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1997 Supreme(Cal) 4

HIGH COURT OF CALCUTTA
Debyendu Bhusan Dutta, J.
Metal Box India
Vs
State of W. B. & Anr.
Decided on : January 7, 1997

Advocates Appeared:
Aloke Kr. Mitra for the petitioner;
Sekhar Kr. Basu for the opposite party No.2.

The provisions of section 630 of the Companies Act are not penal in the strict sense and are intended to provide a summary procedure for retrieving the property of a company.

Headnote:

COMPANIES ACT - SECTION 630 - WRONGFUL WITHHOLDING OF PROPERTY - ORDER FOR DELIVERY OF PROPERTY - JURISDICTION OF COURT - INHERENT POWER OF COURT UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE.

Fact of the Case:

The petitioner company, a flat owner, filed a complaint against the respondent, a former employee, for wrongfully withholding a company flat after the termination of his employment. The respondent had initially requested and was granted an extension to vacate the flat, but later refused to hand over possession. The petitioner company filed an application under section 630(2) of the Companies Act seeking an order for delivery of the flat, which was rejected by the Magistrate. The petitioner company then approached the High Court under section 482 of the Code of Criminal Procedure and Article 227 of the Constitution.

Finding of the Court:

The High Court held that the Magistrate had the jurisdiction to order the delivery of the flat under section 630(2) of the Companies Act, even though the criminal trial against the respondent was still pending. The court relied on the Supreme Court decisions in Baldev Krishna Sahi v. Shipping Corporation of India Ltd. and Smt. Abhilash Vinodkumar Jain v. State of Maharashtra, which held that the provisions of section 630 are not penal in the strict sense and are intended to provide a summary procedure for retrieving the property of a company. The court also noted that the respondent had not come forward with any independent right or capacity to continue in occupation of the flat.

Issues: 1. Whether the Magistrate had the jurisdiction to order the delivery of the flat under section 630(2) of the Companies Act during the pendency of the criminal trial against the respondent? 2. Whether the petitioner company was entitled to an order for delivery of the flat under section 630(2) of the Companies Act.

Ratio Decidendi: 1. The court held that the Magistrate had the jurisdiction to order the delivery of the flat under section 630(2) of the Companies Act during the pendency of the criminal trial against the respondent. The court relied on the Supreme Court decisions in Baldev Krishna Sahi v. Shipping Corporation of India Ltd. and Smt. Abhilash Vinodkumar Jain v. State of Maharashtra, which held that the provisions of section 630 are not penal in the strict sense and are intended to provide a summary procedure for retrieving the property of a company. 2. The court held that the petitioner company was entitled to an order for delivery of the flat under section 630(2) of the Companies Act. The court noted that the respondent had not come forward with any independent right or capacity to continue in occupation of the flat.

Final Decision: The High Court allowed the petition and directed the respondent to vacate the flat within one month. The court also directed the Magistrate to dispose of the criminal case within four months.

JUDGMENT

Dibyendu Bhusan Dutta, J. : The present application under s. 482 of the Code of Criminal Procedure and Art. 227 of Constitution of India is directed against an order dated 31.7.96 passed by the learned Chief Judicial Magistrate, Alipore, in complaint case No. C 1064 of 1996 rejecting the petitioner company's application under s. 630(2) of the Companies Act.

2. The petitioner company acquired ownership of flat No. 168, Minto Park Syndicate, in the premises No. 13, Debendra Lal Khan Road, Calcutta. The respondent No. 2 joined the company as General Finance Manger sometime in July, 1991. He was allotted the aforesaid flat for use and occupation of his own and his family during the course of his employment in the petitioner company. The respondent No.2 by addressing a letter dated 3.2.94 to the company submitted his resignation expressing his desire to be released from the services of the company on the closure of business hours on 30th June, 1994 and on that very day, the petitioner company accepted his resignation. The respondent No.2 by his letter dated 4.2.94 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 16.6.94, 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 30th June, 1994. He was also informed that the 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 30.6.94. The respondent No. 2 by his letter dated 17.6.94 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 31st December, 1994 undertaking to hand over possession of the flat even earlier in case his alternative accommodation gets ready. The petitioner company strictly on humanitarian grounds and as a very special case permitted the respondent No.2 to use the flat till 31st July, 1994. It was made clear by the petitioner company by its letter dated 22.6.94 that its representatives would go to take possession of the flat on the 1st day of August, 1994. On 6.7.94, the respondent No.2 returned the company car. But on 21.7.94, the respondent No.2 repeated his request for extension of time to retain the flat till 31st December, 1994. The company representatives went to take possession of the flat from the respondent No.2 and gave him two cheques of the sum of Rs. 51,370/- and 63,562/-. But the respondent No.2 refused to accept the payments and hand over possession of the flat. The petitioner company accordingly launched a prosecution by filing a complaint against the respondent No.2 on 20.9.94 under s. 630 of the Companies Act alleging that the respondent No.2 had wrongfully withheld the flat and praying for issue of process under s. 630(1) against the respondent No.2 and also for a direction under s. 630(2) upon the respondent No.2 to hand over vacant and peaceful possession of the flat.

3. The learned Chief Judicial Magistrate summoned the respondent No.2 who appeared on 22.2.95 and pleaded not guilty.

4. Thereafter the petitioner company filed a separate application under s. 630(2) of the Act praying for an order directing the accused to deliver possession of the flat in question pending disposal of the case.

5. The respondent No. 2 filed a written objection against the said application alleging that the application was not maintainable as the trial had not yet concluded.

6. The learned Magistrate rejected the said application under s. 630(2) holding inter alia that unlike the Apex Court or the High Court and unlike the



































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