Companies Act Case Law Automobile Products India Ltd. Appellant Vs Das John Peter Ors.Respondents

Companies Act Case Law

Automobile Products India Ltd. Appellant Vs Das John Peter Ors. Respondents

Crl.A. @ S.L.P.(Crl.)No.6204 of 2008

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REPORTABLE
IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.1304 OF 2010
[Arising out of S.L.P.(Crl.)No.6204 of 2008]
Automobile Products India Ltd. ….Appellant

Versus

Das John Peter & Ors. ….Respondents
J U D G M E N T

Deepak Verma, J.

1. Leave granted.

2. Under the web of hypertechnicalities justice has taken a

back seat as is projected in the order dated 22.11.2006,

passed by Additional Chief Metropolitan Magistrate,

Girgaum, Mumbai in Crl. Case No. 38/S/2005 filed by

appellant herein against accused respondent No.1 and 2,

whereby and whereunder the appellant’s criminal complaint

filed under Section 406 read with Section 34 of the

Indian Penal Code [hereinafter referred to as “IPC”] and

under Section 630 of the Companies Act, 1956 (hereinafter

referred to as “the Act”) was dismissed. Against the said

order of dismissal, the appellant herein filed an

application before the learned Single Judge of the High

Court in Criminal Application No. 450 of 2007 seeking

leave to file the appeal which was also dismissed on
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
14.7.2008,

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giving rise to filing of this appeal by the original

complainant. Unfortunately, the accused have also with

vehemence supported hypertechnicalities adopted by the

aforesaid two courts, to contend that no interference is

called for in the light of the facts as found in the

aforesaid two orders.

3. Facts shorn of unnecessary details are mentioned herein

below:

4. Appellant is a Company (hereinafter shall be referred to

as “the Company”) duly registered under the Act and is

carrying on business of manufacturing two and three

wheelers’ automobile products. Mr. V.S. Parthasarthy is

the Factory Manager of the Appellant-Company and has been

posted in Mumbai. A resulution has been passed by the

Company on 31.12.2001 to authorise Mr. V.S.

Parthasarathy, Factory Manager to represent the company

and to sign, verify, execute and deliver all

vakalatnamas, pleadings, complaints, affidavits,

declarations, petitions, written statements, rejoinders,

papers, deeds, receipts, assurances etc. in a court of

law. On the same day, he has been duly authorised by

virtue of the Power of Attorney executed in his favour by

the Appellant Company to file and prosecute the

aforesaid complaint.
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
5. On the complaint having been filed before the Additional

Chief Metropolitan Magistrate, the same was

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registered. The allegation in the complaint is that

company is having a flat situated at 17, Carmichael Road

(behind Jaslok Hospital), Mumbai. One room near the

garage (hereinafter shall be referred as the ‘servant

quarter’) is also under the ownership of the company for

being used by its servants. Even though, the complaint was

filed under Section 406 / 34 of the IPC as also under

Section 630 of the Act, but cognizance was taken by the

trial court only under Section 630 of the Act.

6. Respondent No. 1 (accused No.1 herein) was working as a

caretaker with the Company to look after the flat. It is

not in dispute that he has retired from the service of

the Company with effect from 6.3.1992. The servant

quarter was allotted to accused No. 1 by virtue of his

service in the company. Obviously, after his attaining

age of superannuation, he was supposed to have delivered

its peaceful and vacant possession to the

appellant/company. Instead of doing so, he gave its

possession to his daughter, accused No.2, and shifted to

Ambernath. As on date, it is accused No. 2, daughter of

accused No.1, who is in actual physical possession of the

said servant quarter.

7. It is pertinent to note that a written undertaking is
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
said to have been tendered by respondent no.1 on 5.1.2000

to the effect that he will vacate the servant quarter

within one month thereof.

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8. Since despite serving several legal notices to the

accused, they refused to hand over its peaceful vacant

possession to the appellant, it was constrained to file

the aforesaid complaint.

9. Shri V.S. Parthasarthy, appeared as PW-1, and deposed

before the Court circumstances under which accused No.1

was handed over possession of the servant quarter, where

he had worked as caretaker. After his retirement,

despite promise made to the Company he has failed to

vacate the servant quarter. His evidence has been dealt

with extensively by the trial court but it is not

required to be considered at this stage as Appellant’s

Criminal Complaint has been dismissed on technical

ground.

10.Defence of the accused in short was that the complaint

as filed by company through Mr. V.S. Parthasarthy is not

maintainable inasmuch as the Power of Attorney dated

31.12.2001, said to have been executed in favour of Mr.

V.S. Parthasarthy is a fictitious document. The services

of accused No.1 were never terminated and even after

retirement he came to be re-appointed. Thus, he has a

right to continue in its possession. As regards his
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
undertaking given to the Chairman of the Company on

5.1.2000, wherein he specifically agreed to vacate the

premises on or before 31.1.2000, he contended the same

was not tendered voluntarily, meaning thereby the same

was

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given under coercion, threat, undue influence, thus it was

not binding.

11.Learned trial court critically examined the Power of

Attorney and came to the conclusion that the same was

executed on 31.12.2001, was notarised on 5.6.2001, and

the stamp papers were purchased on 18.4.2002, which gives

rise to suspicion with regard to genuineness and

correctness of Power of Attorney. Ultimately, it held

that the said Power of Attorney is a fictitious document.

Thus, on the strength of it, complaint could not be

filed. As regards resolution of the company passed on

31.12.2001 was concerned, it was held that complainant

failed to file the same, while he was in the witness box.

Admittedly, the company faced financial crisis and has

since been closed with effect from 21.1.1993 under the

orders of BIFR.

12.Ultimately, after appreciating oral and documentary

evidence available on record, the following order came to

be passed by Additional Chief Metropolitan Magistrate,

Mumbai.
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
“The accused No.1 Mr. Das John Peter and
accused No.2 Ms. Grace Peter are hereby
acquitted for the offence punishable u/s.630
of the Companies Act.”
Their bail bonds, if any, stands
cancelled.”
13. Feeling aggrieved thereof, the appellant filed an

Application before the learned Single Judge of the

High

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Court seeking leave to file appeal, against the order of

acquittal of the accused. Unfortunately, the learned Single

Judge did not examine the matter in proper perspective and

fell into grave error, in refusing to grant leave and

rejected the appellant’s application, for prosecution of

the accused under Section 630 of the Act.

14.Feeling aggrieved thereof, this appeal has been

preferred by the complainant company.

15.We have accordingly heard Mr. Altaf Ahmed learned Senior

Counsel for the appellant, Mr. Sanjay Kharde for

respondent No.1 and 2 and Ms. Asha Gopalan Nair, for

respondent No. 3-State of Maharashtra at length.

Perused the record.

16.At the outset, we inquired from learned counsel for the

accused, whether he would be ready and willing to vacate

the premises, provided reasonable and sufficient time is

granted to them but learned counsel vehemently opposed

any such suggestion and contended that the complaint has
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
rightly been dismissed on technical grounds which went to

the root of the matter, therefore no interference is

called for.

17.With an intention to satisfy ourselves with regard to

the correctness, genuineness and authenticity of the

resolution dated 31.12.2001 passed by appellant company

in favour of Mr. V.S. Parthasarthy and the Power of

Attorney

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of the even date, we requested the appellant to produce the

originals for our perusal. They have produced the same

before us. We have critically and with microscopic eye

examined the same. After doing so, we do not find either of

the two documents can be termed as fictitious or

manufactured documents so as to oust the appellant from the

arena of justice.

18.No doubt, it is true that Power of Attorney was executed

on 31.12.2001, but has been scribed on a stamp paper

purchased on 18.4.2002. But it has been notarised on

5.6.2002 and not on 5.6.2001 as has been noted by the

trial court. The Rubber stamp seal put by the notary

clearly depicts it as 5.6.2002.

19.Thus, after going through the same, it leaves no shadow

of doubt in our mind that the same are genuine and duly

authorised Mr. V.S. Parthasarthy to file and prosecute

the complaint against the accused. We had also passed on
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
the originals to the learned counsel for the respondent-

accused to satisfy himself but still, after going

through the same he persisted in his arguments tooth and

nail that the date of Power Attorney in fact is 5.6.2001

and not 5.6.2002. However, we are unable to agree to the

argument as advanced by the learned counsel for the

accused as he is trying to stretch it beyond our

comprehension.

 

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20.Admittedly, neither the Trial Court nor the High Court

have gone into the merits of the matter. Thus with an

intention to do complete justice to the parties, we have

heard the counsel for the parties at length and gone

through the merits of this appeal.

21.It is not in dispute that accused No. 1 was appointed

as a caretaker to look after the flat of the

appellant/company at ‘Kamal Mahal’ Co-operative Housing

Society Ltd., Carmichael Road, Bombay 400 026 owned and

possessed by the Company. It is further not in dispute

that accused No. 1 had retired from the company w.e.f.

6.3.1992. At the time of entering into service,

respondent No. 1 had entered into agreement with the

company on 22.9.1980, which specifically granted

permission to the company to revoke the licence, of the

servant quarter at any time and to take possession. It
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
is further not in dispute that on 5.1.2000 accused No.1

wrote a letter to the Chairman of the Company

specifically and categorically agreeing to vacate the

servant quarter by 31.1.2000. However, he did not deem it

fit and proper to honour his own commitment rather has

defied it on various grounds. To appreciate the arguments

as advanced by learned senior counsel Shri Altaf Ahmed

for the appellant, it is necessary to examine the

relevant provisions of the Act under which, the company’s

complaint was filed.

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22.Section 630 of the Act reads as under:

“630. Penalty for wrongful withholding of
property 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 ten 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.”
23.A reading of the aforesaid provision makes it clear that
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
a criminal complaint seeking possession of the servant

quarter at the instance of company against the accused

was maintainable and in our opinion cognizance thereof

was rightly taken by the Magistrate but committed a grave

error in rejecting it on technical grounds, instead of

deciding it on merits.

24.Learned counsel for appellant has also placed reliance

on Section 621 of the Act, dealing with offences against

the Act to be cognizable only on complaint by Registrar,

share holder or government. To appreciate the arguments

in

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this regard, the said Section 621 of the Act is reproduced

hereinbelow:

“621. Offences against Act to be cognizable
only on complaint by Registrar, shareholder or
Government.

(1)No court shall take cognizance of any offence
against this Act, which is alleged to have been
committed by any company or any officer
thereof, except on the complaint in writing of
the Registrar, or of a shareholder of a
company, or of a person authorised by the
Central Government in that behalf:

Provided that nothing in this sub-section shall
apply to a prosecution by a company of any of its
officers:

Provided further that the court may take
cognizance of offence relating to issue and
transfer of securities and non-payment of dividend
on a complaint in writing by a person authorised
by the Securities Exchange Board of India.

(1A) Notwithstanding anything contained in the
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
Code of Criminal Procedure 1898 (5 of 1898), where
the complainant under sub-section (1) is the
Registrar or a person authorised by the Central
Government, the personal attendance of the
complainant before the Court trying the offence
shall not be necessary unless the Court for the
reasons to be recorded in writing requires his
personal attendance at the trial.

(2)Sub-section (1) shall not apply to any action
taken by the liquidator of a company in respect
of any offence alleged to have been committed
in respect of any of the matters included in
Part VII (sections 425 to 560) or in any other
provisions of this Act relating to the winding
up of the companies.

(3) A liquidator of a company shall not be deemed
to be an officer of the company, within the
meaning of sub-section (1).”
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25.However, it is not necessary to examine the

applicability of the aforesaid Section 621 of the Act to

the present case as it appears to be doubtful to

categorise accused No. 1, who was admittedly working as

caretaker, as an officer of the company. Thus, we deem

it fit and proper to leave the said question open at this

stage.

26.We have carefully examined the originals of the

resolution dated 31.12.2001 as also Power of Attorney of

the even date executed in favour of Mr. V.S. Parthasarthy

and the irresistible conclusion is that the same are

genuine and do not come under the cloud of suspicion at

all.

27.That being so, in the light of the admitted position
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
that accused No. 1 retired in the year 1992 and has also

given an undertaking to the Company as far as back as

5.1.2000 categorically admitting and agreeing to vacate

the premises on or before 31.1.2000, it was incumbent on

his part to honour the same.

28.The letter of the accused No. 1 dated 05.01.2000 is

reproduced herein below:-

“In regard to the above subject I the
undersigned would be grateful to you if you
would give me one month time till January 31st
2000 to vacate the premises that was given to me
while I was in service with your esteemed
organisation.”
Das John Peter

29. Even after taking into consideration all the defences

taken by accused, their eviction from the servant

quarter

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is inevitable. Since he has committed default of his own

promise, we have no other choice or option but to direct

the accused persons to vacate the premises by or before 1 st

October, 2010 and to hand over its peaceful vacant

possession to the Company.

30.We have done so exercising the powers conferred on us by

virtue of provisions of Article 142 of the Constitution

which cast a duty on us to do complete justice between

the parties.

31.It is clear from the impugned orders that there is

manifest illegality in the same and have resulted in
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
palpable injustice to the Appellant/Company curable at

this stage under Article 142 of the Constitution as the

aforesaid powers are inherent on this Court as guardian

of the Constitution.

32.According to us, no useful purpose would be served even

if the matter is remitted to Magistrate for trial on

merits. We hold so because equity also does not swing in

favour of the accused, who have displayed adamant and

dilatory attitude.

33.From the date of retirement of accused No. 1 till date,

more than 18 years have passed by and he has used the

servant quarter without having any right to do so. No

further mercy or sympathy can be shown to such an

accused.

34.Thus, looking to the matter from all angles we are of

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the considered opinion that the order passed by

Metropolitan Magistrate as also by the High Court cannot

be sustained in law. Same are hereby set aside and

quashed. This we have to do to give quietus to the

litigation which had commenced long years back.

35.Appellant’s complaint filed under section 630 of the Act

is hereby allowed and accused is granted time to vacate

the servant quarter as mentioned hereinabove on or before

1.10.2010 and to hand over its peaceful and vacant

possession to the appellant company. In default thereof
Crl.A. @ S.L.P.(Crl.)No.6204 of 2008
accused shall have to suffer imprisonment for a term of

one year and fine of Rs. 10,000/-. In default of payment

of fine, the accused shall suffer further imprisonment of

one month.

36.We hope and trust at least good sense shall prevail on

the accused and instead of running the risk of being sent

to jail, they would abide by the first part of the order

and do the needful. If the accused persons fail to do so

then the appellant shall be entitled to take police help

to get our order executed.

37.Appeal stands allowed accordingly.
………………….J.
[DALVEER BHANDARI]
New Delhi. ………………….J.
July 20, 2010 [DEEPAK VERMA]

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