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2019 (12) TMI 397 - SC - Companies LawTemporary injunction in respect of the disputed property - Corporate Debtor - whether an application under Section 630(2) of the 1956 Act was maintainable, in spite of pendency of the civil suit and issue of temporary injunction in respect of the disputed property? - HELD THAT:- The mere issuance of a temporary injunction by the civil court directing maintenance of status quo in respect of the disputed property does not make the dispute bona fide or bar the company’s right to recover the disputed property from the accused employee under Section 630 of the 1956 Act. At best, such an injunction would only bar the company from creating any rights in favour of third parties pending disposal of the civil suit. This is because the cause of action in the civil suit is completely different from the question of whether the employee is wrongfully withholding the company’s property, which is the issue for consideration in the present criminal proceedings - If prima facie the trial court finds that the company has the right to possess the property, the issuance of a temporary injunction by the civil court cannot be used to defeat the company’s lawful right of possession. Whether an order could be made under Section 630(2) prior to final disposal of the complaint under Section 630(1)? - HELD THAT:- Where the Magistrate has found that prima facie the company has a right to possession of the disputed property, he may grant interlocutory relief under Section 630(2) prior to conclusion of the trial under Section 630(1). Courts have time and again observed that Section 630 has to be given a liberal interpretation so as to facilitate expeditious recovery of the company’s property - given that the primary object of Section 630 is to provide a speedy mechanism for restoration of wrongfully withheld property to companies, we find that the provision should be construed as far as possible to facilitate a remedy in favour of the aggrieved company and to prevent the wrongful retention of the property for an unduly long period by the accused - In the present case, the courts below have not committed any error in allowing the appellant company’s application under Section 630(2) during pendency of substantive criminal proceedings. Whether the company is entitled to pray for dispossession of 2nd Respondent from the property? - Whether it is required that 2nd Respondent should have been in possession of the disputed property as a perquisite of his service? - HELD THAT:- Section 630 nowhere requires that the company should have title to the property. The emphasis is on whether the accused has obtained wrongful possession of the property which defeats the company’s lawful right of exclusive possession, even though the property as such may not belong to the company but to a thirdparty landlord or licensor - it is true that in the majority of cases falling under the ambit of Section 630, it has been that property possessed by the company was allotted to an employee for the purposes of residential accommodation, etc. as an incidence of his service, at the first instance itself. In the present case, the 2nd Respondent has been a director of the company since 1988, and claims to be in permissive possession of the disputed property as per the alleged understanding between him and his relative, the deceased Arun Kumar Bajoria, since 1994. However the company acquired the disputed property only in 2008. Be that as it may, the 2nd Respondent has failed to rebut the fact that as of 26.4.2008 it is the company which has acquired the exclusive right to possess the property, and the company handed over possession to him w.e.f 1.5.2008 only in his capacity as the director of the company. Whatever may have been the situation prior to 26.4.2008, on and after that date the company became entitled to recover possession of the disputed property. Inherent powers under Section 482 of the Cr.P.C - HELD THAT:- Section 397(2) of the Cr.P.C provides that the High Court’s powers of revision shall not be exercised in relation to any interlocutory order passed in any appeal, inquiry, trial or other proceeding. Whereas Section 482 of the Cr.P.C provides that nothing in the Cr.P.C will limit the High Court’s inherent powers to prevent abuse of process or to secure the ends of justice. Hence the High Court may exercise its inherent powers under Section 482 to set aside an interlocutory order, notwithstanding the bar under Section 397(2). However it is settled law that this can only be done in exceptional cases. This is, for example, where a criminal proceeding has been initiated illegally, vexatiously or without jurisdiction. In the present case, the order of the Magistrate under Section 630(2) was an interlocutory relief based on a prima facie assessment of facts and did not conclusively decide the ongoing trial under Section 630(1). If the Magistrate finds that the appellant company has been unable to prove that the 2nd Respondent was wrongfully withholding possession of the property, such interlocutory relief shall stand vacated - it is clear that there was no exceptional case of illegality or lack of jurisdiction in the interlocutory order of the lower court calling for the exercise of the inherent powers of the High Court under Section 482, Cr.P.C. Appeal allowed - decided in favor of appellant.
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