Delhi District Court
Kusum Lata Wife Of Late Sh. Bhure Lal vs M/S. Texmaco Limited on 6 January, 2011
IN THE COURT OF SH. R.K.GAUBA, ADDL. SESSIONS
JUDGE 01 (CENTRAL): DELHI
(1)Criminal Appeal No. 24/10
ID No.: 02401R0394802010
(2)Criminal Appeal No. 34/10
ID No.: 02401R0506852010
Kusum Lata wife of late Sh. Bhure Lal,
R/o 90B, Shivaji Lane, Shakti Nagar,
Delhi - 110 007. ...Appellant.
Versus
M/s. Texmaco Limited
through its Chairperson
Birla Lines, Shakti Nagar,
Delhi. ...Respondent.
Instituted on: 01.09.2010 & 09.11.2010 respectively.
Judgment reserved on: 24.12.2010
Judgment pronounced on: 06.01.2011
J U D G M E N T
1. These criminal appeals challenge the legality and correctness of the judgment dated 28.07.2010 and the order on sentence dated 03.08.2010 passed by Shri Dig Vinay Singh, Addl. Chief Metropolitan Magistrate (Special Acts), Central District Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 1 of 17 (hereinafter, "the ACMM") in criminal case No. 953/3 of 2009 arising out of a criminal complaint dated 17.11.1995 presented by M/s. Texmaco Limited ("the Respondent") referring to offences under Sections 441/406/408 IPC read with Section 630 of the Companies Act, 1956, basically alleging that Mr. Bhure Lal, husband of the appellant having been allotted servant quarter number 90B, Shivaji Lane, Shakti Nagar, Delhi in course, and by virtue, of his employment in M/s. Birla Cotton Spinning and Weaving Mills Limited ("BCSWML"), the predecessor in interest of the complainant, and his services having come to an end in Sept. 1985, his legal heirs including the appellant (widow) had continued to be in possession of the premises in question and in spite of several requests, had not surrendered the said premises and thus were illegally and unauthorisedly retaining the possession of the property belonging to the complainant Company.
2. The appellant was arrayed as an accused in the said criminal complaint on which cognizance was taken by the Court of the ACMM and process issued on 06.07.1996, whereby the appellant stood summoned as an accused. It may be added here that three children of the appellant and late Mr. Bhure Lal were also impleaded as accused no.2 to 4 but the proceedings were Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 2 of 17 subsequently dropped against them on it being reported that they are no longer residing in the premises in question. It was clarified by the ACMM vide order dated 23.1.2010 that proceedings were to continue against appellant only, then on account of she continuing to hold on to the property in question.
3. After the presence of the appellant had been secured, the trial of the case commenced on 07.11.1996 when notice was served on the appellant under Section 251 Cr.P.C. restricting the proceedings to trial for offence under Section 630 of the Companies Act to which she pleaded not guilty.
4. The complainant led evidence at the end of which the statement of the appellant was recorded under Section 313 Cr.P.C. on 24.07.2004. In her statement, the appellant admitted the evidence of the complainant to the effect that her husband late Mr. Bhure Lal had joined the services of BCSWML on 13.07.1951 and that during, and by virtue of the said employment, he was allotted the residential quarter in question vide letter of allotment Ex. PW 3/5. She, however, denied that as per the terms of allotment her husband was required to vacate the premises at the cessation of his said service. She claimed ignorance about the evidence that her husband had ceased to be employee with effect from Sept. 1985. She Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 3 of 17 claimed a case was pending in the labour court. She denied the evidence that she was required to hand over the vacant possession of the premises after the death of Mr. Bhure Lal. She further denied the evidence about the scheme of arrangement respecting BCSWML and the complainant company, as approved by Hon'ble High Court vide order Ex. PW 3/4. She claimed that she was living as a tenant in premises in dispute adding that she has no other place to live.
5. The appellant on 24.07.2004 sought an opportunity to lead evidence, which was granted. At this stage, two witnesses were examined, viz. Mr. Sohan Lal as DW1 on 27.10.2004 Mr. Mahipal Singh as DW2 on 22.09.2005.
6. The subsequent proceedings show that though opportunity was sought no further evidence in defence was produced. Ld. ACMM vide his order dated 09.03.2006 closed the defence evidence, thereafter taking the case to the stage of final arguments. At this stage, the case got derailed on account of absence from appearance of one or the other accused. Written arguments came to be filed in Jan. 2008. Later, an application came to be filed under Section 311 Cr.P.C. which was declined by the ACMM on 08.07.2008. The matter kept hanging fire at the same stage till final arguments were Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 4 of 17 advanced on 21.07.2010 and 28.07.2010 and thereafter the judgment was passed followed by the order on sentence which have been impugned in this criminal appeal.
7. Vide the impugned judgment, the appellant was found guilty and convicted for the offence under Section 630 of the Companies Act. Vide the order on sentence, the Ld. ACMM awarded fine of Rs.37,200/, calculating it @ Rs.200/ per month for a period of 186 months (15 years and 6 months), representing the period of unauthorised occupation since February 1995. In case of default in the payment of fine, the appellant was directed to undergo simple imprisonment for six months. Vide the said order, the appellant was further directed to handover the vacant possession of the property in question to the appellant Company on or before 02.09.2010 and in case of failure to do so, to undergo simple imprisonment for a period of two years.
8. The appeal has been resisted by the respondent (complainant Company).
9. I have heard Shri Kailash Bindal, Advocate for the appellant and Shri J.V. Rana, Advocate for the respondent. I have been taken through the record by both sides in the course of the arguments.
10.The complainant proved its case, mainly through PW2 Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 5 of 17 Mr.Pradeep Sharma and PW 3/4 Mr. R.S. Sharma, an Attorney duly constituted for the purpose on behalf of the complainant Company. The authorisation in favour of the said witness PW 3/4 flows from the Power of Attorney Ex.PW3/2, which was issued in the wake of resolution adopted by the Board of Directors of the complainant Company on 05.05.2003, as per extract proved vide Ex.PW3/1. Both the said documents were proved after production of the originals in the course of the statement of PW3.
11.The argument of the appellant is that the Power of Attorney has not been legally proved since the original minutes book/resolution was not produced. Reliance is placed on Escorts Ltd. V. Sai Autos & Others [1991 (Vol. 72) Company Cases 483 (Delhi)]. The argument is devoid of substance as original documents were produced as mentioned above.
12.It is further argued that the document has not been formally proved since the Notary Public was not examined. Reference is made in this context to Kamla Rani & Ors. Versus Texmaco Ltd. [139 (2007) Delhi Law Times 61]. The argument does not cut any ice as Section 85 of the Indian Evidence Act provides for a presumption that every document purporting to be a Power of Attorney and to have been executed before, or authenticated by, a Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 6 of 17 Notary Public was so executed and authenticated. There is no evidence or material shown to rebut that presumption.
13. It is next argued that the attorney could not appear in place of the principal, in the witness box. In this context, reliance is placed on Janki Vashdeo Bhojwani Versus Indusind Bank Ltd. [2005 Supreme Appeals Reporter (Civil) 103]. I am afraid the fact situation is distinguishable, in that, unlike in the case cited, complainant herein is not a natural person but a Company, a juristic person, which cannot act but through its authorised representative or attorney.
14.It was further submitted on behalf of the appellant that there is no legal relationship between the appellant on one hand and the respondent/complainant on the other, in as much as, per, the submissions of the appellant, the complainant is in the position of a "trespasser". It was submitted that scheme of arrangement approved by the Hon'ble High Court (under the cover of which the complainant is claiming ownership of the premises in question) does not bind the appellant as she or her late husband were not a party thereto; does not transfer the title from the erstwhile employer of the late husband of the appellant unto the respondent/complainant, also because the respondent company Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 7 of 17 never offered any alternative employment to the husband of appellant nor gave any terminal benefits to him/her; and further, because the condition in the order of Hon'ble High Court (approving the scheme of arrangement) requiring the said document to be deposited with the Registrar of Companies was never complied with.
15.I have given my considered thoughts to the above mentioned submissions of the appellant and find the same absolutely devoid of merits. The evidence of the complainant that late husband of the appellant had served as an employee of "BCSWML" has not been contested or refuted. In fact, the appellant in the course of her statement under Section 313 Cr.P.C. admitted this part of evidence as correct.
16.The scheme of arrangement (Ex. PW 3/4) approved by the Hon'ble High Court vide order dated 03.01.1983 relates to, inter alia, the transfer to, and vesting in, the respondent/ complainant company all properties, rights and powers of "BCSWML" as specified in 1st part of scheduleII thereto along with all other property, rights and power of the said company, pursuant to Section 394(2) of Companies Act. By virtue of said scheme of arrangement, all employees of "BCSWML" in service on the day Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 8 of 17 immediately preceding the effective date became the employee of the respondent/complainant company, without interruption in service, and on terms not less favourable to them and those applicable to them at that time. The schedule to the said scheme of arrangement approved by Hon'ble High Court of Delhi does so show that the premises in possession of the appellant was part of the property that was transferred from "BCSWML" to respondent/complainant company.
17.The evidence led by the complainant shows that services of the husband of the appellant came to an end in September 1985. Clearly, he was one of the employees of "BCSWML" on the date from which the scheme of arrangement became effective. Thus, his services also stood transferred to the respondent/complainant company under order of Hon'ble High Court. The question whether there was any right to an alterative employment is irrelevant for prosecution under Section 630 of Companies Act. Same applies to terminal service benefits, if any, admissible in favour of the husband of the appellant over and above what he may have received at the end of said services. If any case is pending in the Labour Court, as was mentioned by the appellant in the statement under Section 313 Cr.P.C., its adjudication will take care of claims Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 9 of 17 on such account.
18. Having regard to the order of Hon'ble High Court approving the scheme of arrangement, it cannot be said that the respondent/complainant company is a trespasser. Deposit of copy of the scheme of arrangement with the office of Registrar of Companies was a procedural formality, noncompliance with which, even if assumed, will not render the order invalid. Even otherwise, it was a formality between statutory authorities and the rights or liabilities of the appellant did not hinge on the same.
19.I would also reject the contention of the appellant based on omission on the part of respondent/complainant company to formally prove letter of appointment or the letter of termination of services, particularly against the backdrop of omission to refute in the statement under Section 313 Cr.P.C. that services of the husband of the appellant with "BCSWML" had actually come to an end. At any rate, he having died, there cannot be any contest to the fact that he had ceased to be an employee of the respondent.
20.It was then argued on behalf of the appellant that in terms of the scheme of arrangement approved by the Hon'ble High Court, 68% of the land held as property of "BCSWML" were to be passed on by the respondent/complainant company to Delhi Development Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 10 of 17 Authority (DDA), the remaining 32% falling to the share of respondent/complainant company. The argument sought to be developed on this basis is that it cannot be said with certainty as to whether the premises in possession of the appellant would have fallen within the area that is to go to DDA or whether it would form part of the estate that was to be owned by the respondent/complainant company. The argument ignores the clear stipulation in the scheme of arrangement where under the area within which the premises in question is situate fell to the share of respondent/complainant company as per partI of 2nd Schedule. There is, thus, no doubt or lack of clarity as to the title.
21.The counsel for the appellant then argued that the husband of the appellant was inducted in the premises formally and it cannot be said that his possession of the premises in question was wrongful within the meaning of the expression of Section 630 of Companies Act. The argument is against the terms on which the premises was handed over to the late husband of the appellant. The respondent company has proved the document Ex.PW 3/5 dated 15.11.1977 whereby the premises was allotted/handed over to the husband of the appellant. It carries a clear stipulation that the premises was handed over for residence of the husband of the appellant on Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 11 of 17 licence basis against the licence fee of Rs. 6/ per month for occupation and use with his family for the duration of his employment with the company and that upon the services with the company coming to an end, the licence would also come to an end giving rise to a liability to handover the vacant possession of the premises immediately. Admittedly, the services of the said employee came to an end in September, 1985, at least on the date he died. The allotment being on licence basis, the continued occupation after the said date became wrongful possession within the mischief of the provision contained in Section 630 of the Companies Act.
22.Against the above back drop, the argument that it is civil dispute, based on the judgments in K Radha Krishnan V. Thirumani Asphalts and Felts (P)Ltd. [2000(001) CLJ MAD], Jagdish Chandra Nijhawan V. S.K.Sararf [AIR 1999 SC 217]; Damodar Das Jain V. Krishna Charan Chakraborti and anr. [a judgment dated 22.08.1984 of Bombay High Court] does not appeal to me. The complainant is within its rights to pursue and prosecute the criminal action also available in law.
23.No other argument was submitted or pressed in aid.
24.In view of the above, the appeal questioning the judgment of the Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 12 of 17 court of the ACMM is totally devoid on merits. I find the Ld. ACMM has considered the facts and circumstances in entirety, properly appreciated the evidence adduced and recorded appropriate findings thereupon, after applying the relevant law. The judgment is well reasoned and I see no cause for finding any fault with it. The appellant has been correctly held guilty and convicted for the offence under Section 630 Cr.P.C.
25.Ld. Counsel for the appellant then submitted that the sentence awarded is too harsh and too heavy and beyond jurisdiction. He submitted that under the provision of Section 630 of Companies Act, prior to the amendment carried with effect from 13.12.2000, the appellant could be visited with fine which may extend to Rs. 1000/ only. He submitted that since offence was committed prior to the said date, the enhanced fine of Rs. 10,000/ cannot be imposed. It is further argued that even if it be taken that the appellant having continued to hold the unlawful possession of the premises in question, making the offence a continuous one, taking the case beyond the date of amendment of law on 13.12.2000, fine not more than Rs.10,000/ only can be imposed.
26.Per contra, the learned counsel for the respondent/complainant company referred to the judgment in case reported as Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 13 of 17 Kannankandi Gopal Krishna Nair Vs. Prakash Chander Juneja [1993 CRL.L.J. 2719], judgment dated 14.05.2010 in Criminal Revision Petition No. 233/2010 and judgment dated 03.06.2010 in Crl. Misc. No.1970 of 2010, both of High Court of Delhi.
27.Noticeably, similar contentions were also submitted before the ACMM, who repelled the same, inter alia, referring to observations of Hon'ble Supreme Court in 1995 Rajdhani Law Reporter 232 to the effect that Section 630 of the Companies Act provides a speedy relief to the companies in such matters. In the said case, Hon'ble Supreme Court further held that withholding possession of property of a company is a continued offence under the said provision of law. This was reiterated in 1991(1) Judgment Today (SC) 371, wherein it was held that this offence continues, until the employee concerned delivers the possession of the property in question to the company.
28.Taking this law further, Hon'ble Bombay High Court in Kannankandi Gopal Krishna Nair (supra) made certain observations in context of a case under Section 630 of Companies Act which are germane to the issues involved here and, therefore, Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 14 of 17 quoted as under: "The anatomy of continuing offence presents important aspect namely, that the offence has been committed and, therefore, actionable at the point of time when the property of the company was wrongfully withheld and that the offence 'recurs'."
X X X X X "This aspect of recurrence of offence provides the basis for prescribing punishment that would be in consonance with the period of time during which the offence has recurred.
Where the property consists of a residential flat on which the Company is required to pay rent or compensation from month to month, the wrongful withholding of the premises from month to month will constitute a recurrence of the offence from month to month. The legal injury that has been done to the Company runs parallel to the wrongful gain or wrongful benefit derived by the accused from month to month and for this purpose, the only unit that can be correctly applied in such cases would be period of one month since the tenancy runs from month to month and, therefore, the wrongful loss occurs to the Company every month and the corresponding wrongful gain to the accused from month to month. In this view of the matter, the accused would be liable to be penalised from month to month during the Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 15 of 17 entire period during which the offence has recurred." (Emphasis supplied.)
29. It is clear from the judgment of Bombay High Court that fine prescribed can be imposed in such like cases is that which can be imposed on monthly basis from the date of wrongful possession till restoration of the property to the company.
30.This is the spirit of law which has been followed by the Hon'ble High Court of Delhi even in cases referred to above.
31.In above facts and circumstances, there is no illegality or irregularity in the order passed by ACMM on sentence. The poverty of the appellant or her advanced age do not justify any lenient view being taken. Prosecution under Section 630 of the Companies Act, being a summary remedy should not have taken such long period to be brought to an end. Complaint was filed in 1995 and has taken 15 long years only for the trial to conclude. All this while, the appellant has enjoyed the benefit of the accommodation provided by the company virtually free of costs. It is time, she is made to restore the same back, also paying for the unauthorised possession all these years.
32.In view of the above, the judgment and orders on sentence Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 16 of 17 imposed in the appeal at hand are affirmed. The criminal appeals have no merits and are dismissed.
33.Vide order dated 01.0l9.2010 passed in the criminal appeal, the sentence was suspended. The said order stands vacated. The appellant is directed to deposit the fine and hand over the vacant possession of the property in question within a week from the date of this judgment in appeal, failing which Ld. ACMM shall proceed to execute the sentence imposed in default of compliance, as per directions in his order dated 11.08.2010.
34.The trial court record be returned forthwith with a copy of this judgment.
35.File of the criminal appeal be consigned to record room.
Announced in open Court today
on this 6th day of January, 2011 ( R.K. GAUBA)
Addl. Sessions Judge01
Central, Delhi.
Crl. App. No. 24/10 & 34/10 Kusumlata Versus M/s. Texmaco Ltd. 17 of 17