Sangeeta vs Texmaco Infractructure & ...
2014 Latest Caselaw 878 Del

*   IN THE HIGH COURT OF DELHI AT NEW DELHI
%                        Date of Judgment on:     17.02.2014.
 +  CRL.REV.P. 104/2014
SANGEETA
                                                    ..... Petitioner
                    Through    Mr. Saurabh Chauhan, Ms. Priya
                               Singh and Mr.Varun Jain, Advs.
                    Versus
TEXMACO INFRACTRUCTURE &
HOLDINGS LTD & ANR
                                            ..... Respondents

                    Through    Mr. Kunal Cheema, Mr.Dhruv
                               Kapur and Mr. Vijajender Kumar,
                               Advs along with Mr. Rajesh
                               Dhalani, Law Officer
CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J.(Oral)

Crl. M.A. No.2736/2014 (Exemption)
1      Exemption is allowed subject to all just exceptions.
2      Application disposed off.

CRL.REV.P. 104/2014 & Crl. M.A. No.2735/2014 (Stay)

3 The petitioner is aggrieved by the impugned judgment dated

21.01.2014 which has endorsed the finding of the Sessions Judge dated

26.10.2013 wherein the petitioner had been held guilty under Section

630 of the Indian Companies Act, 1956 (hereinafter referred to as the

'said Act') and had been sentenced by the first Court to pay a fine of

Rs.1,000/- per month w.e.f. October, 2004 to September, 2013 (total 108

months) totaling to Rs.1,08,000/- for the period of illegal occupation of

the quarter; there was a further direction that in case the convict vacates

the quarter on or before 30.11.2013, the fine amount will not be

recovered; in default of payment of fine, the convict was to undergo SI

for 6 months; there was a further direction that in case the convict fails

to deliver the vacant and peaceful possession of the quarter to the

complainant within time and she also fails to deposit the fine, she would

undergo SI for a period of 1 year.

4 The impugned judgment on 21.01.2014 had extended the period

for vacation of the quarter by a period of 30 days; the quarter had to be

vacated by the petitioner on or before 20.02.2014.

5 The facts as emanating from the record shows that M/s Texmaco

Limited (respondent No. 1) had instituted complaint No.1286/2003

under Section 630 of the Companies Act. The allegation was that on

01.11.1976, late Partap Giri, father of petitioner had joined service of

M/s Birla Cotton Spinning and Weaving Mills Ltd. (hereinafter referred

to as the 'Mill') and on 28.12.1978 had been allotted quarter No.47-A,

Shivaji Lines, Shakti Nagar in his capacity as an employee of the Mill.

The Mill has since been closed w.e.f. 30.11.1996. There was an

application to handover the vacant and peaceful possession of the

quarter but he failed to do so. After his death on 29.09.2004, the

petitioner did not vacate the quarter; she wrongfully withheld the same.

6 On this complaint, after summoning, trial was held and evidence

was led. The complainant Radhey Shyam was examined as PW-1. He

had proved the resolution of the company (Ex.PW-1/1) and power of

attorney (Ex.PW-1/2) authorizing him to file and institute the complaint.

No cross-examination of these two documents had been effected by the

respondent. Letter Ex.PW-1/5 dated 28.12.1978 substantiated the fact

that the father of the petitioner had been allotted this quarter on a license

basis on monthly charges of Rs.7/- apart from the electricity and water

charges; para 5 of this letter specifically postulated that this quarter was

to be vacated on cessation of his employment or any violation of terms

and conditions of the license. This letter was signed by the father of the

petitioner. It is an undisputed document. No argument has been

addressed by the learned counsel for the petitioner on this score either.

One DW had also been examined.

7 The admitted position being that the father of the petitioner had

been allotted this quarter on 28.12.1978 while he was working with the

Mill which was since 01.11.1976.

8 Further facts reveal that M/s Texmaco Limited had acquired

proprietary rights in respect of this Mill on 03.01.1983 in Company

Petition No.59/1982 pursuant to a scheme of arrangement sanctioned by

the Company Judge of the Delhi High Court which was a scheme of

arrangement between the Mill and M/s Texmaco Limited; on the

strength of this scheme of arrangement, M/s Texmaco Limited had filed

the present complaint.

9 The Magistrate court had convicted the petitioner under Section

630 of the Companies Act. This fact finding was endorsed by the

Sessions Judge.

10 The principal thrust of the argument of the learned counsel for the

petitioner is that although M/s Texmaco Limited has alleged that there

was a scheme of arrangement merging the Mill with M/s Texmaco

Limited and although admittedly this scheme of arrangement has been

sanctioned by the Delhi High Court on 03.01.1983 but this order

specifically postulated that this arrangement would come into effect

subject to the approval of the Kolkata High Court as one of the two

companies i.e. M/s Texmaco Limited had its registered office at

Kolkata. Submission being that no such order has been placed on record

and as such the complaint itself (filed by M/s Texmaco Limited) is void

ab initio as M/s Texmaco Limited did not have the locus standi to file

the complaint; the father of the petitioner was not an employee of M/s

Texmaco Limited. The second submission of the learned counsel for the

petitioner is that Crl. Appeal No.1214/2012 titled as "M/s Texmaco

Limited Vs. Mahavir" is pending in which locus standi of M/s Texmaco

Limited to institute complaints against ex-employees is under question

and till that appeal is decided, this matter also cannot attain a finality.

11 Arguments have been refuted. Learned counsel for the respondent

has placed on record the approval granted by the Kolkata High Court

evidencing the fact that the scheme of arrangement dated 03.01.1983

passed by the Delhi High Court in Company Petition No.59/1982

merging the two companies i.e. the said Mill with M/s Texmaco

Limited. The assets and liabilities of the said Mill had been taken over

by M/s Texmaco Limited, the transferee company. Submission being

that in this view of the matter, M/s Texmaco Limited was well within its

right to file the present complaint as the petitioner having failed to

vacate the property which in pursuance of this merger order had vested

with the transferee company, M/s Texmaco Limited had the authority to

file the complaint. On the second submission, it has been pointed out

that pursuant to this scheme of arrangement M/s Texmaco Limited had

filed complaints against other employees which had been dismissed in

default and a criminal leave petition had been filed against these orders

of acquittal which criminal leave petition has been converted into an

appeal i.e. Crl. Appeal No.1214/2012; submission being that that appeal

would govern the facts of those cases alone.

12 Arguments have been heard and record has been perused.

13 This Court is sitting in revisional jurisdiction. There are two facts

findings returned by the two fact finding courts below i.e. order of the

Magistrate dated 26.10.2013 which has appreciated the facts after

delving into the evidence which had been led by the respective parties.

The order of the learned Magistrate convicting the petitioner under

Section 630 of the Companies Act had been endorsed by the second fact

finding Court which was the appellate Court of the Sessions Judge and

which had again gone into the details of the facts which had been

pleaded as also the legal submissions made by the respective parties; the

order of the Magistrate had been reaffirmed.

14 This Court sitting in revisional jurisdiction can interfere with the

findings of fact only if there is patent illegality or a glaring perversity

pointed out by the learned counsel.

15 In 2004 Cri LJ 4254 State of Maharashtra v. Jagmohan Singh Kuldip Singh Anand, the Supreme Court in this context had observed:

" In embarking upon the minutest re-examination of the whole evidence at the revisional stage, the learned Judge of the High Court was totally oblivious of the self-restraint that he was required to exercise in a revision under Section 397 Cr. PC. On behalf of the accused, reliance is placed on the decision of this Court to which one of us (Justice Sabharwal) is a party i.e. Ram Briksh Singh v. Ambika Yadav. That was the case in which the High Court interfered in revision because material evidence was overlooked by the Courts below."

16 It is on this touchstone that the arguments of the respective parties

have to be appreciated.

17 Before delving into the submissions of the parties, the provisions

of Section 630 of the said Act under which this conviction has followed

are necessary to be examined.

Section 630 of the said Act reads as under:-

"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 contri- butory 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." 18 Section 630 of the said Act had been engrafted in the Legislature

to provide speedy relief to a company where its property is wrongfully

obtained or wrongfully withheld by an 'employee' or an 'officer' or a

'past employee or an officer' or 'legal heirs and representatives'

deriving their colour and content from such an 'employee or officer' in

so far as the occupation and possession of the property belonging to the

company is concerned. The failure to deliver property back to the

employer on the termination, resignation, superannuation or death of

any employee, would amount to wrongful withholding that property

giving rise to an actionable claim under Section 630 of the said Act. A

broader, liberal as also a purposeful interpretation has to be given to

Section 630 in furtherance of the object and purpose for which this

legislation has been engrafted. The intent of this legislation has been

noted by the Hon'ble Apex Court in 1995 RLR 232 (SC) Smt. Abhilasha

V.K. Jain Vs. Cox and Kings and Smt. Sunita Bhagat Vs. Voltas Ltd. and

the following observations are relevant:-

"If an employee or a past employee or anyone claiming the right of occupancy under them, were to continue to "hold" the property belonging to the company, after the ri ght to be in occupation has ceased for one reason or the other, it would not only crea te difficulties for the company, which shall not be able to allot that property to its other employees but would also cause hardship for the employee awaiting allotment and defeat the intention of the legislature. The courts are therefore obliged to place a broader, liberal and purposeful construction on Sec. 630 of the Act in furtherance of the object and purpose of the legislation and construe it in a wider sense to effectuate the intendment of the provision. The "heirs and legal representatives" of the deceased employee have no independent capacity on the property, which stood allotted to the employee or the officer concerned or resist the return of the property to the employer, in the absence of any express agreement to the contrary entered with them by the employer."

19 The first argument of the learned counsel for the petitioner has

been answered by the respondents by placing on record the order of

Kolkata High Court which clearly shows that this scheme of

arrangement dated 03.01.1983 passed in Company Petition No.59/1982

has been approved by the Kolkata High Court on 20.12.1982.

20 This scheme of arrangement has been proved as Ex.PW-1/4. It

clearly shows that M/s Texmaco Limited has become the owner of the

quarter in question as also the employer of the father of the petitioner;

all rights and liabilities of the transferor company stood vested with the

transferee company i.e. M/s Texmaco Limited.

21 Relevant extract of the said scheme is reproduced here as under:-

"Weaving Mills Textiles as well as quarter in question.

1. That all the property, rights, and powers of the said transferor company specified in the first, second and third parts of the Schedule II hereto and all the other property, rights and powers of the said transferor company be transferred without further act or deed to the said transferee company and accordingly the same shall, pursuant to section 394(2) of the Companies Act, 1956, be transferred to and vest in the said transferee company for all the estate and interest of the said transferor company for all the estate and interest of the said transferor company therein but subject nevertheless to all charges now affecting the same, and

2. That all the liabilities and duties of the said transferor company by transferred without further act or deed to the said transferee company and accordingly the same shall, pursuant to section 394(2) of the Companies Act, 1956, be transferred to and become the liabilities and duties of the said transferee company; and

3. That all proceedings now pending by or against the said transferor company be continued by or against the said transferee company; and

4. That all contracts, deeds, bonds, agreements and instruments of whatever kind or nature relating to the said units of M/s Birla Cottons shall continue to be in full force and effect against or in favour of Texmaco as the case may be and enforced as fully and effectively as if Texmaco instead of Birla Cotton had been a party thereto."

22 Moreover in IR 2007 Delhi 147 Kamla Rani and Ors. Vs. M/s

Texmaco Ltd. a Bench of this Court had relied upon the same scheme of

arrangement dated 01.03.1983 to arrive at a fact finding that assets of

the Mill stood merged with M/s Texmaco Limited which was the

transferee company and the successor in interest of the said Mill. Thus

the first argument of the learned counsel for the petitioner must

necessarily fail. The complainant having stepped into the shoes of the

said Mill by virtue of this scheme of arrangement which stood

sanctioned not only by the Delhi High Court but also by the Kolkata

High Court, M/s Texmaco Limited was well within its right to file the

present complaint.

23 The second argument of the learned counsel for the petitioner

must also fail. Crl. L.P. No.26/2011 titled as "M/s Texmaco Limited Vs.

Nanan." would only apply to the facts of that case. The orders passed in

that appeal would have no bearing to the facts of the instant case. In fact

vide orders dated 29.04.2011 in Crl. L.P. No.26/2011 a Bench of this

Court while clarifying the order dated 19.01.2011 had noted that the

order passed in that case will not extend a stay of trial of other

complaints filed by M/s Texmaco Limited against other persons.

24 This Court has already returned a finding on the first issue i.e.

M/s Texmaco Limited being the transferee company and having taken

over all assets and liabilities of the said Mill which has been approved

not only by the Delhi High Court but also by the Kolkata High Court, it

was well within its right to file this complaint. Further a Bench of this

Court in Nanan (supra) had on 29.04.2011 alleged that the orders passed

in that Crl. L.P. will not extend to other complaints filed by M/s

Texmaco Ltd (copy of this order is on record). It is thus clear that this

second argument of the learned counsel for the petitioner is also without

any merit.

25 At the outset, learned counsel for the petitioner was given a

suggestion that time period could be extended for vacation of the quarter

but he declined the offer and sought an order on merits stating that this

revision petition be decided on its merits. As such further extension of

time period has not even been prayed for.

26     Petition is without any merit. Dismissed.

                                             INDERMEET KAUR, J
FEBRUARY 17, 2014
A