TMI Blog2019 (12) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. - Criminal Appeal No. 1571 of 2019 [ Arising out of SLP ( Crl. ) No. 9527 of 2017 ] - - - Dated:- 17-10-2019 - Mohan M. Shantanagoudar And Ajay Rastogi, JJ. FOR THE PETITIONER : LEGAL OPTIONS [P-1] FOR THE RESPONDENT : SHARMILA UPADHYAY[R-2], PLR CHAMBERS AND CO.[R-1] JUDGMENT MOHAN M. SHANTANAGOUDAR, J. 1. Leave granted. 2. This appeal by special leave arises out of judgement dated 24.8.2017 of the Calcutta High Court allowing the 2n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows: 630. Penalty for wrongful withholding of property. (1) If any officer or employee of a company- (a) wrongfully obtains possession of any property of a company; or (b) having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act; he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to one thousand rupees. (2) The Court trying the offence may also order such officer or employee to deliver up or refund, within a time to be fixed by the Court, any such property wrongfully obtained or wrongfully withheld or knowingly misapplied, or in default, to suffer imprisonment for a term which may extend to two years. Contrary to the appellant s allegations, the 2nd Respondent contends that he had a mutual understanding/oral agreement with the deceased Mr. Arun Kumar Bajoria, who was his cousin brother, under which the deceased had paid consideration of ₹ 9,10,170/- for construction of the disputed property. It was agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y who have wrongfully retained possession of the company s property subsequent to cessation of their employment. Therefore the Magistrate, taking into account the fact that the accused/2nd Respondent had not denied that the disputed property belonged to the appellant company and that he was given possession of the flat by the company for his accommodation, directed the 2nd Respondent to vacate and hand over possession of the disputed property to the appellant company. The learned Sessions Judge at Alipore by order dated 21.12.2012 dismissed the 2nd Respondent s revisional application under Section 397 read with Section 399 of the Criminal Procedure Code, 1973 ( Cr.P.C ), and affirmed the Magistrate s order, noting that since the appellant company was not a party to the civil Suit No. 2126/2009 between the 2nd Respondent and the vendors, the pendency of the suit would not bar criminal proceedings against him. However the High Court in the impugned judgement allowed the 2nd Respondent s petition under Section 482, Cr.P.C and set aside the findings of the Magistrate and the Sessions Judge on the ground that there was no evidence to prove that the disputed property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company has paid rent of ₹ 91,01,700/- in respect of the disputed property from 1.1.2009 to 31.12.2017; as well as TDS (Tax deducted at source) certificates showing that the appellant company had deducted tax on the rent income while making payments to the vendors. He further argued that since the appellant company was not a party to the civil suit between the 2nd Respondent and the vendors, the order in the civil suit would not be binding on the appellant company; and that it was not required that the officer/employee accused under Section 630 should be in possession of the disputed property as a perquisite of his service. Therefore the High Court had erred in exercising its powers under Section 482 of the Cr.P.C. 6. Per contra, learned senior counsel for the respondent Mr. S.B. Upadhyay contended that the complaint is nothing but a scheme of the appellant company, which is composed of the 2nd Respondent s own relatives, to oust him from possession of the disputed property. The company is owned and controlled by the vendors themselves, and the criminal complaint is nothing but an alternate mechanism to oust the 2nd Respondent from the disputed property si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reality behind the entity if it is found that the device of incorporation has been used to perpetrate some illegality or fraud (See Delhi Development Authority v. Skipper Construction Company (P) Ltd., (1996) 4 SCC 622). However no such illegality or fraud has been pleaded and proved in the present case. In any case, it has been settled by this Court in Damodar Das Jain v. Krishna Charan Chakraborti , (1989) 4 SCC 531, and Atul Mathur (supra) that the pendency of a civil suit in respect of a property, would not bar a complaint under Section 630 with respect to the same property, even if it is between the same parties, if there is no dispute or no bona fide dispute regarding the company s right over the property. The mere fact that the accused employee has refuted the company s claim to possession would not make the dispute bona fide. In the present case, we find that there is no bona fide dispute in as much as the 2nd Respondent s entire claim to the disputed property is based on an oral agreement/ understanding , as to the terms of which no documentary evidence has been produced. Whereas the appellant company has at least been put into symbolic possession of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn in Atul Mathur (supra) would also extend to cases under Section 630 where a civil court has, in spite of there being no bona fide dispute, issued an order of temporary injunction in respect of the disputed property. In such a case, the pendency of the civil suit and any interim reliefs granted therein would not bar criminal prosecution under Section 630. 9. Similarly, with respect to the second issue, we are of the considered opinion 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. The following observations of this Court in Baldev Krishna Sahi (supra) are useful in this regard: 7. 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 comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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. There is no stipulation in Section 630(2) that an order for delivery of wrongfully withheld property must be made only after the accused has been convicted under Section 630(1). Rather, it says the Court trying the offence may direct the delivery of such property, which indicates that such an order may be passed at any stage by the trial court. This Court in Baldev Krishna Sahi (supra) upon finding that a case under Section 630(1) was prima facie made out directed the petitioner therein to vacate the disputed premises during pendency of the substantive complaint under Section 630(1). Therefore 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. 10. With respect to the third and fourth issues, we find that the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector 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. We find no substance in the 2nd Respondent s argument that he was misled into delivering the title documents of the disputed property by his sister-in-law on the ground that they were required for updation of records. The 2nd Respondent, being an office bearer in the company, could have got the records updated on his own or could have delivered it to the vendors, if it was on their insistence that he handed over the documents. However the letter dated 9.6.2008 shows that the title documents were delivered to a representative of the appellant company. This shows that the 2nd Respondent acknowledged that title was to be transferred to the company vide the agreement dated 26.4.2008. Section 630 nowhere stipulates that the property should have been allotted by the company to the accused as a perquisite of service. There may be a number of purposes for which the accused may be given lawful possession of the company s property during the course of employment for example, for safe custody of the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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