Gujarat High Court
Patel Filters Ltd. vs Mohanlal N. Shah And Anr. on 12 October, 1994
Equivalent citations: (1995)1GLR465
JUDGMENT K.R. Vyas, J.
1. This Criminal Revision Application is preferred by the applicant-Company against the judgment and order dated 19-7-1989 passed by the learned Addl. City Sessions Judge, Ahmedabad in Criminal Appeal No. 77 of 1988 arising out of the judgment and order passed on 9-8-1988 by the learned Addl. Chief Metropolitan Magistrate, Ahmedabad in Criminal Case No. 527 of 1987 by virtue of which the Appellate Court allowed the Appeal and set aside the order of conviction passed in the said Criminal Case convicting the present opponent for the offences punishable under Section 630(1 )(b) of the Companies Act and sentencing him to pay a fine of Rs. 1000/- in default, thereof to undergo S.I. for 15 days. The learned Addl. Chief Metropolitan Magistrate also directed the opponent to hand over the vacant and peaceful possession of the flat before 31-8-1988 to the applicant-Company. By allowing the appeal, the Appellate Court had acquitted the opponent of the aforesaid offence and the fine paid by the present opponent was ordered to be refunded.
2. The facts giving rise to the present case are as under:
The applicant is a Limited Company registered and incorporated as such under the provisions of the Indian Companies Act, 1956. The Company was incorporated and registered with the Registrar of Companies with effect from 14-2-1977. It is the case of the Company that the Company has taken on lease a fiat in Flat No. 3, Poojan Apartment, Near Jhanvi Restaurant, Nr. L. D. Engineering College, Navrangpura, Ahmedabad at monthly licence fee of Rs. 1200/- (inclusive of all kinds of taxes) for providing residential accommodation to its employees. The said flat was taken on lease with effect from 1-2-1995 from one Smt. Ami Mukul Parikh who is the landlady of the said flat and the administration/management of the said property is done by her husband-Mukul G. Parikh. The opponent-Mohanlal M. Shah was appointed by the applicant-Company as Company Secretary with effect from 7-8-1981 (Exh. 9). Initially a consolidated salary of Rs. 2000/- per month (all inclusive) was paid to him and the same was to be reviewed later on. By a letter dated 30th June 1982, the opponent was confirmed on the post as Company-Secretary with effect from 1-7-1982 (Exh. 10). By a letter dated 7-8-1982 (Exh. 11), the terms of appointment of the opponent were revised whereby he was given basic salary of Rs. 2100/- with effect from 1-7-1982 and he was to be paid Rs. 250/- as H.R.A. per month. It is to be noted that though it was agreed to pay Rs. 250/- as H.R.A. to the opponent, the applicant-Company had given H.R.A. at Rs. 1000/- with effect from 1-1-1984 pursuant to an application dated 23-9-1984 (Exh. 12) made by the opponent. The said H.R.A. was also subsequently increased to Rs. 1200/- with effect from 1-1-1985. As stated above, the applicant has taken the flat in question on leave and licence basis with effect from 1-2-1985 (agreement Exh. 45). The said flat was allotted to the opponent on the same day, i.e., on 1-2-1985 for his residential purpose purely in his capacity as Company's employee. It is the case of the applicant that the allotment of the said flat was free of cost and the associated expenses like taxes, water charges, general upkeep were also borne by the applicant-Company, but the electricity charges were to be borne by the opponent. It is further the case of the applicant-Company that after allotting the flat in question with effect from 1-2-1985, the applicant-Company stopped paying H.R.A. to the opponent. The opponent by his letter dated 24-2-1986 (Exh. 21) tendered his resignation requesting the Company to relieve him from any date convenient to the Company. The applicant-Company accepted the resignation vide its letter dated 31st March, 1986 (Exh. 30) by stating that the opponent will be relieved from the post with effect from 31st March 1986. It is the case of the applicant-Company that the opponent was required to vacate the flat in question with effect from 31-3-1986, the date on which he was released from the services of the applicant-Company, however, the opponent did not vacate the flat. The applicant made several requests to the opponent to vacate the flat and hand over the vacant and peaceful possession. Inspite of repeated requests by the Company, the opponent did not vacate me flat and hence the Company was constrained to address a registered A. D. letter dated 19-12-1986 (Exh. 22) to vacate the said flat with immediate effect and also to pay Rs. 10,800/- towards me rent of the said flat from 1-4-1986 till 19-12-1986 with the further intimation that in case of his failure to vacate me said flat within a period of one week from 25-12-1986, the Company shall be constrained to take the matter wide the Police Authorities to take necessary legal action against him for forcibly occupying the Company's accommodation and thereby committing serious criminal offence. The opponent by reply dated 27-12-1986 through his Advocate Shri H.R. Shah informed the Company that me opponent was never asked to vacate the aforesaid flat at any time, much less, upon the resignation from the Company. It is further stated in the reply that the amount of rent asked by me Company is excessive and prohibitive and mat the standard rent of the said premises is Rs. 350/- per month, and therefore, the applicant-Company was asked to furnish the particulars about the cost of construction of the flat, the cost of the land etc. to enable the opponent to fix up the standard rent in accordance with law. According to the opponent, he has committed no criminal offence, as according to him, me flat was given to him for residence of himself and his family by the Company as a tenant and as such the opponent continues to be the tenant in lawful possession and unless and until, the applicant gets a suitable decree against the opponent by a Court of competent jurisdiction, the applicant-Company cannot get possession. It was further stated in the reply that the applicant is not entitled seek vacant possession of me said flat in view of the two years time specifically granted to the opponent in view of the protection of the Bombay Rent Act, as the opponent was permitted to reside in the flat as a tenant at the monthly rent of Rs. 250/- till March, 1988.
3. In view of me aforesaid reply of me opponent, the applicant filed criminal complaint against the opponent under Section 630(1)(b)(2) of me Companies Act. During the proceedings before the learned Metropolitan Magistrate, the Company has produced the documentary as well as oral evidence consisting of (1) Naresh P. Parekh, P.W. 1 (Exh. 7)-the Senior Officer and the Accountant of the applicant-Company, (2) Mukul Parikh-the husband of the landlady, P. W. 2 (Exh. 33), (3) Smt. Ami Mukul Parikh-the landlady of the flat in question P. W. 3 (Exh. 35), (4) Yashwant N. Pandya, P. W. 4 (Exh. 36). After considering the oral as well as documentary evidence, the learned Magistrate passed the order of conviction against the opponent under Section 630(1)(b) of the Companies Act and passed the sentence as stated in Para-1 of this judgment. Against the said judgment, the opponent filed appeal being Criminal Appeal No. 77 of 1988 which came to be allowed by the learned Addl. City Sessions Judge, Ahmedabad by setting aside the judgment of the trial Court. Hence, the present Revision Application.
4. As can be seen from the judgment of the learned Addl. City Sessions Judge, Ahmedabad, the appeal was allowed mainly on three grounds:
(1) The Criminal proceedings initiated against the opponent at the instance of Naresh Parekh-the Accountant of the Company is not maintainable.
(2) The failure on the part of the trial Court to put the question under Section 313 of the Criminal Procedure Code about the two letters Exhs. 19 and 20 and thereby not affording the opponent an opportunity to explain these documents should be considered to have materially prejudiced the opponent.
(3) In view of the fact that there is a bona fide dispute of civil nature regarding the title of the Company to the property, the learned Magistrate should not have ventured to determine such a dispute under Section 630 of the Companies Act.
5. Mr. Trivedi, learned Counsel for the applicant-Company after having taken me through the entire material on record has submitted that none of the findings recorded by the learned Addl. Sessions Judge is sustainable in view of certain documents on record wherein the opponent has clearly admitted that the flat in question was taken by the Company on leave and licence basis from the landlord and he was occupying the same in the capacity of the employee of the Company. In this view of the matter, the finding recorded by the learned Addl. City Sessions Judge about the bona fide dispute on the part of the opponent is contrary to the admission made by the opponent and is, therefore, perverse. With regard to the authority of Mr. Naresh Parekh to file complaint, it was pointed out that the said Mr. Parekh was duly authorised in view of the subsequent resolution passed by the Board retifying the action of Mr. Parekh. In the submission of the learned Advocate for the petitioner, the learned Addl. City Sessions Judge has on the contrary committed an error in not allowing the applicant to produce the said resolution in the appeal proceedings. Regarding the finding that material questions were not asked in the statement recorded under Section 313 of the Criminal Procedure Code, it was submitted that since the opponent was the author of those letters and he has not cross-examined the material witness who produced those letters, these documents have in fact been admitted, and therefore, it is not necessary to get any clarification from the opponent. In any case, no prejudice is caused to the opponent and therefore, the finding recorded by the learned Addl. City Sessions Judge is illegal. In support of the aforesaid contentions, the learned Advocate for the applicant has relied on various case laws which shall be referred to a little later.
6. On the other hand, Mr. K.S. Zaveri, learned Advocate for the opponent has supported the judgment of the Lower Appellate Court in toto and has submitted that this being a Revision Application, it is not open for this Court to take a different view by disturbing the finding recorded by the Lower Appellate Court unless it is found that such finding by the Lower Appellate Court is illegal and perverse. In the submission of Mr. Zaveri, since nothing has been pointed out by the applicant about the finding recorded by the Lower Appellate Court, no interference is called for.
7. Now as far as the contention regarding the revisional powers of this Court is concerned, under Section 401 of the Cr.P.C., it is now well settled that this Court is expected to see the legality, correctness or propriety of the order and that the same can be seen by persuing the complaint and the evidence on record. The Supreme Court in the case of Janta Dal v. H.S. Chowdhary and Ors. has observed that:
The object of the revisional jurisdiction under Section 401 is to confer power upon superior criminal Courts - a kind of paternal or supervisory jurisdiction - in order to correct miscarriage of justice arising from misconception of law, irregularity of procedure, neglect of proper precaution or apparent harshness of treatment which has resulted, on the one hand, or on the other hand in some underserved hardship to individuals. The controlling power of the High Court is discretionary and it must be exercised in the interest of justice with regard to all facts and circumstances of each particular case, anxious attention being given to the said facts and circumstances which vary greatly from case to case.
In view of the ruling of the Apex Court, the revisional powers can be exercised to correct miscarriage of justice arising from misconception of law, irregularity of procedure etc. Relying on the decision of the Supreme Court in the case of Janta Dal (supra), I see no force in the submission of Mr. Zaveri that it is not open for this Court to take a different view from the one taken by the Lower Appellate Court while exercising revisional power as in my view, this is a fit case wherein the Lower Appellate Court has committed illegality resulting in miscarriage of justice.
8. Now, in the present case, the applicant-Company has invoked the provisions of Section 630 of the Companies Act which reads as under:
Section 630. Penalty for wrongful withholding of property: (1) If any officer or employee of a company-
(a) wrongfully obtains possession of any property of a company; or
(b) having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act;
he shall on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to one thousand rupees.
(2) The Court trying the offences may also order such officer or employee to delivery 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.
Reading this section it is amply clear that though it is penal in nature, it has been enacted with the object of providing a summary procedure for retrieving the property of the Company in case (i) Where an officer or employee of a company wrongfully obtains possession of the property of the Company and (2) Where having been placed in possession of any such property during the course of his employment wrongfully withholds possession of it after the termination of his employment. It is also clear that Clauses (a) & (b) of sub-section (1) is self-contained and independent of the other. Clause (a) deals with property wrongfully obtained by present employee, while Clause (b) deals with wrongful withholding of possession by both a past and a present employee. However, the question, in the instant case, is how far, the Criminal Court should venture to determine the dispute regarding obtaining wrongful possession of any property or wrongfully withholding any property in possession etc., especially when, determination is of a summary nature. In the case of Damodar Das Jain v. Krishna Charan Chakraborti and Anr. Criminal Appeals Nos. 313 and 314 of 1985 decided on November 17, 1988 reported in 1989 (4) SCC 531 on which Mr. Zaveri has placed reliance, the Supreme Court has held that the Magistrate had no jurisdiction to pass orders of eviction and conviction. Only the Civil Court has jurisdiction to determine the question arising as to whether the Company was a tenant of the flat under the Rent Act and whether after the expiry of the written agreement of licence the Company remained a licensee. Reading the said judgment, it appears that a specific finding has been recorded by the Supreme Court that the disputes raised by the respondent (employee) were bona fide disputes, and the said disputes can only be decided by a Civil Court, hence, the parties were relegated to Civil Court. In a later judgment of the Supreme Court in the case of Atul Mathur v. Atul Kalra and Anr. Criminal Appeal No. 549 of 1987 decided on August 8, 1989 on which the learned Advocate for the applicant has placed reliance, the Supreme Court, while interpreting Section 630 of the Companies Act has laid down that object of section is to provide speedy relief to a company when its property wrongfully detained or withheld by an employee or ex-employee. The Supreme Court while explaining the case of Damodar Das (supra) has held that a question of bona fide dispute depends upon facts of each case - Merely because company's claim to possession refuted by accused it would not become a bona fide dispute. In the said case, the accused had in fact filed a Civil Suit raising dispute regarding the claim of the property and inspite of that the Supreme Court has observed that merely because the accused had schemingly filed a suit in Civil Court it can never be said that the Civil Court was in seisin of a bona fide dispute between the parties and as such the Criminal Court should have stayed its hands when the company filed a complaint under Section 630 of the Act. If such a view is taken it would not only lead to miscarriage of justice but would also render ineffective the salutory provision of Section 630.
9. Reading the aforesaid judgment of the Supreme Court in the case of Atul Mathur, it is absolutely clear that the object of Section 630 of the Companies Act is to provide speedy relief to the Company when its property is wrongfully detained or withheld by an employee or ex-employee and the dispute between them when amounts to a bona fide dispute be adjudicated upon by a Civil Court and not by a Criminal Court will always depend upon the facts of each case and even if there is a civil dispute, the Criminal Court is not debarred from proceeding further with the complaint.
10. Now, turning back to the present case, as stated above, the opponent had joined the applicant-Company on 7-8-1981 (Exh. 9) and till he was provided with the flat in question on 1-2-1985, he was given House Rent Allowance. Exh. 12 is a letter dated 23-9-1984 addressed by the opponent whereby he reminded the Mg. Director of the applicant-Company to provide him rent free accommodation and till he was allotted rent free accommodation, he requested for increase in H.R.A. As can be seen from the evidence of Smt. Ami Mukul Parikh (Exh. 35), Mukul Parikh (Exh. 33) and Yashwant N. Pandya (Exh. 36), it is clear that the applicant-Company had entered into an agreement with Smt. Ami Parikh-the landlady of Poojan Apartments in connection with hiring the flat in question. The licence deed is on record at Exh. 45 and came into existence with effect from 1-2-1985. As can be seen from the evidence of Naresh Parikh, through him the Company had filed the complaint vide Exh. 7 that the aforesaid flat was allotted to the opponent as he was in service of the applicant-Company. The Company had made payment of security deposit and advance rent, the payment voucher whereof is produced at Exh. 25 and the receipt whereof is at Exh. 26 issued by Smt. Ami Parikh and endorsed by Mukul Parikh. The opponent has resigned from the applicant-Company vide his resignation letter dated 24-2-1986 and was relieved with effect from 31-3-1986 vide Exh. 21. As the opponent had not vacated and handed over the possession of the flat in question, the applicant vide letter dated 19-12-1986 (Exh. 22) asked the opponent to vacate the flat in question in reply to which the opponent sent a letter dated 27-12-1986 through his Advocate vide Exh. 24 wherein he has categorically stated that the flat in question was allotted to him as a tenant by the applicant-Company and as such he is in lawful possession. Thus, in view of the letter dated 27-12-1986 the first version of the opponent was to the effect that he was tenant of the applicant-Company. It is true that later on he has changed his version by addressing a letter dated Nil (Exh. 41) written in the month of May to Smt. Ami Parikh, the landlady alongwith a cheque dated 18-5-1988 alleging that he was a direct tenant of Smt. Ami Parikh, and that, therefore, she should accept the cheque. Exh. 43 is the reply by Smt. Ami Parikh and Mr. Mukul Parikh denying the averments contained in the letter of the opponent. They have categorically stated that the opponent has concocted the story of direct tenancy in order to sabottage and subvert the factual position to weaken the Criminal case filed against him. It is to be noted that the evidence of Smt. Ami Parikh was recorded on 4-5-1988 wherein she supported the case of the applicant-Company. Thus, it is clear that as the evidence had gone against the opponent, the opponent for the first time after about 17 months, came out with the version of direct tenancy with the original landlady. In view of this, it is clear mat till May 1988, at no point of time, the opponent has raised any dispute with regard to tenancy with the original landlady. On the contrary, in reply to the letter Exh. 41 addressed by the applicant-Company, the opponent has come out with the case of he having become a direct tenant of the applicant-Company. This is contradictory in terms. In this view of the matter, in fact, there was no dispute, much less, any bona fide dispute between the parties regarding the tenancy when the criminal case was filed. It is an undisputed fact that after the judgment of the criminal case on 9-8-1988, the opponent has filed Summary Suit No. 3685 of 1988 in the Small Causes Court against the landlady and the applicant-Company wherein he has obtained interim injunction restraining the opponents from evicting him. Considering these circumstances, I am of the view that the opponent as the exemployee of the Company has wrongfully withheld the flat in question of the applicant-Company and the applicant-Company is entitled to get back the possession of the flat in question from the opponent. In this view of the matter, the finding recorded by the learned Addl. City Sessions Judge that there was a bona fide dispute of civil nature, and therefore, the Criminal Court has no jurisdiction to decide the question in proceedings of a summary nature cannot be sustained.
In the instant case, Mr. Zaveri, learned Advocate for the opponent has pointed out certain circumstances with a view to showing the alleged transaction of giving the flat to the opponent between the applicant-Company as well as the landlady and her husband is suspicious. He submitted that the entire agreement Exh. 45 is typewritten, however, the last line is hand-written stating "This agreement is effective from 1-2-1985.". The agreement is on the stamp paper of Rs. 10/- only, no resolution is passed by the Company to take the flat on lease, no resolution is passed by the Company authorising Mr. Jadav the Asstt. Manager (Personnel) to enter into and or execute the agreement on behalf of the Company. Mr. Zaveri also submitted that even in the letter Exh. 30 accepting the resignation of the opponent, the Company though called upon the opponent to return the articles like identity card, bill books, if any, to the Company, has not sought to hand over the possession of the flat in question. I see no substance in this submission of Mr. Zaveri. As per the decision rendered by the Supreme Court in Atul Mathur's case (supra) there must be a bona fide dispute between the parties regarding the property of the Company. It is not open for the opponent to dispute the mode and/or manner in which the flat was taken on leave and licence basis by the applicant from the original landlady especially when he is occupying the same without raising any dispute and has not even made a claim of tenancy with the original landlady before she was examined. The circumstances pointed out by Mr. Zaveri are so tirfle that they do not even deserve any notice. Assuming for the sake of argument that certain irregularities were there in executing the agreement etc., the opponent just cannot make a hue and cry over which he is not at all concerned so long as he does not come forward with any dispute with the original landlady. In any case now look at the conduct of the opponent. It is clear from the letter dated 23-9-1984 (Exh. 12) written by the opponent to the Company whereby he reminded the Mg. Director to provide him rent free accommodation and till he was allotted the same, he requested for increase in H.R.A. which was in fact increased, would clearly go to show that the applicant was in fact provided the accommodation, and the opponent occupied the same as the employee of the Company. No sooner he was provided with the accommodation, the H.R.A. was stopped is an important circumstance which would suggest that only Company provided the accommodation. Further in reply to applicant's letter dated 19-12-1986 (Exh. 22), he admits that he is a tenant of applicant and also states that he has been permitted to stay in the flat for two years, i.e., upto 1988. He suddenly takes a summersault after the evidence of Smt. Ami Parikh which also does not help him, by saying that he is a direct tenant of the said landlady; not only that but he also files a civil suit after the judgment of Criminal Court which goes against him. Alter having perused the evidence of Naresh Parekh on behalf of the applicant-Company and Smt. Ami Parikh and her husband Mukul Parikh there is no manner of doubt that the flat was taken on leave and licence basis by the applicant-Company and was allotted to the opponent as the employee of the Company and he is, therefore, liable to hand over vacant and peaceful possession upon his leaving the Company. Merely because the Company's claim in possession is refuted by the opponent by pinpointing the circumstances, the same would not become a bona fide dispute. In view of this, I find no reason to accept the contention of Mr. Zaveri based on the aforesaid circumstances pointed out by him.
11. The learned Addl. Sessions Judge has interfered with the order of the learned Chief Metropolitan Magistrate also on the ground that material questions were not asked regarding Exhs. 19 and 20 to the opponent when his statement was recorded under Section 313 of the Criminal Procedure Code. Mr. Zaveri, learned Advocate for the opponent has also while supporting the reasonings of the Lower Appellate Court on this point submitted that no reliance can be placed on the said two documents. He has relied on the decision of the Supreme Court in the case of Tara Sing v. The State . In the said case, it appears that the statements made before the Committing Magistrate was read over to the accused and he was asked as to whether he has anything to say about them and in that context, the Supreme Court has observed that:
It is not a proper compliance to read out a long string of questions and answers made in the Commital Court and ask whether the statement is correct. A question of that kind is misleading. In the next place it is not sufficient compliance to string together a long series of facts and ask the accused what he has to say about them. He must be questioned separately about each material circumstance which is intended to be used against him. The whole object of the section is to afford the accused a fair and proper opportunity of explaining the circumstances which appear against him. The questioning must therefore be fair and must be couched in a form which an ignorant or illiterate person will be able to appreciate and understand. Even when an accused person is not illiterate his mind is apt to be perturbed when he is facing a charge of murder. He is, therefore, in no fit position to understand the significance of a complex question. Fairness, therefore, requires that each material circumstance should be put simply and separately in a way that an illiterate mind, or one which is perturbed or confused, can readily appreciate and understand.
It is further observed by the Supreme Court that:
Every error or omission in this behalf does not necessarily vitiate a trial because the errors of this type fall within the category of curable irregularities. Therefore, the question in each case depends upon the degree of the error and upon whether prejudice has been occasioned or is likely to have been occasioned.
12. In the instant case, Exhs. 19 and 20 are the two letters dated 18-1-1986 addressed by the opponent to the applicant whereby he has requested the Company to effect minor repairs in the rent free accommodation allotted to him and also requesting the Company to make payment for common services like cleaning, water etc. in respect of the aforesaid premises. Both these letters were written and signed by the opponent himself. The learned Metropolitan Magistrate has considered these letters Exhs. 19 and 20 as the admission of the opponent that the applicant has allotted a flat to him and since nothing has been aksed in the statement under Section 313, Cr.P.C. to explain those two letters, the grievance has been made that the learned Magistrate has erred in placing reliance on those two letters. Now, it is true that no question under Section 313 Cr.P.C. has been asked about Exhs. 19 & 20 to the opponent but that by itself will not ipso facto vitiate the trial unless it is established that some prejudice was caused to the opponent. It is obligatory on the Court to question the accused on the evidence and circumstances appearing against him so as to apprise him of the exact case he is required to meet, but it is equally obligatory on the accused to point out that non-questioning him about this incriminating circumstance has actually and materially prejudiced him and has resulted in failure of justice (See Suresh Chandra Bahri v. State of Bihar . As in the instant case, the opponent has not pointed out anything which would show that the failure to question him about Exhs. 19 & 20 has in fact prejudiced him. Even reading the entire further statement of the opponent, number of facts have been pointed out to him which included the facts, right from the date of his joining the service and allotment of the flat in question and not vacating the flat even after his resigning. Therefore, I am of the view that broad facts have been placed before him to which he has answered and as such, opportunity has been afforded to him to explain the circumstances. Not only that, on behalf of the applicant, Naresh Parekh has been examined wherein he has produced all the documents including the letters Exhs. 19 & 20 written by the opponent and the said witness has been cross-examined by the opponent, however, nothing has been asked about these two letters to the witnesses. This would show that the opponent has virtually accepted those two letters and since nothing has been asked to the witnesses, I fail to see as to how the opponent is prejudiced if no question is asked in his further statement. Even if those two letters are ignored for the time being, there is enough material on record like his reply Exh. 24 to the letter addressed by the Company Exh. 22 which I have already referred to above. Thus, considering all the facts, in my view, even if nothing has been asked about Exhs. 19 & 20, since the opponent has failed to make out any case of prejudice having been caused to him, the learned Magistrate was justified in placing reliance on Exhs. 19 and 20 which are in fact the admission of the opponent regarding the allotment of the flat in question to him by the applicant-Company. In this view of the matter, the finding recorded by the Lower Appellate Court on this point is erroneous and is, therefore, set aside.
13. Mr. Trivedi, learned Advocate for the applicant has seriously challenged the finding recorded by the learned Addl. City Sessions Judge, Ahmedabad that it is only the Company who can file a complaint and initiate proceedings under Section 630 of the Companies Act and not any officer of the Company without any authorisation from either the Mg. Director or the Board of Directors of the Company. It was submitted by Mr. Trivedi that the action of the complainant-Naresh Parekh in lodging complaint under Section 630 of the Act being ratified by resolution dated 26-9-1988, the complaint was perfectly legal and valid. In the submission of the learned Advocate, the Board of Directors have inherent power to ratify the action of an officer of the Company by subsequently passing resolution. In support of the said submission reliance has been placed in the case of Parmeshwari Prasad Gupta v. Union of India . Mr. Zaveri on the other hand submitted that it is only the Company who can file the complaint and as Naresh Parekh was merely an Accountant of the Company and was not an authorised person, the complaint filed by him is not maintainable. Mr. Zaveri further submitted that the resolution dated 26-9-1988 passed by the Company ratifying the act of Naresh Parekh which was produced at the appellate stage on 7-7-1989 was rightly rejected by the learned Addl. City Sessions Judge, Ahmedabad. In the submission of Mr. Zaveri, as no resolution was passed on the date of filing the complaint, i.e., on 17-9-1987 authorising Naresh Parekh to file the complaint, he had no valid legal authorisation to do so. Mr. Zaveri submitted that ratification cannot be effected when the rights of the third party is already concluded. He has relied on the decision of the Queens Bench in the case of Ford and Ors. v. Newth reported in Law Reports 1901 (1) QB 683. Mr. Zaveri, therefore, submitted that the resolution ratifying the action of Naresh Parekh is prospective as the third parties right is created. Considering the aforesaid submissions two questions arise: (1) Whether there was a valid ratification authorising Naresh Parekh to file the complaint and (2) Whether the learned Addl. City Sessions Judge was justified in refusing to accept the resolution at the appellate stage?
14. In the instant case, on 26-9-1988 the resolution was passed by the applicant-Company resolving that the complaint filed by Naresh Parekh, Senior Officer of the Company under Section 630 of the Companies Act against the Ex-Secretary-M.M. Shah for wrongfully withholding of property on 17-9-1987 be and is hereby ratified and approved. It was further resolved therein that all actions taken by Naresh Parekh consequent to the above complaint be and is hereby ratified and approved. The said resolution was sought to be produced on 6-10-1988 before the learned Addl. City Sessions Judge by an application. It was stated in the said application that at the time of filing the complaint, the Company's management was different, there was a process of change and no objection was raised in final hearing by the accused, and therefore, the authorisation letter was not produced; that by way of abudant precaution and without prejudice to the contentions of the Company, no such authorisation is required under the law, the present Board of Directors of the Company has ratified the action of Naresh Parekh and mat the production of the said document in no way prejudices the accused as the conviction is not based on the same, and therefore, the same may be taken on record. The date of the resolution being dated 26-9-1988 would suggest that the ratified action of Naresh Parekh after the trial Court passed the order of conviction, i.e., on 9-8-1988 and the opponent filed the appeal against the said order on 30-8-1988. The said resolution was produced on 6-10-1988 and the learned Addl. City Sessions Judge rejected the said application on 7-7-1989 be observing that the applicant was all the while in possession of the copy of the resolution and it is sought to be produced at a very late stage in the appeal after the arguments of the learned Advocate for the accused are over and it is certainly likely to prejudice the accused and so production of such document cannot be allowed at this stage. In my view, the learned Addl. City Sessions Judge, has committed an error in rejecting the said application on the grounds stated in the order. Section 391 Cr.P.C. clearly authorises the appellate Court to take evidence even at the appellate stage. The mere fact that the applicant-Company kept the resolution with them and did not produce till the arguments of the accused were over is no ground for refusing the production in order to promote the interest of justice. As can be seen from the averments made in the application for production at the time of filing of the complaint, the Company's management was different and there was a process of change and no objection was raised till the final hearing by the accused and therefore, the authorisation letter was not produced and the same has not been considered by the learned Addl. City Sessions Judge. Apart from this, I fail to see as to what is the prejudice that has been caused to the opponent if the resolution ratifying the act of Mr. Naresh Parekh is placed on record, especially when, the conviction is not based on the said resolution. I, therefore, hold that the learned Addl. City Sessions Judge has committed an error in refusing to accept the resolution dated 26-9-1988 passed by the applicant-Company and the said resolution is required to be accepted as a part of the record. The Supreme Court in Parmeshwari Prasad Gupta v. Union of India has laid down that the Board of Directors can ratify the action which though unauthorised taken earlier and can validate the same and such ratification would always relate back to the date of the act ratified. That was a case where the services of the General Manager of the Company have been terminated by the Chairman of the Board of Directors. It was the case of the appellant in the said case that his services had not been validly terminated by the respondent-Company and that he still continued as the General Manager of the Company and was entitled to recover the sum already mentioned from the respondent. It was the case of the respondent-Company that the Chairman validly terminated the services of the appellant in pursuance to the resolution passed by the Board of Directors and that subsequently the resolution and the action of the Chairman terminating the services had been confirmed by a meeting of the Board of Directors held a week later and therefore, the services of the appellant were validly terminated. The trial Court as well as the High Court rejected the case of the appellant and in the appeal, the Supreme Court has held as under:
The agenda of the meeting of the Board of Directors held on December 23,1953 shows that one item of business was the confirmation of the minutes of the meeting of the Directors held on December 16, 1953. The confirmation of the minutes of the meeting of the Directors held on 16-12-1953 would not in any way show that the Board of Directors adopted the resolution to terminate the services of the appellant passed on December 16, 1953. It only shows that the Board passed the minutes of the proceedings of the meeting held on December 16, 1953. But the resolution of the Board of Directors to confirm the action of the Chairman to terminate the services of the appellant by his telegram and letter dated December 17, 1953, would show that the Board ratified the action of the Chairman. Even if it be assumed that the telegram and the letter terminating the services of the appellant by the Chairman was in pursuance to the invalid resolution of the Board of Directors passed on December 16, 1953 to terminate his services, it would not follow that the action of the Chairman would not be ratified in a regularly convened meeting of the Board of Directors. The point is that even assuming that the Chairman was not legally authorised to terminate the services of the appellant, he was acting on behalf of the Company in doing so, because he purported to act in pursuance of the invalid resolution. Therefore, it was open to a regularly constituted meeting of the Board of Directors to ratify that action which, though unauthorised, was done on behalf of the Company. Ratification would always relate back to the date of the act ratified and so it must be held that the services of the appellant were validly terminated on December 17, 1953. The appellant was not entitled to the declaration prayed for by him and the trial Court as well as the High Court was right in dismissing the claim.
15. In the instant case also, assuming that Mr. Naresh Parekh was not entitled to file complaint as he was not authorised on the date on which he lodged the complaint, the said act by itself cannot invalidate the initiation of the proceedings against the opponent. As held by the Supreme Court in the aforesaid case, the Company is entitled to ratify the action which though unauthorised was done on behalf of the Company and the ratification would always relate back to the date of the act ratified, and therefore, in view of this, I have no hesitation in holding that Mr. Naresh Parekh was competent to file the complaint in view of the resolution passed by the appellant ratifying the act of Mr. Naresh Parekh. Mr. Zaveri further tried to justify the judgment of the Supreme Court in Parmeshwari's case (supra) by contending that in the said case the ratification was made within a week while in the present case, the ratification is made after the judgment passed by the trial Court convicting the opponent. I see no merit in the submission of Mr. Zaveri. Ratification if made within a week or after a long time will not make any difference for the simple reason that if the Company has power to ratify the action which though unauthorised and if such ratification relates back to the date of the act and by ratifying the act, no prejudice is caused, then in my view, it is not open for the opponent to challenge the ratification. It is to be noted that the opponent is convicted independent of the ratification on the basis of the material against him, and therefore, I am clearly of the view that no prejudice, whatsoever, has been caused to the opponent by the action of the Company ratifying the act of the complainant.
16. Turning back to the submission of Mr. Zaveri that the ratification cannot be effected when the right of the third party is decided, I must frankly say, I am not at all impressed with the said submission. If that submission is accepted the provision to ratify the action will be rendered redundant. The decision rendered in the case of Ford and Ors. v. Newth 1901 (1) QB 683 was a case against a town councillor, alleging that his election was void on the ground that, at the date of his nomination, he had an interest in a contract with the council. The respondent in answer to an advertisement, had offered to supply to the council, for twelve months, certain goods at specified prices, and the offer was accepted. Afterwards he applied to a committee of the council to be released from his contract. The committee resolved that, subject to approval by the council, he be released from that date. He was then nominated. After his nomination the council approved the resolution of the committee releasing him and in that connection it was held that the advertisement, tender and acceptance constituted a contract, that the respondent had an interest in the contract, that the ratification, after the respondent's nomination, of the resolution releasing him did not relate back to the date of the resolution, because the interests of persons other than the parties to the contract might be affected, and therefore, the respondent, at the date of his nomination, had an interest in a contract with the council, and was disqualified, and his election was void. I fail to see as to how this judgment will be helpful to Mr. Zaveri as the said case was a case wherein a contract was constituted and the respondent had interest thereto and the respondent was released from the contract by ratification and in that view of the matter, the interest of person other than the parties to the contract was likely to be affected, and therefore, it was held that the respondent had an interest to the contract. The facts of that case cannot be compared with the facts of the present case as by ratifying the earlier illegal act, no right, much less, the right of the third party is affected.
17. Considering the matter from the aforesaid facts and circumstances, I am clearly of the view that the learned Addl. City Sessions Judge has erred in allowing the appeal which has resulted into miscarriage of justice, and therefore, in my view, this is a fit case wherein the Court is entitled to invoke revisional jurisdiction.
18. Before concluding, I would like to observe that in recent time a tendency is developed amongst the ex-employees of the Company to withhold the premises allotted to them while they were in service by raising all sorts of pleas about the tenancy and to initiate civil proceedings and after getting injunction on such pleas, continue possession for long period, may be for years. They simply forget the trust and confidence reposed on them by their employers. They not only commit the breach of trust and confidence of their employers but also put them in an embarassing position with the landlord and drag them to the Court which would not only cause harrassment and inconvenience but financial loss and their precious time. This is nothing but an act of dishonesty on the part of the employees and the present opponent is not an exception to it. Besides, by withholding the premisses, they also block the right to occupy the premises of their successor in service. In view of the discussions hereinabove and in order to have deterrent effect on the similar employees, it is high time that such employees are dealt with seriously as per the provisions of the Act. Hence, the following order:
ORDER This Revision Application is allowed. The judgment and order passed by the learned Addl. City Sessions Judge in Criminal Appeal No. 77 of 1988 is hereby set aside. The judgment and order of conviction passed by the learned Metropolitan Magistrate, Ahmedabad in Criminal Application No. 527 of 1987 is ordered to be restored. It is further directed that the opponent shall hand over the peaceful and vacant possession of the flat in question within four weeks from today and refund the amount paid by the Company towards licence fees to the landlady for all the period of unauthorised occupation, i.e., from the date of acceptance of resignation till the date of handing over possession of the flat by the opponent within six months from today, in default, to suffer S.I. for six months. Rule is made absolute.
Further order:
At this stage, Mr. Zaveri requests for stay of this order. In view of the fact that four weeks time is already granted for handing over the possession of the premises in question, no useful purpose will be served by granting the stay. Hence, the request is rejected.