Delhi District Court
M/S Texmaco Ltd. vs Ranbir Singh on 29 February, 2012
IN THE COURT OF SH. GORAKH NATH PADNEY
ADDL. CHIEF METROPOLITAN MAGISTRATE (Spl. Acts) CENTRAL
TIS HAZARI COURTS, DELHI
M/s Texmaco Ltd. vs Ranbir Singh
CC No.1395/3/09
U/s 630 of Companies Act, 1956
JUDGEMENT
(a) Serial no. of the case : 02401R1028292003
(b) Date of commission of offence: On/after 30.11.1996 continuously
(c) Name of complainant : M/s Texmaco Limited
Having its registered office
At: Belgharia Calcutta and
Regional Office at:
508, Surya Kiran Building,
Kastoorba Gandhi Marg,
New Delhi01
(d) Name, parentage, residence: Ranvir Singh s/o Sh. Gaya Prasad
r/o Jhuggi No.12, Khilonawala Bagh,
Pambari Road, Delhi
(e) Offence complained of/ proved : U/s 630 of Companies Act
(f) Plea of accused : Pleaded not guilty.
(g) Final order : Convicted
(h) Date of such order : 29.02.12 Date of Institution : 21.08.03 Date of Reservation of Judgment: 29.02.12 Date of Pronouncement of Judgment: 29.02.12 Brief statement of the reasons for the decision:
1. This criminal complaint u/s 630 of the Companies Act, 1956, is filed by the complainant M/s Texmaco Limited against the accused Ranvir Singh alleging that on 17.03.81 accused joined the services of complainant company. On Texmaco vs Ranbir Singh 1-15 22.09.87, accused was allotted Quarter/Jhuggi No.12, Khilonawala Bagh, Pambari Road, Delhi, on licence basis by virtue of his employment. It is contended in the complaint that by virtue of a scheme of arrangement dated 03.01.1983, between the present complainant and M/s Birla Cotton Spinning & Weaving Mills Ltd. and pursuant to the order passed by Hon'ble Delhi High Court, the present complainant became the owner of the concerned Birla Mill Unit (where the accused was working) along with all its employees and the properties, including the property in question. It is further contended that pursuant to the said scheme of arrangement, complainant company also acquired all the rights, titles, interests in the properties of the mill and the housing colonies of the mill unit of the said M/s Birla Cottons Spinning and Weaving Mills Ltd. and all the employees of the said mill unit of M/s Birla Cottons Spinning and Weaving Mills Ltd., became the employees of the present complainant company. It is stated that in terms of order of Hon'ble Supreme Court of India in Petition No.4677/1985, the working of the mill in Delhi was closed w.e.f. 30.11.96. Thereafter, on 10.04.99 the accused joined the services of M/s Chambal Fertilizers and Chemical Ltd. at Baddi (H.P.). However, accused also ceased to be the employee of that mill at Baddi w.e.f 07.09.2000. As such, accused ceased to be the employee of complainant company as well as M/s Chambal Fertilizers & Chemical Ltd. It is alleged that despite cessation of his services accused did not vacate the quarter allotted to him and wrongfully withholding the quarter. Thus, it is prayed that accused may be directed to vacate and hand over the possession of the quarter in Texmaco vs Ranbir Singh 2-15 question to the complainant and he may be punished in accordance with law.
2. The accused appeared after service of summons and a notice u/s 251 Cr.P.C for the offence U/s 630 of the Companies Act was given to the accused to which he pleaded not guilty and claimed trial.
3. In order to substantiate its allegation, the complainant examined its attorney Sh. Radhey Shyam Sharma as PW1 who deposed regarding the allegations mentioned in the complaint and also produced the relevant documents. PW1 deposed that he is attorney of the complainant company and duly authorised to sign, verify the complaint and to depose in the present case vide resolution Ex. PW 1/1 and power of attorney Ex. PW1/2. He reiterated the facts of the complaint and also proved on record the certificate of incorporation of complainant's company as Ex. PW1/3 deposing that quarter in question was allotted to the accused through allotment letter Ex. PW1/5. The witness PW1 also proved on record the scheme of arrangement Ex PW1/4 through which all the rights, titles, interest, properties, assets and liabilities as well as the employees of the said mill unit of M/s. Birla Cotton Spinning and Weaving Mills Ltd., became that of the complainant company. He further deposed that accused ceased to be the employee of complainant company w.e.f. 30.11.1996, as such, he is liable to vacate the quarter but as the accused failed to vacate, he is wrongfully withholding the said quarter.
4. Statement of the accused was recorded u/s 313 read with section 281 Cr.P.C.
Texmaco vs Ranbir Singh 3-15 In his statement accused admitted that on 17.03.81 he joined the service of M/s Birla Cotton Spinning and Weaving Mills Ltd. He also admitted the scheme of arrangement Ex. PW1/4 through which the complainant became owner of the quarter in question as well as his employer. Accused denied that quarter in question was allotted by the complainant and stated that he himself constructed the said jhuggi. Accused did not deny that his service came to an end w.e.f. 30.11.96 after closure of mill at Delhi. In support of his claim accused examined himself as DW1 and one of his colleague Mr. Sardar Singh as DW2. DW2 also stated that the jhuggi in question was built up by the accused from his own sources and income.
5. I have heard the Learned Counsel for the complainant as well as accused and gone through the relevant records. I have also gone through the written arguments filed by the complainant as well as accused and considered the relevant provisions of law.
6. Section 630 of the Companies Act, 1956 provides as under: "(1) If any officer of 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 expressed or directed in the articles and authorised by this Act, He shall, on the complaint of the company or any creditors 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."
Texmaco vs Ranbir Singh 4-15
7. It is settled law that the scope of inquiry in a proceedings u/s 630 of Companies Act, 1956 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 provisions in furtherance of the object and purpose of the legislation which would suppress the mischief and advance the remedy. It was held in "1989 (4) SC 514, Atul Mathur vs Atul Kalra and Another" 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.
8. While dealing with the case U/s 630 of Companies Act, this court is to go by the following guidelines which are laid down by the Hon'ble Bombay High Court in "1993 CRI. L.J. 2791 " K.G.K. Nair v. P.C. Juneja".
"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:
(i) That the complaints be taken up and disposed of on a priority basis, the accent being on the avoidance of any unwarranted delay.
(ii) 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.
(iii) 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 Texmaco vs Ranbir Singh 5-15 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.
(iv) That the appeal, i.e., Court of Session, in the first instance, must judiciously scrutinize and vigorously examine the revision applications and appeal before granting stay orders.
(v) 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".
9. In the case of "S.K. Sarma v. Mahesh Kumar Verma, AIR 2002 SC 3294 = 2002 AIR SCW 3827" the case pertained to Section 138 of Railways Act which is somewhat 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 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............ The word 'discharge' used in context is of widest amplitude and would include cessation of relationship of employer and employee, may be 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 provisions 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 contrat 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 Railways Act........"
10.It is relevant to note the essential ingredients to prove the offence u/s 630 of Companies Act, which are mentioned as below:
(a) Incorporation of the complainant company under the Companies Act, Texmaco vs Ranbir Singh 6-15
(b) Ownership of complainant company of the aforesaid quarter,
(c) That there exists/existed the relationship of employer and employee between the complainant company and employee (i.e accused),
(d) That accused was allotted quarter in question on licence basis and
(e) That accused ceased to be employee of the complainant company and he is wrongfully withheld the quarter in question.
11.PW1 deposed that the complainant company is incorporated under the Companies Act and proved on record Incorporation Certificate as Ex. PW1/3. Accused dis not specifically dispute the certificate of incorporation and simply stated that he does not know. However, it is clear from the Ex. PW1/3 that the Complainant company the registered under the Companies Act. Learned defence counsel argued that the power of attorney and resolution in favour of the complainant is not proved in accordance with law and it does not comply with the provisions of Power of Attorney Act. The persons who delegated his power to the alleged attorney did not file his power to delegate. It is also argued that the resolution regarding power of attorney in favour of complainant has not been proved. The complainant is stranger to the company, therefore, no resolution could have been passed in favour of the complainant. However, this court does not find any force in his submissions. Accused has objected this power of attorney for the first time at the fagend of the trial and has not raised objection at the time of exhibiting this power of attorney i.e. Ex. PW1/2. Perusal of power of attorney placed on record shows that it has been perfectly and legally notarized and it fulfills all the ingredients of section 85 of Indian Evidence Act. Section 85 of the Indian Evidence Act clearly provides that once there is a duly notarized power of attorney then it shall be presumed to be true unless the contrary is proved. Accused has not produced anything to disprove Texmaco vs Ranbir Singh 7-15 the power of attorney. This court is supported with the law laid down by the Hon'ble Supreme Court in "AIR 1971, SC 761, Jugraj Singh vs Jaswant Singh".
12.This court is further supported with the case law "AIR, 1982 Delhi 4897, Citibank N.A., New Delhi vs Juggilal Kamlapat Jute Mills ©. Ltd." in which it has been held that execution of power of attorney by a Bank's Executive Officer and Cashier delegating certain powers to one employee and documents bearing Bank's seal and attested by Notary Public raises presumption that power of attorney is executed by the bank. Word "person" in section 85 includes legal person. It is further held by the Hon'ble High Court in "AIR 1981 Delhi 222" and "AIR 1972 Allahabad 219" that a power of attorney along with verifications are to be presumed to be true u/s 85 of Evidence Act. This court is further supported with the case law laid down by the Hon'ble High Court in "AIR 2007 Delhi 147, Kamla Rani and Ors vs M/s Texmaco" which was a case of the present complainant on the same facts. It was contended by the employee before Hon'ble High Court that eviction case was not filed by a properly authorized person and Hon'ble High Court held that: ...Once a document is authenticated by a notary public, it will be presumed that the document was duly executed and was in order. 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. ...Decision of the Hon'ble Supreme Court reported as "AIR 1997 SC 3 Union of India vs Gresham 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 Texmaco vs Ranbir Singh 8-15 concerned was authorized to do so".
13.In his statement PW1 Mr. Radhey Shyam Sharma deposed that by virtue of scheme of arrangement Ex. PW1/4, the complainant company became owner of the quarter in question as well as employer of accused. This fact has been admitted by the accused in his statement recorded u/s 313 Cr.P.C. Though learned defence counsel argued that complainant is not the owner of the quarter in question, therefore, complainant has no locus standi to file the present complaint against the accused. He further argued that in pursuance to the aforesaid order/scheme of arrangement the complainant was required to do certain acts and a certified copy of the order of Hon'ble Delhi High Court was to be submitted with ROC, Calcutta. However, they have not fulfilled these requirements, therefore, this order has no application and complainant company cannot claim ownership by virtue of this order. While bare perusal of scheme of arrangement Ex. PW1/4 shows that the complainant company became owner of the quarter in question as well as employer of accused. Furthermore, this scheme of arrangement has not been challenged hence it became final. Relevant para of the order of Hon'ble High Court is mentioned wherein it is specified that the complainant company had become the owner of the i.e. M/s Birla Cottons Spinning and Weaving Mills Textiles as well as quarter in question.
1. That all the property, rights, and powers of the said transferor company specified in the first, second and third parts of the Schedule II hereto and all the other property, rights and powers of the said transferor company be transferred without further act or deed to the said transferee company and accordingly the same shall, pursuant to section 394(2) of the Companies Act, 1956, be transferred to and vest in the said transferee company for all the estate and Texmaco vs Ranbir Singh 9-15 interest of the said transferor company for all the estate and interest of the said transferor company therein but subject nevertheless to all charges now affecting the same, and
2. That all the liabilities and duties of the said transferor company by transferred without further act or deed to the said transferee company and accordingly the same shall, pursuant to section 394(2) of the Companies Act, 1956, be transferred to and become the liabilities and duties of the said transferee company: and
3. That all proceedings now pending by or against the said transferor company be continued by or against the said transferee company; and
4. That all contracts, deeds, bonds, agreements and instruments of whatever kind or nature relating to the said units of M/s Birla Cottons shall continue to be in full force and effect against or in favour of Texmaco as the case may be and enforced as fully and effectively as if Texmaco instead of Birla Cotton had been a party thereto.
14.It is established from the perusal of the order passed by Hon'ble Delhi High Court that complainant company has become the owner of all the properties of the unit of M/s Birla Cottons Spinning and Weaving Mills Limited without any further Act or Deed and said quarter stood transferred and vested with the complainant company for all the estate and interests. Moreover, in "AIR 2007 Delhi 147, Kamla Rani and Ors vs M/s Texmaco Ltd." Hon'ble High Court has also relied on the same scheme of arrangement Ex. PW1/4 and held that the entire assets of M/s Birla Cottons Spinning and Weaving Mills Ltd. stood transferred to M/s Texmaco Ltd. and therefore said company was the successorininterest of M/s Birla Cottons Spinning and Weaving Mills Ltd.. Thus, it is clear that the complainant company became owner of all the property, rights and powers in the mill unit of transferee company without any further act or deed and by virtue of scheme of arrangement Ex. PW1/4.
15.The question of ownership is not at all required to be gone into the Texmaco vs Ranbir Singh 10-15 proceedings of section 630 of Companies Act. As per section 116 of Evidence Act neither the tenant nor the licensee can be allowed to challenge the title of their landlord/licensor. The provisions of Section 116 of Evidence Act reads as under: Section 116 "Estoppel of tenant; and of licensee of person in possession - No tenant of immovable property, or person claiming through such tenant, shall, during the continuance of the property, or person claiming through such tenant, shall, during the continuance of the tenancy, be permitted to deny that the land lord of such tenant had, at the beginning of the tenancy, a title to such immovable property; no person who came upon any immovable 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 such licence was given"
As held in "Bilas Kunwar vs Desraj Ranjit Singh, AIR 1995 Privy Council at p.98".
"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".
The estoppel u/s 116 is applicable upon the tenant as well as licensee. In this regard this court is supported by the law laid down in "Krishna Prasad Lal vs Barabani Coal Concern Ltd, AIR 1937 P.C. 251". In regard to the provisions of 116 of Evidence Act, Hon'ble Supreme Court has made the following observation in the case of "Bansraj Laltaprasd Mistra vs Stanley Parker Jones, AIR 2006 SC 3569 = 2006 AIR SCW 1073".
"14..... a person who comes upon any immovable property by the license of the person in possession thereof, shall not be permitted to deny such person and title of such possession at the time when such license was given".
In view of the aforesaid discussions it is held that the complainant is the owner of the quarter in question.
Texmaco vs Ranbir Singh 11-15
16.The complainant company was further required to establish on record that accused was an employee of the complainant company. Learned defence counsel argued that accused is not employee of the complainant company, however this court does not find any substance in it. In his statement PW1 has clearly stated that on 17.03.81 accused joined the services of M/s Birla Cotton Spinning and Weaving Mills Limited which was taken over by the complainant company by virtue of the scheme of arrange ex. PW1/4. This scheme of arrangement has not been denied by the accused. Furthermore, in his cross examination DW2 also admitted that accused was an employee of the complainant company. Thus, no further evidence is required to prove this fact. Furthermore, it is clear from the aforesaid discussions that as to how the present complainant stepped into the shoes of M/s Birla Cottons Spinning and Weaving Mills and became owner of quarter in question and employer of accused w.e.f. 03.01.83. Thus, it is crystal clear that till 30.11.96 accused worked with the present complainant only but nonelse. In view of the aforesaid discussions, the relationship of employee and employer stands proved.
17.Complainant company was further required to establish on record that accused was the licensee of the complainant company. In his statement PW1 has deposed that the accused was allotted quarter in question through allotment letter Ex. PW1/5 on licence basis. Though accused denied that quarter in question was allotted to him by the complainant and stated that he Texmaco vs Ranbir Singh 12-15 himself constructed the jhuggi/quarter in question. In his statement accused endeavoured to say that since the jhuggi/quarter in question was constructed by him from his own sources/income, complainant company has nothing to do with the same. For the sake of argument it is presumed that accused constructed the jhuggi/quarter in question, yet this act does not make accused owner of the quarter in question. Accused has not explained as to in what capacity accused constructed the said quarter/jhuggi in question. Accused has not brought on record any document which could show that he was authorized to construct the said jhuggi. In his cross examination examination DW1/accused admitted that allotment letter Ex. PW1/5 bear his signature. DW2 also stated in his cross examination that no other person except the employee of the company cannot construct any dwelling unit at Khilonawala Bagh. Admission is the best evidence, hence, no evidence is required to prove this fact and it is held that quarter in question was allotted to the accused by the complainant and accused is a licensee and complainant is the licensor.
18.In his evidence PW1 categorically stated that service of the accused came to an end w.e.f 30.11.96 after closure of the mill at Delhi. This fact has not been denied by the accused in his statement recorded u/s 313 Cr.P.C. DW2 also admitted that the accused ceased from the employment of complainant. It is further clear from the cross examination of DW1 that service of accused came to an end w.e.f. 30.11.96. In his cross examination DW1 clearly stated that after 30.11.96 he joined the duty at Baddi, Himachal Pradesh with M/s Chambal Fertilizers and Chemicals Ltd. and in 2000 his services were terminated by Texmaco vs Ranbir Singh 13-15 that company. Accused has also not brought any thing on record or lead any evidence to establish on record that he was in the service even after 30.11.96. In view of the aforesaid discussions, it is held that service of the accused came to an end w.e.f 30.11.96 after closure of the mill at Delhi.
19.Now let us examine whether complainant company has established that accused is wrongfully withholding the quarter in question. PW1 specifically deposed that accused was to remain in possession of the quarter till he was in the services of the company and after cessation of his service he was to vacate and hand over the quarter to the complainant company. It is already held that service of accused came to an end w.e.f 30.11.96 after closure of mill at Delhi and after that he is wrongfully and illegally withholding the quarter. Furthermore, in his cross examination DW2 clearly stated that the quarters allotted by the company to the employees have to be vacated at the cessation of their services. Thus, accused was under obligation to vacate and hand over the possession of quarter in question which he failed to do so. Accused did not deny that he is still in possession of the quarter in question. Since, accused did not vacate and hand over the possession of the quarter in question after cessation of his service, it is held that accused has been wrongfully withholding the quarter in question after cessation of his service. Moreover, it is also not disputed during cross examination that complainant company made request lastly on 10.07.03 seeking vacation of the quarter.
20.Learned counsel for complainant submitted that other accused persons were Texmaco vs Ranbir Singh 14-15 also convicted by the Learned Predecessor Courts of Learned ACMM on the basis on similar complaints filed by the present complainant. He further submitted that these orders have been upheld by the Hon'ble High Court and Hon'ble Apex Court in the following cases: "Crl. Rev. P. No. 233/2010, as Lakhan Singh vs Texmaco No. 2057/06, as Kanta Devi vs Texmaco.
"SLP (Crl.) 5216/06"
2006[3] JCC 1964, Mohan Singh vs M/s Texmaco & Anr.
Crl.Rev. Petition No.21/2011, Khajan Singh vs State & Anr. CRL.M.C.80/2011, Kusum Lata vs Texmaco Ltd.
CRL.REV.P.380/2010Bhura Mal Thr. Its LR's Chander Kant vs State & Anr.
CRL.REV.P.789/2006 & CRL.REV.P.790/2006
21.Thus, in view of the aforesaid discussions, it is held that complainant has been able to establish that accused was allotted the aforesaid quarter on licence basis by virtue of his employment. It is further held that services of the accused came to an end w.e.f 30.11.96 after closure of mill at Delhi and after cessation of his service he failed to vacate and hand over the possession of the quarter in dispute to the complainant. In such, circumstances it is held that accused is wrongfully withholding the quarter of the complainant company after cessation of his service. Thus, it is held that complainant has been successful in proving its case against the accused beyond reasonable doubt. Accordingly, accused is held guilty and convicted for the offence u/s 630 of the Companies Act 1956.
(GORAKH NATH PANDEY) ACMM(SPECIAL ACTS) CENTRAL TIS HAZARI COURTS DELHI Announced in open court on 29.02.12 Texmaco vs Ranbir Singh 15-15