1980 (9) TMI 200 - HC - Companies Law

Summary

Issues Involved:
1. Wrongful withholding of company property by a former employee.
2. Applicability of Section 630 of the Companies Act, 1956, to past employees.
3. Interpretation of Section 630 of the Companies Act, 1956.
4. Jurisdiction and powers of the High Court under Section 482 of the Cr. PC.
5. Procedural aspects and delays in the trial.

Detailed Analysis:

1. Wrongful Withholding of Company Property by a Former Employee:
The petitioner, a former manager of the company's Bombay branch, was allowed to use a company flat during his employment. Upon his retirement on June 30, 1978, he was required to vacate the premises but refused to do so. Despite the company's humanitarian concession to allow him additional time to find alternative accommodation, the petitioner persistently declined to vacate the premises. Consequently, the company filed a complaint under Section 630 of the Companies Act, 1956, alleging wrongful withholding of the property.

2. Applicability of Section 630 of the Companies Act, 1956, to Past Employees:
The petitioner argued that Section 630 only applies to current employees and not to past employees. However, the court interpreted that the section covers both current and past employees. The court emphasized that the phrase "any such property" in clause (b) of Section 630 refers to the property of the company and not to the manner of obtaining possession. Therefore, even if the possession was initially lawful, wrongful withholding after the termination of employment still falls under the purview of Section 630.

3. Interpretation of Section 630 of the Companies Act, 1956:
The court dissected the language of Section 630, highlighting that clause (a) deals with wrongful obtaining of possession, while clause (b) addresses wrongful withholding or misapplication of the property. The court rejected the petitioner's interpretation that clause (b) should be read in conjunction with clause (a) to imply that only wrongfully obtained possession could be wrongfully withheld. Instead, the court clarified that clause (b) applies independently and can cover situations where possession was initially lawful but later wrongfully withheld.

4. Jurisdiction and Powers of the High Court under Section 482 of the Cr. PC:
The petitioner sought to invoke the inherent powers of the High Court under Section 482 of the Cr. PC to quash the proceedings. The court noted that inherent powers should be exercised sparingly and only in rare cases to prevent abuse of process or to secure the ends of justice. The court found that the facts of the case did not justify invoking these powers, as the complaint made out a prima facie case under Section 630, and the trial should proceed on its merits.

5. Procedural Aspects and Delays in the Trial:
The court criticized the petitioner for delaying the trial, noting that the application for discharge was filed 18 months after the complaint, and even then, it was based on a misconceived notion of law. The court emphasized that the trial should be expedited to avoid further delays and ensure justice.

Conclusion:
The court concluded that the petitioner's case was squarely covered by Section 630 of the Companies Act, 1956, and there were sufficient grounds to proceed with the trial. The rule was discharged, and the trial court was directed to expedite the hearing. An oral motion for leave to appeal to the Supreme Court was rejected.