Shri Manohar Gunaji Anubhawne vs The State Of Maharashtra And Shri ...
2003 Latest Caselaw 865 Bom

JUDGMENT

J.A. Patil, J.

1. The petitioner was tried in Cri. Case No. 148/S/1994 by the learned Metropolitan Magistrate, 13th Court, Dadar, Mumbai, who convicted him of the offence under Section 630 of the Companies Act and sentenced him to pay a fine of Rs. 1000/- in default to suffer S.I. 15 days. The learned Magistrate further directed the petitioner to vacate the premises of the respondent company within 3 months. Feeling aggrieved thereby, the petitioner preferred Cri. Appeal No. 145/2002 in the Sessions Court, Mumbai but the learned Addl. Sessions Judge dismissed the same and directed the petitioner to hand over premises to the respondent company on or before 31.3.2003. The petitioner has therefore, filed the present petition under Articles 226 and 227 of the Constitution of India and under Section 482 of the Cr.P. Code to challenge both these orders.

2. The above mentioned complaint was filed by Ramnath Gorakhnath Ghag, who was the relevant time working as security officer in the Bombay Dyeing and Manufacturing Company Ltd.. The said company owns a residential building known as Spring Mills Chawls situated at G.D. Ambekar Marg, Naigaum, Mumbai. It was stated in the complaint that the petitioner accused was in the employment of the said company as a worker from 12.12.1966 to 11.10.1988 and that as per the policy of the company, he was allotted room No. 15 of Chawl No. 5(E), G.D. Ambekar Marg, Naigaum as an employee of the company for his use and occupation till such time as he would be in employment of the company. It appears that the company used to charge certain amount towards maintenance charges. The petitioner resigned from the service on 11.10.1988 and therefore, he was bound to hand over possession of the said room but he did not do so inspite of the company's letter dated 16.12.1988, calling upon him to vacate the said room. It was alleged that the petitioner continued to hold wrongful possession of the suit room and thereby, he committed an offence under Section 630 of the Companies Act. As pointed out above, the learned Magistrate convicted and sentenced the petitioner and the appeal filed by the petitioner against that order came to be dismissed.

3. I have heard Shri Madhav Jamdar, the learned Advocate for the petitioner. Shri Naphade, the learned senior Counsel for respondent No. 2 and Mrs. S.R. Kumbhat, APP for respondent No. 1 State. Shri Jamdar has assailed the impugned orders on the following grounds, namely, -

i) That the complaint is not filed by or in the name of the company to whom the room in question belongs but it is filed by one of its employees and therefore, the same is not maintainable.

ii) That the petitioner's possession of the suit room is protected in view of the notifications dated 20.3.2001 and 20.6.2002 issued by the State Government in exercise of its powers under Section 37(1) of the Maharashtra Regional and Town Planning Act, 1965.

iii) The petitioner is a tenant of the room in question and that therefore, his possession thereof is protected by the provisions of the Bombay Rent Act. The company has, therefore, to file a suit under Section 41 of the Presidency of the Small Causes Courts Act, if it wants to take possession from the petitioner.

iv) The relief under Section 630(2) of the Companies Act, is a discretionary relief and that both the courts below have erred in directing the petitioner to vacate the room within a stipulated period.

v) That the provisions of Section 630 of the Companies Act being penal in nature, must be construed strictly.

vi) The trial court had wrongfully called upon the petitioner to admit certain documents and therefore, whole trial has been vitiated.

It will be convenient to deal with each of these contentions serially, but before that a look at Section 630 would be advantageous. The section reads:-

"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 article 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 delivery 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".

4. As regards the first contention it may be noted that the complaint against the petitioner was filed by one Mr. Ramnath Gorakhnath Ghag, who was at the relevant time security officer in the company. The cause of the company as the complainant. It is, therefore, contended by Shri Jamdar that the complaint is not at all maintainable. It is true that in the cause title the name of the company to whom the room in question belongs should have been cited as the complainant but it cannot be ignored that para 1 of the complaint, makes it clear that the said R.G. Ghag has filed the complaint not for himself but on behalf of the company under an authority and in his representative capacity. In this respect, Shri Naphade pointed out that on 25.4.1994 the Board of Directors of the company had passed a resolution to grant a power of attorney in favour of the R.G. Ghag, the security officer and one M.N. Mahale of the company for the purpose of filing criminal proceedings in the court for recovery of possession from unauthorised occupants of its premises. Clause 1 of the said power of the attorney shows that both these persons were authorised to manage Spring Mills Chawl belonging to the company and to recover possession of portions thereof allotted to the employees of the company upon their ceasing to be in the service of the company. Clause 3 of the power of attorney, authorised both these persons to commence, carry on and prosecute actions, proceedings whatsoever including execution proceedings for recovering possession and compensation etc.. Clause 4 interalia authorises the said two persons generally to do, execute and perform any other acts, deeds, matters and things whatsoever which ought to be done, executed or performed or which in the opinion of the said attorneys ought to be done, executed or performed. It will thus be seen that though the complaint purports to have been filed in the name of the company's security officer R.G. Ghag, but in substance it is for and on behalf of the company only.

5. Shri Naphade relied upon the decision in Atul Mathur v. Atul Kalra 1990 Company Cases, Vol 68 (Supreme Court) 324, wherein the competence of the divisional sales manager of the company to file a complaint on behalf of the company was questioned. It was, however, held that the power of attorney granted in favour of the said Manager, duly authorised him to file such a complaint. The Supreme Court, therefore, rejected the contention that the complaint suffered from a material irregularity not curable under Section 465 of the Cr. P. Code. It was further pointed out that inspite of such a contentions, the respondent in that case had neither pleaded nor proved that failure of justice had occurred on account of the said irregularity. The observations made by the Supreme Court hold good, in his case also since nothing has been pleaded or pointed out as to how there has been failure of justice on account of filing of the complaint in the name of R.G. Ghag instead of the company. It cannot be ignored that possession of the room in question has been claimed not for the said R.G. Ghag but for the company itself to whom the said room belongs. There is, therefore, no substance in the first contention raised by Shri Jamdar and the same is therefore, rejected.

6. The second contention of Shri Jamdar is base don two notifications dated 20.3.2001, 20.6.2002 issued by the State Government in exercise of its power under Section 37(1), read with Section 154 of the MRTP Act. It may be noted that under the said Act, the Government has sanctioned the Development Control Regulations for Greater Mumbai, 1991. The Regulation 58 deals with the development and redevelopment of lands of Cotton Textile Mills. Clause 7(a) of the Regulation 58 provides as under:-

"(7) Notwithstanding anything contained above -

(a) if and when the built up areas of a cotton textile mill occupied for residential purposes as on the 1st of January, 2000 are developed or redeveloped, it shall be obligatory on the part of the land owner to provide to the occupants in lieu of each tenement covered by the development or redevelopment scheme, free-of-cost, an alternative tenement of the size of 225 sq. ft. carpet area;"

It appears that inspite of the said provisions, certain complaints were received by the Government about eviction of the occupants of the tenements in the premises of the Cotton Textile Mills and therefore, the Government thought it necessary to give protection to the occupants of such tenements by modifying Regulation 58(7)(a). The notification dated 20.6.2002 which contains the proposed notification, gives a direction to the Bombay Municipal Corporation, to initiate modification to Regulation 58. The proposed modification is in the nature of proviso which reads "Provided that no such occupants shall be evicted till such time, he or she is provided with alternative accommodation of the size of 225 square feet carpet area in such development or redevelopment scheme". Clause (D) of the directions states "Pending sanction to these modifications by the Government under Section 37(2) of the said Act, the aforementioned modifications shall come into effect forthwith." Shri Jamdar, therefore, contended that the petitioner is entitled to retain the room in his occupation unless and until he has been provided with the alternative accommodation of the size of 225 sq. feet carpet area. He further submitted that since the company has not at all done anything in this behalf, the petitioner is entitled to retain his possession of the said room and cannot be directed to vacate the same. It is an undisputed fact that the petitioner was in the employment of the company and that in that capacity he was allotted the room in question for his residential purpose. There is also no dispute of the fact that the petitioner resigned from the service on 11.10.1988 and continued to hold possession of the room. As a matter of fact, he was under an obligation to vacate the room as soon as he ceased to be an employee of the company. Both the courts below have recorded a concurrent finding of fact that petitioner's occupation of the room after he ceased to be the company's employee, is unauthorised and wrongful. Therefore, the petitioner has prima facie no right to continue to hold possession of the suit room any longer.

7. As regards the question whether the petitioner is entitled to get protection of the above mentioned Notifications, Shri Naphade pointed out that the said notifications were not in force when the offence under Section 630 of the Companies Act, was completed in December, 1988. Shri Naphade further submitted that the two notifications do not and cannot have retrospective operation. He further pointed out that the two notifications issued are under the MRTP Act and that the State Legislature has no legislative competence to nullify or modify any of the provisions of the Companies Act. According to Shri Naphade, if the State legislature cannot modify or repeal any of the provisions of the Companies Act, then the notifications issued under the MRTP Act, cannot do so and they are subject to the provisions of the Companies Act. The third submission of Shri Naphade in this respect is that the notifications in question are delegated legislation and it is settled law that delegated legislation cannot have any retrospective effect. He further submitted that a central legislative enactment cannot be affected or altered by the State Government notifications issued under the State Law. The fifth and last submission of Shri Naphade is that the Development Control Regulation 58(7) necessarily postulates that the occupation must be lawful and that the said Regulation cannot legalise illegal occupation of the premises.

8. A careful consideration of all these submissions made by Shri Naphade would show that it has much force. It need not be disputed that the Companies Act, which is a central enactment prevails over the notification issued by the State Government under the MRTP Act. It cannot be ignored that the petitioner was a mere licencee or service occupier in occupation of room No. 15 and he was supposed to occupy the same during his employment. Upon his ceasing to be in the employment of the company for whatever reason, he was supposed to vacate the room and hand over possession thereof to the company. Despite this fact, the petitioner has continued to be in the possession of the said room for number of years. Therefore, both the courts below have rightly come to the conclusion that the petitioner is in wrongful occupation of the room in question. It cannot by any stretch of imagination be said that the object of the Regulation 58(7) issued under the MRTP Act for the protection of occupants of tenemants in the premises of the cotton textile mills, is to afford protection to the persons who are in unauthorised and wrongful occupation of the premises. There is also much substance in the submission of Shri Naphade that Regulation 58(7) cannot have retrospective operation and it cannot legalise unlawful possession. In the instant case, the petitioner failed to vacate the room No. 15 in his occupation, after he was served with a notice dated 16.12.1988. Therefore, it is obvious that commission of the offence by the petitioner under Section 630 of the Companies Act was completed in December, 1988. The above mentioned notifications which were issued about 15 years thereafter, cannot have effect of legalising the petitioner's act of wrongfully withholding the possession of the room which he was bound to vacate after his resignation from the service. In view of this discussion, the second contention raised by Shri Jamdar deserves to be rejected.

9. Coming to the third contention of Shri Jamdar, it is contended that the petitioner is not an unauthorised occupant of room No. 15 and that on the contrary he is tenant of the said room. He also pointed out that the petitioner was paying maintenance charges on account of his occupation of the said room. According to Shri Jamdar, the question whether the petitioner is or is not a tenant of room No. 15 cannot be decided on the forum of criminal court in a complaint filed under Section 630 of the Companies Act and that the proper forum to decide this question is the court of Small Causes, Mumbai which alone has jurisdiction to entertain and try the disputes between the landlords and the tenants. Shri Jamdar also referred to certain provisions of the Bombay Rent Act and relied upon the decision of the Supreme Court in Jagdish Chandra Nijhawan v. S.K. Saraf . However, having regard to the facts in that case, it is obvious that the reliance upon it is totally misconceived and irrelevant. In that case the facts were that the appellant was appointed as Managing Director of the company for a limited period and provided with rent free furnished flat till he was with the said company. There was an agreement of service which contained certain terms and one of such terms was as under:-

"i) If such termination be at the instance of the company, then the employee and/or the employee's wife shall continue to enjoy rent-free accommodation during their respective lives but only until the employees take sup any other profession, vocation or business.

The appellant's services were terminated by the company and he was called upon to hand over possession of the flat. Since, he failed to do so; the company filed a criminal case against him for the offences under Section 406, 408 and 409 of the I.P. Code and under Section 630 of the Companies Act. The company also filed a separate suit for recovery of possession of the flat. It was in this set of facts that the Magistrate discharged the appellant, holding that the dispute between the parties was of a civil nature. The order of the Magistrate was upset by the High Court held that a prima facie case was made out against the appellant for the said offence but the Supreme Court set aside the order of the High Court and restored the order of discharge passed by the Magistrate, pointing out that the appellant did not resign nor take up any employment elsewhere. The aforementioned condition in the service agreement was prima facie applicable and that it cannot be said that appellant had wrongfully withheld the flat of the company. In the instant case, there is no such service agreement between the petitioner and the company, authorising the petitioner to retain possession of the room No. 15, even after the termination of his service.

10. Shri Naphade pointed out that the contentions of the petitioner that the company must file its suit under Section 41 of the Presidency Small Causes Courts Act to recover possession, has no substance. Under Section 41(1) of the said Act, the Court of Small Causes has exclusive jurisdiction to entertain and try all suits and proceedings between licensor and licensee, or a landlord and tenant, relating to recovery of possession of any immovable property situated in Greater Bombay. Shri Naphade, however, pointed out that Sub-section (1) of Section 41 does not have any application to suits or proceedings for recovery of possession of Bombay Rent Act, Bombay Government Premises (Eviction) Act, 1955, the Bombay Municipal Corporation Act, Bombay Housing Board Act, 1948 or any other law for the time being in force, applies. Emphasising the words "any other law for time being in force" occurring in Sub-section 2 of Section 41, Mr. Naphade, therefore, rightly submitted that Section 630 of the Companies Act is one of such laws, which is in force and which applies to recovery of possession of immovable properties of the company's employees who no longer have a right to continue to occupy the premises allotted to them during their employment. In this respect Shri Naphade relied upon the decision of a learned Single Judge of this Court in Dr. Suresh Venkatrao Nerlekar v. Sharanghadar Pandurang Nadkarni and Ors. , wherein the facts were that the petitioner was an ex-employee of the respondent company, conducting dispensary in the premises of the company under an agreement of leave and licence. After termination of his employment, the petitioner denied that he was permissive user of the premises and contended that the was tenant of respondent company. The company then filed criminal case against him under Section 630 of the Companies Act. Before that the respondent company had also filed a suit for possession in the court of small causes. On these facts, the learned Judge held that the petitioner has obtained the premises as an employee of the company and that his occupation of the premises after termination of the employment was without any lawful authority and it was wrongful. Although the issue of tenancy of the petitioner was common before the civil court and the criminal court, the learned Judge declined to stay the prosecution, observing that civil and criminal process works in different spheres. It was further observed that if the premises were given to the petitioner as medical officer and if they were to be enjoyed by him for a particular purpose and with special permission of the respondent Company, as mentioned in the agreement, it is not necessary for the criminal court to find out his actual status at all and therefore, to that extent the issue before the criminal court will not be ascertainment of the status. In the instant case, admittedly the company has not filed any suit against the petitioner for recovery of the possession nor has the petitioner filed any such suit for declaratory relief that he is a tenant in the suit room. Similar question arose in Govind T. Jagtiani v. Sirajuddin S. Kazi, 1984 Company Cases Vol. 56 Bombay 329, wherein the officer of the company who retired from service was found to be withholding wrongful possession of the flat, which was allotted to him by the company for his occupation. It was contended on his behalf that in view of the provisions of the Public Premises Eviction Act, the learned Metropolitan Magistrate had no jurisdiction to try the alleged offence punishable under Section 630 of the Companies Act. The learned single Judge of this court held that the word "proceedings" used in Section 15 of the said Act, does not include criminal proceedings and therefore, there was no ouster of the jurisdiction of the criminal court. It was further pointed out that on a plain reading of Section 630, it is clear that if an employee or officer of a company wrongfully withholds any property belonging to the company it is an offence punishable with fine of Rs. 1000/-. It was pointed out that Sub-section 2 of the Section 630 permits the court, trying the offences to pass an order directing such officer or employer to deliver up or refund, within time to be fixed by the court any such property wrongfully obtained or wrongfully withheld or knowingly misapplied. The said sub-section further makes it clear that disobedience of the order of the court is made punishable and a sentence to suffer imprisonment for a term of two years is provided. It was further pointed out that it is only that the dis-obedience of the order of the court that is made an offence, an officer or employee of a company may not vacate the premises as directed by the court and may undergo imprisonment for a period of two years, allowing his family members to enjoy the property. It was held that in such eventuality, there cannot be any order of eviction from the property of the company under Section 630 of the Companies Act. In Krishna Avtar Bahadur v. Col. Irwin Extross 1986 Company Cases Vol. 59, Bombay 417, a similar question about the tenancy of the petitioner accused was raised and it was contended that the petitioner was entitled to the protection of the Bombay Rent Act and that the criminal court had no jurisdiction to entertain and continue the proceedings under Section 30 of the Companies Act. This contention was, however, rejected and it was pointed out that plea of tenancy was not at all open on the facts of that case, when the flat in question belonged to the company and it was occupied by the petitioner during the tenure of his employment. After the termination of his service, he could not claim to continue to occupy the premises on the ground that he was a tenant thereof. It was observed that while considering whether the plea of tenancy is a bonafide plea, it is always necessary to examine and consider the transaction on the basis of which the plea of tenancy is based, and if on those facts, no plea of tenancy can be raised, such a plea cannot be entertained.

11. Shri Jamdar relied upon the decision in Chinnupashabi w/o. Hasan Jahagirdar v. Fatesingh Shikshan Sanstha 1999 (3) Mh.L.J. 167, wherein the deceased was working as a teacher in the school run by the respondent and as he was in need of accommodation, he was provided with a room in the students hostel. After the death of the said teacher, the possession was sought from his legal heirs, who were residing with him. It appears that the contention, that the deceased teacher was a tenant of the premises was raised but the same was rejected, interalia that if a person to be a tenant under the Bombay Rent Act, the rent has to be paid in money and it cannot be in the form of service. These facts will make it clear that reliance upon these authorities is useless and irrelevant. Shri Jamdar further relied upon the decision in Hiralal Vallabbram v. Sheth Kdsturbhai Lalbhai . However, this decision is also not at all relevant for the purpose of this case as it was a case of ejectment on the ground of sub-letting and default in payment of rent. In view of the above discussion, the third contention of Shri Jamdar is rejected.

12. The fourth contention of Shri Jamdar is based on Sub-section 2 of Section 630 of the Companies Act. According to him it is not obligatory on the part of the court to direct the ex-employee of the company to deliver possession of the premises in his occupation. Shri Jamdar emphasised the use of word "may" in Sub-section 2 and pointed out that in the circumstances the petitioner having raised a plea of tenancy, the courts below should not have directed him to hand over possession. According to him instead the courts below should have left the question of the petitioner's tenancy to be decided at the proper forum. In this respect Shri Naphade submitted that the word "amy" used in Sub-section 2, has to be read as "must". For this purpose, he relied upon the decisions in Mangat Ram Roshan Lal v. Harbans Lal, and Commissioner of Income-tax, Ernakulam v. Smt. P.K. Noorjahan, . In the former case, it was held that the words used in a statute must be given their natural meaning. If the language of the statute is clear and unambiguous, the court must give effect to it unless there are strong and obvious reasons to the contrary. In the said case, it was held that the use of the word "may" in Section 4 of the Jammu and Kashmir House and Shops Rent Control Act, does not mean "must". In the later case, the Supreme Court held that the word "amy" as used in Section 69 of the Income Tax Act, cannot be read as "shall". I am, however, not inclined to accept the interpretation which Shri Naphade has tried to place. In my view the word "amy" used in Sub-section (2) deserves to be given its plain and grammatical meaning. It may be noted that the offence of wrongfully withholding of property can be in respect of any property of the Company whether movable or immovable and it is just possible that by the time the employee is held guilty, he may have already lost, spent disposed of the movable property given in his possession. In such an eventuality the court will not be in a position to order the officer or employee to deliver it up or the refund to the company. The Legislature appears to be alive to such an eventuality and therefore, purposely used the word 'may' instead of the word 'shall' in Sub-section (2) of Section 630. It is, therefore, discretionary and not mandatory upon the court to pass an order under u/s. Sub-section (2) of Section 630. In my opinion, in the facts and circumstances of the case both the courts below have correctly used their discretion in favour of the company and directed the petitioner to hand over possession of the room who has been wrongfully withholding for a number of years. Hence, I do not accept the fourth contention of Shri Jamdar.

DT. 05.08.2003

13. Coming to the 5th ground, it was contended by Shri Jamdar that the provisions of Section 630 being penal in nature must be construed strictly. I, however, do not find any force in this submission for the simple reason, that Sub-section 2 of Section 630 at any rate gives a discretion to the court to direct the concerned employee of the company to deliver the property which he has wrongfully withheld. There is nothing wrong if the learned Magistrate in the peculiar facts and circumstances of the case, decides to exercise of the discretion in favour of the company and direct the petitioner to hand over possession of the premises to the company. No question of strict consideration of Sub-section 2 of Section 630 of the Companies Act, therefore, arises in this case. Shri Naphade referred to the decision in Lalita Jalan v. Bombay Gas Co. Ltd., 2003 (4) SCALE 58, wherein it was observed that the principle that a statute enacting an offence or imposing a penalty is strictly construed is not of universal application. Reference was made by their Lordships to certain observations made by Krishna Iyer, J. in Murlidhar Meghraj Loya v. State of Maharashtra in connection with Food Laws and it was observed that literal and lexical construction of Food Laws is likely to leave loopholes for the offender to sneak out of the meshes of law and should be discouraged and criminal jurisprudence must depart from old canons defeating criminal statues calculated to protect the public health and the nation's wealth. The Supreme Court referred to the objections that the provisions contained in Section 630 of the Companies Act is of penal nature and observed of recovery of the property and if, in spite of demand or subsequent order of the Court, the possession of the property is not returned to the company, the question of imposing penalty will arise. It was further observed that possession of the property by an employee or anyone claiming through him of such property is unlawful and recovery of the same on the pain of being committed to a prison or payment of fine cannot be stated to be unreasonable or irrational. It may further be noted that Sub-section 2 of Section 630 gives an option to the concerned employee to suffer imprisonment for a term which may extend to two years if he wants to withhold possession of the premises to him. In view of this position, it is not possible to accept the submission of Shri Jamdar.

14. The last contention of Shri Jamdar is with regard to the fact that during the course of examination in chief of PW-1, the learned Magistrate called upon the petitioner accused to admit certain documents which were tendered by its witness. In this connection it may be noted that Section 294 of the Cr.P. Code, prescribe such a procedure for admitting the documents and objecting to dispense with the formal proof to save the time. There might have been some irregularity on the part of the learned Magistrate in following procedure prescribed by Section 294, but it is not pointed out on behalf of the petitioner as to how that has caused prejudice to him. At any rate, the petitioner was not forced to admit the said documents. It was on his admission that the documents came to be accepted. There is, therefore, no substance in this last submission also made on behalf of the petitioner.

15. Taking into consideration the above mentioned objections, I am of the opinion that there is no merit in the challenge given to the impugned orders. There is, therefore, no reason for this court to interfere with the impugned orders. Consequently, the petition is dismissed and the rule is discharged.

16. Shri Jamdar prays for three months time for the petitioner to vacate the premises. It may be noted that the petitioner has been wrongfully withholding the premises for about last 15 years. Shri Jamdar states that the petitioner proposes to file an appeal in the Supreme Court against this order. In view of this fact, eight weeks time is granted to the petitioner for vacating the premises in his possession.

C.c. expedited. An ordinary copy of this order duly authenticated by the Sheristedar/P.A. of this court is allowed.