Delhi District Court
Judgment In Texmaco vs . Gauri Shankar/Case No.149/1/Page No. ... on 19 November, 2009
[IN THE COURT OF DIG VINAY SINGH, ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE(SPL. ACTS):CENTRAL:TIS HAZARI COURTS, DELHI
In re:
TEXMACO ......COMPLAINANT
VS.
GAURI SHANKAR ...............ACCUSED
CASE NO.
U/S.630 of Companies Act, 1956
DATE OF RESERVATION OF JUDGMENT: 03.10.1009
DATE OF PRONOUNCEMENT OF JUDGMENT: 19.11.2009
JUDGMENT
(a) The serial no. of the case : 02401R5210982004
(b) The date of commission of offence : On and after 26.4.1984 and
continuously thereafter.
(c) The name of complainant : Texmaco Ltd., 508, Surya
Kiran Building, Kastoorba
Gandhi Marg, N. Delhi110001.
(d) The name, parentage, residence: Gauri Shankar s/o. Sh. Bhola
of accused. Ram, r/o.109, New Birla Lines,
PO Birla Lines, Kamla Nagar,
Delhi110007.
(e) The offence complained of/ proved : 630 of Companies Act, 1956
(f) The plea of accused : Pleaded not guilty.
(g) The final order : Convicted.
(h) The date of such order : 19.11.2009
(i) Brief statement of the reasons for the decision:
1. The complainant, M/s. Texmaco Ltd. filed the present complaint Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 1 of 35 dtd.19.11.2009/k u/s. 630 of the Companies Act, 1956 against the accused, alleging that the complainant company is duly incorporated under the said Act and the complainant company is the proprietor of Birla Textile Mill, located at Post Office Birla Lines, Kamla Nagar, Delhi. It claims that the complainant company has various employees and housing colonies such as Old Birla Lines, New Birla Lines, Roshanara Building (Shivaji Lines), Birla Lines Officer's Flats and Birla Flats, Khilona Wala Bagh etc. It claims that these housing colonies are located near the vicinity of the mill and they were allotted to employees for the greater convenience of the employees due to exigencies attached with their job and, so that the work of the mill is done effectively. It is also claimed that the complainant company acquired proprietary rights in respect of the mill, as well as, the housing colony vide a scheme of arrangement arrived at between the complainant company and M/s. Birla Cotton Spinning and Weaving Mills Ltd., vide orders of Hon'ble Delhi High Court dated 03.1.1983 in Company Petition No.59/1982. It is also claimed that pursuant to the said arrangement, all the agreements, more particularly, licence agreement entered between the erstwhile company with third parties are deemed to be entered between the complainant company and those third parties. The complainant company also acquired all the rights, titles, interest in the properties of the erstwhile company without any further act or deed and all the employees of the erstwhile company became the employees of the complainant company pursuant to the said scheme of arrangement.
2. It is further claimed that the accused joined the services of the Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 2 of 35 dtd.19.11.2009/k erstwhile company M/s. Birla Cotton Spinning and Weaving Mills Ltd., on 01.06.1968 and on his request, Quarter No. 109, New Birla Lines, PO Birla Lines, Kamla Nagar, Delhi, was allotted to him on 29.08.1977 vide allotment letter of even date.
3. It is further claimed that the accused ceased to be in services of Complainant Company from 26061984 and that in terms of orders of Hon'ble Supreme Court of India in Petition No.4677/1985, the working of the mill in Delhi was closed w.e.f. 30.11.1996 . It is claimed that therefore the accused was no more in the services of Complainant Company, but despite ceasor of his employment with the complainant company, the accused was withholding the said quarter, which is contrary to the licence allotment letter executed between the accused and the complainant company. It is claimed that Hon'ble Supreme Court in Writ Petition no.4677/1985 in IA No.36 vide order dated 04.12.1996 observed that the retiring workmen will be entitled to remain in the quarter for a period of 1½ years and those workers who opt to be relocated at the new site ( in this case at Baddi, Himachal Pradesh), will vacate the quarters at Delhi on being offered alternative accommodation at the new place of joining. Hon'ble Supreme Court in the same CWP in IA No.153 of 1997 vide order dated 19.2.2002 finally observed that the employees residing in the said quarters have no rights and the said IA no.153/1997 was dismissed by Hon'ble Supreme Court. The complainant claims that till today the accused is withholding the said quarter allotted to him on licence basis and thereby he commits offence u/s.630 of the Companies Act, 1956.
Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 3 of 35 dtd.19.11.2009/k
4. On the above complaint being filed, my Ld. Predecessor summoned the accused and thereafter a notice for the offence of section 630 Companies Act was served upon the accused in terms of Section 251 Cr.P.C to which the accused claimed trial.
5. In support of its case, complainant examined PW1 Radhey Shyam Sharma, who deposed that he is power of attorney holder of the complainant company and duly authorised to sign, verify the complaint and to depose in the present case vide resolution Ex. PW1/1 and power of attorney Ex. PW1/2. He also proved the certificate of incorporation Ex. PW1/3 and also deposed that the accused was allotted the said quarter vide allotment letter dated 21.08.1977 Ex. PW1/5 after he joined the services M/s. Birla Cotton Spinning and Weaving Mills Ltd. on 01.061968. He also proved order of Hon'ble Delhi High Court in Company Petition No.59/1982 dated 03.1.1983 vide which scheme of arrangement, all the rights, titles, interest, properties, assets and liabilities as well as the employees of the said erstwhile company M/s. Birla Cotton Spinning and Weaving Mills Ltd., became that of the complainant company. He further deposed that the accused ceased to be the employee of complainant company w.e.f. 26.06.1984.
6. After examination of PW1 and closing of prosecution evidence, all the incriminating evidence against the accused was put to the accused in his examination u/s.313 Cr.P.C read with section 281 Cr.P.C. In his statement, the accused expressed his ignorance about the resolution, Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 4 of 35 dtd.19.11.2009/k the power of attorney and, the certificate of incorporation of company proved by PW1 as Ex .PW1/1 to PW1/3. The accused claimed that the quarter was in fact given on rent to his father and thereafter he started paying rent to the company. The accused admitted the order dated 03.1.1983 Ex. PW1/4 vide which Texmaco acquired the erstwhile company. The accused did not deny his signatures on the allotment letter Ex. PW1/5 when it was put to him in his statement. In the cross examination of PW1 also it is nowhere suggested to PW1 that the allotment letter Ex. PW1/5 does not bear signatures of the accused. Thereby meaning that this document is admitted.
7. The accused also examined himself as DW1 in which he claimed that he is in possession of the flat in question since 1977 in his own rights and without interference of the complainant company. But no such suggestion was put to PW1. The accused admits in his defence evidence that the quarter was obtained by him on 29.8.1977 at Rs.3.75/ per month and he claims that his signatures were obtained by the complainant on certain printed papers at the time of his joining but he was not allowed to go through the papers. There is no suggestion put to PW1 about obtaining any such signatures on blank papers or printed papers, therefore, this is nothing but an afterthought. Although, the accused claims that he is a tenant but no rent agreement or rent receipt or any documents is produced to show that the property was given on Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 5 of 35 dtd.19.11.2009/k tenancy as a lessee and not licensee. The accused admitted that he had joined M/s. Birla Cotton Spinning and Weaving Mills Ltd. in 1968 and that he ceased to be in employment in 1984. During cross examination, the accused expressed his ignorance about the allotment letter regarding the fact whether any allotment was signed by him or not and he also expressed his ignorance about the terms and conditions on which the quarter was allotted to him.
8. Thus, there is no specific denial by the accused that he did no sign the allotment letter Ex. PW1/5 nor the terms and conditions of PW1/5 are denied. Rather in the cross examination, the accused admitted that licence fees (emphasis supplied) was deducted by the company from his salary and that after 1984, he had not even paid the licence fees. Accused claims that he did not pay the licence fee as it was not demanded. The accused also admitted in his cross examination that he would not have been allotted the quarter in question had he be not in service. He also admits that he did not vacate the quarter because of pendency of labour case, although he admits that he did not know whether the labour case is still pending or not as he did not attend or pursue the case for the last 34 years. The accused claims that the complainant did not disclose him that he will have to vacate the quarter upon termination of his services. Now this fact is contrary to Ex. PW1/5 in which it is clearly mentioned that the quarter was given to him on licence and that he will have to vacate the quarter on termination of his service.
Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 6 of 35 dtd.19.11.2009/k
9. I have perused the written arguments filed from both the sides and have perused the record.
10. Section 630 of the Companies Act, 1956 provides as under
"(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."
11. There is no denial of fact by the accused that the complainant company is registered under the Companies Act. There is also no denial of the fact that the accused was allotted the house in question by virtue of his employment, it is specifically admitted by the accused in Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 7 of 35 dtd.19.11.2009/k his deposition. In the defence evidence the accused also admits that the quarter in question was allotted to the accused by Birla Spinning and Weaving Mills. Therefore, this fact is very clear that the quarter in question was allotted to the accused by M/s. Birla Cotton Spinning and Weaving Mills Ltd. and there is a categorical admission by the accused that quarter was allotted to him by virtue of his employment with the company. There is no denial by the accused that he is still holding the said quarter till date.
12. IN, 1993 CRI. L. J. 2791 "K. G. K. Nair v. P. C. Juneja"
BOMBAY HIGH COURT It is held that, " The provisions of S. 630 are intended to provide speedy and efficacious redress in cases where company's property is wrongfully withheld and therefore the following guidelines are required to be observed :
(a) That the complaints be taken up and disposed of on a priority basis, the accent being on the avoidance of any unwarranted delay.
(b) That the trial Courts should address themselves to the fact that the scope of the enquiry in a proceeding under Section 630 is extremely restricted in law and, consequently, the parties be confined within those narrow ambits without being permitted to dilate or protract the proceeding through extraneous avenues.
(c) That no frivolous application for adjournment, stay of proceedings, etc., should be permitted by the trial Courts because the history of those proceedings indicate that each of such states is responsible for further Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 8 of 35 dtd.19.11.2009/k litigation and years of delay. The pendency of other civil proceedings is no bar to the decision of an application under S. 630 which fact should be taken cognizance of in such situations.
(d) That the appeal, i.e., Court of Session, in the first instance, must judiciously scrutinize and vigorously examine the revision applications and appeals before granting stay orders.
(e) That applications for discharge on frivolous and untenable pleas are required to be speedily and effectively disposed of and are not to be used as handles for protracting the litigation."
13. The accused in his statement and in his defence evidence claims that he is still in services of the company and that complainant company is not the owner of property in question and that he is a tenant in the quarter and not a licensee. The accused has not proved any document to show that he still continues to be in the services of the complainant company, nor the accused has proved any documentary proof to show that he was a tenant in the premises and not a licensee.
14. Next contention of the accused is that the present proceedings are barred by limitation u/s 468 of Cr. P.C. It is argued that the cause of action arose in favour of the complainant from 26th June 1984 but the proceedings were filed belatedly after many years. It is argued that a civil suit for mandatory injunction and declaration, filed by the complainant against the accused was although decreed by the learned civil judge, but the learned appellate court of Additional District Judge set aside the said decree Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 9 of 35 dtd.19.11.2009/k and observed that because of delay and latches the complainant was not entitled to the said relief in the said civil suit.
15. It is now settled law that the offence u/s 630 of the Companies Act of withholding the possession of the property is a continuing offence and therefore, the proceedings are not barred because of limitation and the object of the criminal proceedings cannot be allowed to be frustrated by a criminal court on flimsy ground.
16. Hon'ble Supreme Court in the case of Gokak Patel Volkart Ltd. v. D. G. Hiremath, (1991) 1 J.T. (SC) 376 : (1991 AIR SCW 505) was dealing with a group of cases from Karnataka and had occasion to interpret in detail another facet of Section 630 of the Companies Act and it would be useful to reproduce the observations of the Supreme Court in this regard (at p. 516 of AIR SCW) : "The expression 'continuing offence' has not been defined in the Code. The question whether a particular offence is a 'continuing offence' or not must, therefore, necessarily depend upon the language of the statute which creates that offence, the nature of the offence and the purpose intended to be achieved by constituting the particular act as an offence. .... Applying the law enunciated above to the provisions of Section 630 of the Companies Act, we are of the view that the offence under this Section is not such as can be said to have consumated once for all. Wrongful withholding, or wrongfully obtaining possession and wrongful application of the company's property, that is, for purposes other than Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 10 of 35 dtd.19.11.2009/k those expressed or directed in the articles of the company and authorised by the Companies Act, cannot be said to be terminated by a single act or fact but would subsist for the period until the property in the offender's possession is delivered up or refunded. It is an offence committed over a span of time and the last act of the offence will control the commencement of the period of limitation and need be alleged. The offence consists of a course of conduct arising from a singleness of thought, purpose of refusal to deliver up or refund which may be deemed a single impulse. Considered from another angle, it consists of a continuous series of acts which endures after the period of consummation on refusal to deliver up or refund the property. It is not an instantaneous offence and limitation begins with the cessation of the criminal act, i.e., with the delivering up or refund of the property. It will be a recurring or continuing offence until the wrongful possession, wrongful withholding or wrongful application is vacated or put an end to. The offence continues until the property wrongfully obtained or wrongfully withheld or knowingly misapplied is delivered up or refunded to the company. For failure to do so SubSection (2) prescribes the punishment. This, in our view, is sufficient ground for holding that the offence under Section 630 of the Companies Act is not one time but a continuing offence and the period of limitation must be computed accordingly, and when so done, the instant complaints could not be said to have been barred by limitation. The submission that when the first respondent upon his retirement failed to vacate and deliver Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 11 of 35 dtd.19.11.2009/k possession of the company's quarter to the company the offence must be taken to have been complete has, therefore, to be rejected."
"Section 472 of the Code of Criminal Procedure deals with continuing offence and says 'In the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues.'
17. It is next argued that the complainant company has no locus standi to file the present complaint since a company cannot be proprietor of another company and that it was M/S Birla Cotton Spinning and Weaving Mills Ltd. only which could have filed the present proceedings against the accused.
This argument is absolutely without any force. As mentioned above the present complainant company acquired all the property rights, interests etc. in the erstwhile company vide a scheme of arrangement passed by the Hon'ble Delhi High Court proved as Exhibit PW1/4. The accused has also not denied the scheme of arrangement Ex. PW1/4 and perusal of the said document reveals that on page 5 in the order of petition, it is specifically written as follows.
" a) 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 Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 12 of 35 dtd.19.11.2009/k company therein but subject nevertheless to all charges now affecting the same, and
b) 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 c ) That all proceedings now pending by or against the said transferor company be continued by or against the said transferee company; and
d) All contracts, deeds, bonds, agreements and instruments of whatever kind or nature relating to the said units of Birla Cotton 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.
18. Accordingly it is very clear that the complainant company became the owner of all the property, rights and powers of the transferee company without any further act or deed and the same stood transferred and vested with the complainant company for all the estate and interest. By virtue of the said scheme of arrangement, the complainant company became owner of the property in question and therefore the complainant company has every right to prosecute this complaint.
19. It is next argued that the accused is subjected to double jeopardy since civil proceedings were also availed by the complainant against the accused, which failed in first appeal and second appeal is pending before Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 13 of 35 dtd.19.11.2009/k Hon Delhi High Court.
20. This contention is absolutely baseless. In order to attract the provisions of double jeopardy, as provided in section 300 of Criminal Procedure Code, the earlier proceedings ought to have been of criminal nature. Civil remedy and criminal remedy are two different things. Merely because earlier some civil remedy was availed by the complainant, it does not mean that the complainant cannot resort to the criminal proceedings if the requirements of criminal offence are satisfied. Here it would be pertinent to mention that before the learned civil judge court, the complainant succeeded in securing a decree of permanent injunction and declaration, but the said judgment was set aside by the first appellate court.
Against the judgment of first appellate court second appeal is pending, admittedly. Perusal of the judgment dated 3/1/2005 of learned first appellate court would reveal that it is specifically observed by the civil court that the accused was a licensee in the premises in question and not a tenant or lessee. It is specifically mentioned in page 9 and 10 of the judgment that the relationship between the accused and the complainant was that of licensor and licensee and not that of landlord and tenant. That first appeal of the accused before the first appellate court succeeded merely on the ground of delay and nothing else. There is no bar regarding the present criminal proceedings under section 630 of the Companies Act which are absolutely separate and distinct proceedings. Accordingly even this contention of the accused fails.
21. Similarly the next contention of the accused that, the present Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 14 of 35 dtd.19.11.2009/k proceedings is Quasi civil and Quasi criminal in nature, and that therefore civil procedure code would apply or that the principles of resjudicata or res subjudice would apply is absolutely without any force. The contention that the finding of the civil court is binding upon the criminal court is also of no help to the accused in the present case as it was not observed by the civil court that the accused was a tenant. Rather it is observed that the accused is a licensee in the premises. So far as the decision of delay as observed by the learned civil court is concerned, I have already mentioned that regarding proceedings u/s 630 Companies Act, there is a clear judgment of honorable Supreme Court that such offences are continuing offence and no limitation applies.
22. The next contention raised by the accused is that the power of Attorney in favour of the complainant is defective as it does not comply with the provisions of the power of attorney Act, nor it complies with the provisions of the Notaries Act. It is also argued that the resolution regarding the power of attorney in favour of the complainant has not been proved and that the complainant is stranger to the company and that therefore no resolution could have been passed in favour of the complainant.
23. Again all these contentions are without any force. Section 85 of the Indian Evidence Act clearly provides that once there is a duly notarized power of attorney than it shall be presumed to be true, unless the contrary is proved. It is noticed that the power of attorney on record is perfectly and legally notarized and it fulfils all the ingredients of section 85 Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 15 of 35 dtd.19.11.2009/k of the Indian Evidence Act. The accused has not produced any evidence to disprove the power of attorney of the company.
24. In the case of Jugraj Singh v. Jaswant Singh AIR 1971 SUPREME COURT 761 before a three judge bench of hon'ble Supreme court it was argued that S. 85 of the Indian Evidence Act which provides that a Court shall presume that every document purporting to be a power of attorney and to have been executed before and authenticated by a Notary Public was duly executed and authenticated. It was contended that authentication of the power of attorney had to be in a particular form, and that it was not sufficient that a witness should have signed the document, be he a Notary Public or any other. It ought to have been signed by the persons named in S. 85 and should have been authenticated properly. It was argued that the authentication should have shown on its face that the Notary Public had satisfied himself that executor was the real person who had signed the power of attorney before him and the power of attorney was invalid, because it did not show on its face that the Notary Public had satisfied himself that it was Mr. X who executed the document.
It was held that the power of attorney does show that it was executed before a Proper Notary Public who complied with the laws of California and authenticated the document as required by that law. SC was also satisfied that that Power of attorney is also duly authenticated in accordance with our laws. The only complaint is that the Notary Public did not say in his endorsement that Mr. X had been identified to his Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 16 of 35 dtd.19.11.2009/k satisfaction. It was held that "But that flows from the fact that he endorsed on the document that it had been subscribed and sworn before him. There is a presumption of regularity of official acts and we are satisfied that he must have satisfied himself in the discharge of his duties that the person who was executing it was the proper person." It was held that the power of attorney was a valid document.
25. In the case of M/s. Northland Traders and others v. Bank of Baroda AIR 1994 ALLAHABAD 381 it is observed as follows:
" 11. Under the aforesaid provisions, it would also be presumed that the person executing the power of attorney on behalf of a corporate body was competent to do so. In the present case Sri M.K. Bose had executed the power of attorney in favour of K.N. Pandey which was duly authenticated by a notary public as mentioned in Section 85. The Court is, therefore, bound to presume that the power of attorney was duly executed and authenticated. This presumption, however, is a rebuttable presumption and it was open to the defendants to challenge the authority of the attorney or to prove that the power of attorney was invalid or that the person acting on the basis of such power of attorney was not duly authorised. No such evidence has come from the side of the defendants. On the contrary PW. 1 K.N. Pandey had deposed that (sic)the Senior Branch Manager and was authorised to sign and verify the plaint and to file the suit. There being no evidence in rebuttal the court below was, therefore, justified in holding that K.N. Pandey was authorised to sign and Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 17 of 35 dtd.19.11.2009/k verify the plaint."
26. In the case of Smt. Kulsumunnisa, Appellant v. Smt. Ahmadi Begum and others, Respondents. AIR 1972 ALLAHABAD 219 (V. 59 C
58) ( Division Bench ) it is held, that a Power of attorney along with verifications are to be presumed to be true u/S.85. also see Yogesh Singh Sahota, Petitioner v. Niranjan Lal Gupta, Respondent. AIR 1981 DELHI 222 .
27. In the case of Kamla Rani and Ors. v. M/s. Texmaco Ltd. AIR 2007 DELHI 147 which was a case of this very complainant on the same facts , i.e. company named M/s. Birla Cotton Spinning and Weaving Mills Ltd. filed eviction petitions invoking Section 14(1)(i) and Section 22 of the Delhi Rent Control Act, 1958 alleging that the premises in question were allotted to the respondent (predecessorininterest of some respondents) for residential purposes as a service tenant exclusively by virtue of their being in the service and employment of the said company. It was a term of allotment that within 4 days of superannuation or cessation of employment, vacant possession would be redelivered to the company. In spite of cessation of employment, vacant possession was not handed over. Under a scheme of arrangement sanctioned by Hon'ble Delhi High Court , the entire assets of M/s. Birla Cotton Spinning and Weaving Mills Ltd. stood transferred to M/s. Texmaco Ltd. and therefore said company was the successorininterest of M/s. Birla Cotton Spinning and Weaving Mills Ltd. The defence set up in all the petitions was that allotment was not due to the Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 18 of 35 dtd.19.11.2009/k allottee being an employee of M/s. Birla Cotton Spinning and Weaving Mills Ltd. That the allottee was tenant independent of his status as employee of the company. That the eviction petitions were not filed under a proper authorisation. That M/s. Texmaco Ltd. was not successorininterest of M/s. Birla Cotton Spinning and Weaving Mills Ltd. Learned Addl. Rent Controller held that authority of Shri P. C. Chhajer was not established to file the eviction petitions. It was observed that it shows that the learned trial Court has been influenced by the fact that the Executive Director of the company who had executed the power of attorney in favour of Shri P. C. Chajjer pursuant to the board resolution dated 1071978 whereunder it was resolved that Shri P. C. Chajjer be authorised to file the eviction petitions and sign the petition and verify the pleadings had not appeared in the witness box and notwithstanding that the power of attorney was duly notarised, the notary public was also not examined. Thus, it was held that recourse could not be had to Section 85 of the Indian Evidence Act, 1872. In WP (C) No. 4677/1985 reported in 1992 (2) SCC (Suppl) 86 M. C. Mehta v. Union of India the Supreme Court directed closure of the mill on account of the reason that Master Plan for Delhi did not permit the industrial user in question. The mill was required to shift out of Delhi. Under orders of the Supreme Court 68% of the land had to be handed over to DDA and the remaining 32% vested in the company. The scheme of transfer of M/s. Birla Cotton Spinning and Weaving Mills Ltd. and M/s. Texmaco Ltd. as approved by Hon'ble Mr. Justice H. L. Anand of this Court was duly proved. Certified copies of the scheme of arrangement and orders passed Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 19 of 35 dtd.19.11.2009/k by this Court were proved and were given exhibit marks.
A two fold contention was urged before HC. Firstly, that the structures in question fell on the part of the land which had to be handed over to DDA and therefore Texmaco Limited was not the owner thereof and hence could not maintain the evidence petition. Second point urged was that since the Executive Director of the company who executed the power of attorney in favour of the employee who had signed and verified the petition as also instituted the eviction petition was not produced as a witness, therefore the power of attorney which was relied upon as constituting the authorisation remained an unproved document.
It was held by Hon'ble High Court as follows:
" 24. On the first issue raised, suffice would it be to note that eviction as finally pressed was under Section 14(1)(i) of the Delhi Rent Control Act, 1959. The legislative provision is that where the premises were let out to a tenant for use as a residence by reason of his being in the service or employment of the landlord, service or employment ceasing, entitles the landlord to a decree for ejectment.
25. Ownership is not relevant for the reason a person may be a landlord without being an owner.
26. A company may take a premises on a 30 year lease from the owner with a permission to induct its employee as a tenant/subtenant. Such an employee to whom the said permission is allotted would be a tenant under his company and the allotment would be pursuant to his Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 20 of 35 dtd.19.11.2009/k employment. Such an allottee cannot resist the eviction, if otherwise grounds are made out.
27. Even otherwise, under the directions of the Supreme Court, 68% land had to be handed over to DDA for being maintained as open area. DDA has not become the owner of the said land. Ownership would vest in DDA when possession is handed over.
28. It would be the obligation of the company to evict its tenants including heirs of the tenants and hand over possession to DDA.
29. But, I rest my decision on firmer grounds. A tenant who accepts a person as his landlord is estopped from questioning the title of his landlord.
30. The petitioners are therefore estopped from questioning the title of M/s. Texmaco Ltd. for the reason either they or their predecessorininterest were inducted as a tenant by the predecessorin interest of M/s. Texmaco Ltd.
31. On the second issue raised, namely, authority of the person who has signed and instituted the eviction petition, the controversy between the parties stood resolved by the Tribunal in the context of Section 85 of the Indian Evidence Act, 1872.
32. It is not in dispute that the notarised power of attorney in favour of the person who had signed and verified the eviction petition as also who had filed the same was produced at the trial and copy thereof Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 21 of 35 dtd.19.11.2009/k was assigned an exhibit mark. The only question which arises for consideration is, whether in absence of the notary public being produced as a witness or the executant thereof being not produced as a witness to prove the same, was the document proved as per law.
33. Authentication by a notary public is a solemn act performed by the notary public whose duty is to ensure that the executant is the person before him and is identified to his satisfaction. Once a document is authenticated by a notary public, it will be presumed that the document was duly executed and was in order. The use of the expression 'shall presume' shows that the section is mandatory and the Court has to presume that all necessary requirements for the proper execution of the power of attorney were duly fulfilled before the notary public. As observed in AIR 1984 (363) (sic) M/s. E. C. and E.Co. Ltd. v. M/s. J. E. Works, if two conditions are satisfied, firstly the power of attorney being executed before a notary public and secondly it being authenticated by a notary public, a presumption would arise under Section 85 about the executant of the power of attorney.
34. Onus would thus lie on the opposite party to prove to the contrary.
35. It is well settled that authentication would mean more than mere execution. Where proof of authentication surfaces, benefit of Section 85 has to be granted.
36. No negative evidence has been brought on record, Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 22 of 35 dtd.19.11.2009/k none has been shown to me by the petitioners.
37. The purpose of Section 85 of the Evidence Act appears to be that a duly executed and authenticated power of attorney can be proved under Section 85 without undue expenses to be incurred by producing the executant thereof or the original board resolution.
38. The reason is obvious. Banks, insurance companies and multinational companies empower officers to institute and file suits on their behalf. Large number of suits are filed by these organisations. If the original board resolution or the executant of the power of attorney has to submit itself/himself before the Court as a sine qua non to prove the power of attorney, practical difficulties would arise and unnecessary expenses would be incurred by the organizations to prove the document in the aforenoted manner.
39. I am in full agreement with the view taken by the learned Rent Control Tribunal that the authority of the person who had signed and verified the petition as also instituted the eviction petition stood duly proved by means of production of the authenticated and notarised power of attorney bearing the seal of the notary public.
40. Decision of the Supreme Court reported as AIR 1997 SC 3 Union Bank of India v. Naresh Kumar is additionally relied upon by me. The said decision states that where a suit has been filed on behalf of a corporate body and is duly prosecuted by the person who had filed the suit, a presumption would arise that the person concerned was authorised Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 23 of 35 dtd.19.11.2009/k to do so."
28. In the case of Citibank N.A., New Delhi, Plaintiff v. Juggilal Kamlapat Jute Mills Co. Ltd., Kanpur, Defendant. AIR 1982 DELHI 487 it was held Execution of power of attorney by a Bank's Executive Officer and Cashier delegating certain powers to one employee of that Bank. Document bearing Bank's seal and attested by Notary Public. Presumption that power of attorney is executed by the Bank arises. Presumption that the officers executing the document had authority to execute it on behalf of the Bank also arises Word "person" in Section 85 includes legal person Presumption arising under Section 85 is rebuttable.
(Paras 17, 18, 19, 20, 22, 28)
29. It is next argued that the order of honorable Delhi High Court dated 3rd January 1983 regarding the scheme of arrangement is not binding on the accused since they were not party to it. Whether the accused was a party to the said proceedings or not is immaterial. The judgment of honorable Delhi High Court is indeed binding and it was also relied upon in the case of Kamla Rani,s case as mentioned above. Similarly the contention that the property in question does not found part of the said scheme is baseless for the said reason.
30. It is next argued that the certificate of incorporation, consequent upon change of name of company cannot be taken as an admissible reverence. This contention is against section 35 of The Companies Act 1956, which clearly provides that a certificate of incorporation given by the registrar in respect of any association shall be conclusive evidence that all the Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 24 of 35 dtd.19.11.2009/k requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto and that the association is a company authorised to be registered and duly registered under this Act.
31. The next contention raised by the accused is that the mandatory directions mentioned in the order dated 3rd January 1983 by honorable Delhi High Court has not been complied with by the complainant as the necessary proceedings before Calcutta High Court has not been conducted. This is factually incorrect statement. In this very court there are a large number of cases filed by the complainant and in various files the compliance of the said the condition has been proved by the complainant.
32. The next contention raised by the accused is that the application for allotment of any house has not been proved. Whether the quarter in question was allotted to the accused on his application or without his application is immaterial for decision in the present proceedings and all that is required to be proved in this case is that the accused was allotted the quarter in question by virtue of his employment with the company. There is no denial of the fact that the quarter in question was allotted to the accused by the company solely on the ground that the accused was an employee of the company and therefore the accused is a licensee and there was no need to prove application for allotment given by the accused.
33. The next contention raised is that the accused is a tenant and not a licensee. I have already mentioned above that the contents of the allotment letter clearly stipulates that the accused is a licensee and not a tenant. Even otherwise learned civil court has already come to a conclusion that indeed Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 25 of 35 dtd.19.11.2009/k the accused was a licensee and not a tenant. No rent agreement has been proved by the accused in his favour to show that he was a tenant. The conditions mentioned in the exhibit PW1/5 indeed reveals that the accused was a licensee.
34. It is next argued that even if the accused is taken to be a licensee still no notice of termination has been given to him and therefore he cannot be prosecuted. Again this contention is misfounded. Under section 630 of The Companies Act 1956 there is no requirement of law to give any notice of termination of licence or even any notice separately regarding termination of the services. The fact that the property is given to an employee by virtue of his being in employment of a company which he wrongfully withholds is sufficient to bring the case within the ambit of section 630 of The Companies Act 1956.
35. The next contention raised by the accused is that the accused is still in the employment of the complainant company. Again this contention is misfounded. The accused has not proved anything to show that he is still in employment of the complainant. Although the accused in his evidence claimed that he has filed a labour case but he admitted that he is not pursuing his labour case for last few years and he is not even aware as to the outcome of the said labour dispute. In such circumstances there is nothing to prove that the accused is still in the services of the complainant company.
36. The next contention raised is that even if the accused is found guilty he cannot be asked to vacate the premises since there is no provision in Criminal Procedure Code or in the Indian Penal Code for such a Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 26 of 35 dtd.19.11.2009/k punishment. This argument is again absolutely misconceived. The present proceedings are under section 630 of The Companies Act 1956 and not under Indian Penal Code or any other statute. Section 630 of The Companies Act 1956 clearly provides that an order to vacate the property can indeed be passed.
37. It is next contended that there is non compliance of mandatory requirements of section 200 of the Criminal Procedure Code. The accused claims that the complainant was not examined in pre summoning evidence and therefore the whole proceeding gets vitiated. Again this contention is absolutely misconceived and contrary to records. The perusal of record reveals that the complainant was examined in pre summoning evidence and only thereafter the accused was summoned. The present proceedings are summons triable complaint cases and the sec 200 Cr. P.C. was indeed complied with. In view of this fact, the judgments relied upon by the accused on this point or not applicable in the facts of the present case.
38. It is argued that the accused is not a trespasser and he becomes owner of the property by way of adverse possession therefore he cannot be prosecuted. I've already mentioned above that the accused is a licensee and the quarter in question was given to the accused by virtue of his being in employment with the complainant company and upon termination of his employment with the complainant company the accused is liable to return the quarter. The question of adverse possession does not come into picture since it is the continuing offence as discussed above and the proceedings under section 630 of The Companies Act 1956 is indeed maintainable Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 27 of 35 dtd.19.11.2009/k in view of the judgment of honorable Supreme Court as discussed above. In such circumstances none of the contention raised by the accused gives any help to him.
39. It is lastly argued that the complainant is not the owner of the premises and thus cannot maintain these proceedings.
40. It would be relevant to note of what is stated in Section 116 of the Evidence Act. The same reads as follows:
"Estoppel of tenant; and of licensee of person in possession No tenant of immoveable property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immoveable property; and no person who came upon any immoveable property by the licence of the person in possession thereof, shall be permitted to deny that such person had a title to such possession at the time when such licence was given."
41. In the case of Bilas Kunwar v. Desraj Ranjit Singh, (AIR 1915 Privy Council at p. 98), the Privy Council observed as follows :
"A tenant who has been let into possession cannot deny his landlords title, however, defective it may be, so long as he has not openly restored possession by surrender to his landlord." (Emphasis supplied).
42. In the case of Bansraj Laltaprasad Mishra v. Stanley Parker Jones AIR 2006 SUPREME COURT 3569 = 2006 AIR SCW 1073 it is observed as follows :
Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 28 of 35 dtd.19.11.2009/k " 14. The "possession" in the instant case relates to second limb of the Section. It is couched in negative terms and mandates that a person who comes upon any immoveable property by the license of the person in possession thereof, shall not be permitted to deny that such person had title to such possession at the time when such license was given.
15. The underlying policy of Section 116 is that where a person has been brought into possession as a tenant by the landlord and if that tenant is permitted to question the title of the landlord at the time of the settlement then that will give rise to extreme confusion in the matter of relationship of the landlord and tenant and so the equitable principle of estoppel has been incorporated by the legislature in the said section.
16. The principle of estoppel arising from the Contract of tenancy is based upon a healthy and salutory principle of law and justice that a tenant who could not have got possession but for his contract of tenancy admitting the right of the landlord should not be allowed to launch his landlord in some inequitable situation taking undue advantage of the possession that he got and any probable defect in the title of his landlord.
It is on account of such a contract of tenancy and as a result of the tenant's entry into possession on the admission of the landlord's title that the principle of estoppel is attracted.
17. Section 116 enumerates the principle of estoppel which is merely an extension of the principle that no person is allowed to approbate and reprobate at the same time.
Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 29 of 35 dtd.19.11.2009/k
18. As laid down by the Privy Council in Krishna Prasad Lal v. Barabani Coal Concern Ltd. (AIR 1937 P.C. 251), "It (Sec. 116) deals with one cardinal and simple estoppel and states it first as applicable between landlord and tenant and then as between licensor and licensee, a distinction which corresponds to that between the parties to an action for rent and the parties to an action for use and occupation".To the same effect is judgment in Sheikh Noor and another v. Sheikh G. S. Ibrahim (dead) by LRs AIR 2003 SUPREME COURT 4163= 2003 AIR SCW 3784.
43. In the case of S. K. Sarma v. Mahesh Kumar Verma AIR 2002 SUPREME COURT 3294 = 2002 AIR SCW 3827 the case pertained to Section 138 of the Railways Act which is some what similar to section 630 of the Companies Act and which provides a Procedure for summary delivery to railway administration of property detained by a railway servant. It was observed as follows:
"The object of the aforesaid Section is to provide speedy summary procedure for taking back the railway property detained by the railway servant or his legal representative. Properties include not only dwelling house, office or other building but also books, papers and any other matters. This would mean that the Section embraces in its sphere all unlawful detention of any railway property by the railway servant. Further, from the afore quoted second ingredient, it is clear that a railway servant who is discharged or suspended from his office, dies, absconds or absents himself would include a railway employee who is removed, retires or Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 30 of 35 dtd.19.11.2009/k dismissed from service. In context, the words 'discharge, dies, absconds or abstains himself' would certainly include employees who retire at the age of superannuation. The word 'discharge' used in context is of widest amplitude and would include cessation of relationship of employer and employee, may be by retirement, resignation, dismissal or removal. This Court in Union of India v. B.N. Prasad [(1978) 2 SCC 462] considered Section 138 and held that a close perusal of the section clearly reveals that the provision has widest amplitude and takes within its fold not only a railway servant but even a contractor who is engaged for performing services to the railway, and the termination of his contract by the Railway amounts to his discharge, as mentioned in Section 138. The Court also observed that the said provision is in public interest and must be construed liberally, broadly and meaningfully so as to advance the object sought to be achieved by the Railways Act.............."
It was also observed that, " 13. Further, the contention of the learned senior counsel for the respondent that the railway administration has to prove that the property in question was belonging to it before invoking Section 138 is totally misconceived because once it is admitted that respondent was given possession of the premises in question by order dated 1711967 as he was entitled for the same while working as CPRO of the Department, he could not be permitted to deny the title of the railway administration. Admittedly, respondent was inducted because he was in railway service.
Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 31 of 35 dtd.19.11.2009/k Now, he is estopped from challenging the title of the appellant over the premises in question. For this purpose, we would refer to Section 116 of the Evidence Act....."
"14. Second part of the aforesaid section clearly provides that no person who came upon any immovable property by the license of the person in possession thereof shall be permitted to deny the title to such person to such possession of the property. He cannot deny the same during the pendency of such license or sublease. Such estoppel continues to operate so long as licensee or subtenant has not openly restored possession by surrender to such person. This rule of estoppel would cease to operate only after such licensee or subtenant has been evicted. This position does not require reference to many judgments. However, we would refer to the decision in S. Thangappan v. P. Padmavathy [(1999) 7 SCC 474] in which the appellant tenant who was running an automobile workshop since 1962 disputed the title of respondentlandlady on the ground that certain Devasthanam was the actual landlord. This Court held that Section 116 of the Evidence Act, 1872 puts an embargo on a tenant of an immovable property, during the continuance of his tenancy to deny the title of his landlord at the beginning of his tenancy. The significant words under it are 'at the beginning the tenancy'. So a tenant once inducted as a tenant by a landlord, later cannot deny his landlord's title. However, defective the title of such landlord may be, such tenant Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 32 of 35 dtd.19.11.2009/k cannot deny his title."
It was also held that "16. In this view of the matter, respondent cannot be permitted to contend that property was not belonging to the railway administration. Whether the railway administration is owner, mortgagee, lessee or licensee is not required to be decided in such proceedings at the instances of sublessee or licensee of railway administration."
44. In the case of Vashu Deo v. Balkishan [(2002) 2 SCC 50]= AIR 2002 SC 569 : 2002 AIR SCW 152 it is held thus: ".... Section 116 of the Evidence Act, which codifies the common law rule of estoppel between landlord and tenant, provides that no tenant of immovable property or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the landlord of such tenant had at the beginning of the tenancy, a title to such immovable property. The rule of estoppel so enacted has three main features; (i) the tenant is estopped from disputing the title of his landlord over the tenancy premises at the beginning of the tenancy; (ii) such estoppel continues to operate so long as the tenancy continues and unless the tenant has surrendered possession to the landlord; and (iii) Section 116 of the Evidence Act is not the whole law of estoppel between the landlord and tenant. The principles emerging from Section 116 can be extended in their application and also suitably adapted to suit the requirement of an individual case........ "
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45. In the case of Kamla Rani and Ors. v. M/s. Texmaco Ltd. (Supra) it was held as follows:
" 25. Ownership is not relevant for the reason a person may be a landlord without being an owner.
26. A company may take a premises on a 30 year lease from the owner with a permission to induct its employee as a tenant/subtenant. Such an employee to whom the said permission is allotted would be a tenant under his company and the allotment would be pursuant to his employment. Such an allottee cannot resist the eviction, if otherwise grounds are made out.
27. Even otherwise, under the directions of the Supreme Court, 68% land had to be handed over to DDA for being maintained as open area. DDA has not become the owner of the said land. Ownership would vest in DDA when possession is handed over.
28. It would be the obligation of the company to evict its tenants including heirs of the tenants and hand over possession to DDA.
29. But, I rest my decision on firmer grounds. A tenant who accepts a person as his landlord is estopped from questioning the title of his landlord.
30. The petitioners are therefore estopped from questioning the title of M/s. Texmaco Ltd. for the reason either they or their predecessorininterest were inducted as a tenant by the predecessorin Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 34 of 35 dtd.19.11.2009/k interest of M/s. Texmaco Ltd."
46. It is settled law that the scope of inquiry in a proceedings u/s 630 is extremely restricted in law and the case is to be confined within those narrow ambit's without permitting any delay. The provision contained in Section 630 has been purposely enacted by the legislature with the object of providing a summary procedure for retrieving the property of the company. It is the duty of the Court to place a broad and liberal construction on the provision in furtherance of the object and purpose of the legislation which would suppress the mischief and advance the remedy. In Atul Mathur v. Atul Kalra and another, 1989 (4) SCC 514, it was held that the purpose of enacting Section 630 is to provide speedy relief to a company when its property is wrongfully obtained or wrongfully withheld by an employee or an exemployee.
47. Accordingly the complainant has succeeded in proving its case against the accused beyond reasonable doubt and the accused is found guilty and thus convicted for the offence u/s 630 of The Companies Act 1956.
ANNOUNCED IN OPEN COURT ON 19th NOVEMBER, 2009 (DIG VINAY SINGH) ADDITIONAL CHIEF METROPOLITAN MAGISTRATE SPECIAL ACTS, CENTRAL, TIS HAZARI COURTS DELHI Judgment in Texmaco Vs. Gauri Shankar/Case No.149/1/Page no. 35 of 35 dtd.19.11.2009/k