf of the petitioner in the light of the tests laid down for ascertainment the ratio of a judgment in the above four decisions of the Supreme Court cited on behalf of the respondent No. 2, the principles and ratio which would, in essence, be discernible be summed up as : 20.1 The provisions of Section 630 are not penal in the sense as understood under the penal law and are quasi-criminal. The 'fine' under Subsection (1) of Section 630 is to be understood in the nature of 'compensation' for wrongful withholding of the property of a company. The beneficent provisions contained in the section have been purposely enacted by the Legislature with the object of providing a summary procedure for retrieving the property of a company. The whole object is the preservation of the property of a company and to provide speedy remedy to a company when its property is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t are matters of record. Now, what, according to the respondent No. 2, were matters of record is not clear. Moreover, there is no whisper within the four comers of the written objection so far as the averments in paragraph 2A of the petition are concerned. 22. The respondent No. 2 in his written objection did never specifically disown the letters what were alleged to have been written by him and referred to in the petition. The respondent No. 2 has also not come forward with any plea of independent right or capacity unconnected with his erstwhile status as an officer of the petitioner-company to continue in occupation and possession fo the flat concerned. 23. The averments made in the application under Section 482 of the Cr.PC and Article 227 of the Constitution filed before this Court are supported by affidavit, and it is pertinent ot note that no counter-affidavit had been filed on behalf of the respondent No. 2. 24. The matters on record would reveal that the respondent No. 2 wanted to be permitted by the petitioner-company to continue to possess the concerned flat at most till the end of December 1994 but since then, the fact remains that more than tw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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