Delhi District Court
Judgment/Texmaco vs Surender Kumar / Case No.1352/3/10 / ... on 6 March, 2010
1
IN THE COURT OF SH. DIG VINAY SINGH, ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE(SPL. ACTS):CENTRAL:TIS
HAZARI COURTS, DELHI
In re:
M/S TEXMACO LIMITED
BELGHARIA, CALCUTTA,
PROP. OF M/S BIRLA TEXTILES .....COMPLAINANT
VS.
SURENDER KUMAR .....ACCUSED
CASE NO. 1352/3
U/S. 630 OF THE COMPANIES ACT, 1956
DATE OF RESERVATION OF JUDGMENT: 06.03.2010
DATE OF PRONOUNCEMENT OF JUDGMENT: 06.03.2010
JUDGEMENT
(a) The serial no. of the case : 02401R0275892003
(b) The date of commission of offence : On and after 30.11.1996
continuously.
(c) The name of complainant : M/s Texmaco. Ltd.
Registered office at :
Balgheria Calcutta,
and Regional Office at
508, Surya Kiran Building,
Kastoorba Gandhi Marg,
New Delhi110001
(d) The name, parentage, residence: Surender Kumar,
of accused. S/o Sh. Hari Ram,
R/o Q. No.162, Old Birla Lines,
P.O. Birla Lines,
Kamla Nagar, Delhi110007
(e) The offence complained of/ proved : U/s. 630 of Companies Act, 1956
JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 1 of 25 /E 2
(f) The plea of accused : Pleaded not guilty.
(g) The final order : Convicted. (h) The date of such order : 06.03.2010 (i) Brief statement of the reasons for the decision:
1. The complainant, M/s. Texmaco Ltd. filed the present complaint u/s. 630 of the Companies Act, 1956, against the accused, alleging that the complainant company is duly incorporated under the said Act and, the complainant company is the proprietor of Birla Textile Mill, located at Post Office Birla Lines, Kamla Nagar, Delhi. It claims that the complainant company has various employees and housing colonies such as Old Birla Lines, New Birla Lines, Roshanara Building (Shivaji Lines), Birla Lines Officer's Flats and Birla Flats, and Khilona Wala Bagh etc. It claims that these housing colonies are located near the vicinity of the mill and they were allotted to the company's employees for their greater convenience due to exigencies attached with their job and, so that the work of the mill is done effectively. It is also claimed that the complainant company acquired proprietary rights in respect of the mill, as well as, the housing colonies, vide a scheme of arrangement arrived at, between the complainant company and M/s. Birla Cotton Spinning and Weaving Mills Ltd., vide orders of Hon'ble Delhi High Court, dated 03.1.1983, in Company Petition No.59/1982. It is also claimed that pursuant to the said arrangement, all the agreements, more particularly, licence agreement entered between the M/s. Birla Cotton Spinning and Weaving Mills Ltd. with third parties are deemed to be entered between the complainant company and those third parties. The complainant company also acquired all the rights, titles, interest in the properties of the mill and the housing colonies of the mill unit of the said M/s. Birla Cotton Spinning and Weaving Mills Ltd. company without any further act or deed and all the employees of the said mill unit of M/s. Birla Cotton Spinning and JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 2 of 25 /E 3 Weaving Mills Ltd. became the employees of the complainant company pursuant to the said scheme of arrangement.
2. It is further claimed that the accused joined the services of the erstwhile company M/s. Birla Cotton Spinning and Weaving Mills Ltd., on 01.05.1996 and on his request, Quarter No 162, Old Birla Lines, P.O. Birla Lines, Kamla Nagar, Delhi110007, was allotted to him on 28.04.1977 vide allotment letter of even date.
3. It is further claimed that the accused ceased to be in services of Complainant Company from 31111996 and that in terms of orders of Hon'ble Supreme Court of India in Petition No.4677/1985; the working of the mill in Delhi was closed w.e.f. 30.11.1996. It is claimed that therefore the accused was no more in the services of Complainant Company, but despite termination of his employment with the complainant company, the accused was withholding the said quarter, which is contrary to the licence allotment letter executed between the accused and the complainant company. It is claimed that Hon'ble Supreme Court in Writ Petition no.4677/1985 in IA No.36 vide order dated 04.12.1996 observed that the retiring workmen will be entitled to remain in the quarter for a period of 1½ years and, those workers who opt to be relocated at the new site (in this case at Baddi, Himachal Pradesh), will vacate the quarters at Delhi on being offered alternative accommodation at the new place of joining. Hon'ble Supreme Court in the same CWP, in IA No.153 of 1997, vide order dated 19.2.2002 finally observed that the employees residing in the said quarters have no rights and the said IA no.153/1997 was dismissed by Hon'ble Supreme Court. The complainant claims that till today the accused is withholding the said quarter allotted to him on licence basis and thereby he commits offence u/s.630 of the Companies Act, 1956.
JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 3 of 25 /E 4
4. On the above complaint being filed, the accused was summoned, and thereafter a notice for the offence of section 630 of The Companies Act 1956, was served upon the accused in terms of Section 251 Cr.P.C to which the accused claimed trial.
5. In support of its case, complainant examined only one witness i.e. PW1 Sh. Radhey Shyam Sharma, who deposed that he is power of attorney holder of the complainant company and duly authorized 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 also proved the certificate of incorporation Ex. PW1/3 and also deposed that the accused was allotted the said quarter vide allotment letter Ex. PW1/5 after he joined the services M/s. Birla Cotton Spinning and Weaving Mills Ltd. He also proved order of Hon'ble Delhi High Court in Company Petition No.59/1982 dated 03.1.1983 vide which scheme of arrangement, all the rights, titles, interest, properties, assets and liabilities as well as the employees of the said mill unit of M/s. Birla Cotton Spinning and Weaving Mills Ltd., became that of the complainant company. He further deposed that the accused ceased to be the employee of complainant company w.e.f.30.11.1996. He also deposed that the accused was liable to vacate the quarter but he failed to do so even after request made. Despite cross examination of PW1 nothing material could be brought out on record in order to impeach the credit worthiness or trust worthiness of this witness.
6. After examination and closing of prosecution evidence, all the incriminating evidence against the accused was put to the accused in his examination u/s.313 Cr.P.C read with section 281 Cr.P.C. In his statement, when the Power of Attorney, resolution and the certificate of incorporation of the complainant company was put to the accused, the accused admitted all the three documents as to be correct. When the accused was questioned about document Ex. PW1/5 i.e. the allotment letter, on the JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 4 of 25 /E 5 basis of which the quarter was given to him as licensee, the accused also admitted this document. The accused has admitted the scheme of arrangement as a matter of record. Accused claimed that he has not been paid compensation by the company as per judgment of Hon'ble Supreme Court and his dues have not been settled, therefore, he was not liable to vacate the quarter. The accused also claimed that the complainant has no right to file the present complaint.
7. The accused although opted to lead defence evidence but he did not examine any defence witness despite opportunity.
8. Section 630 of the Companies Act, 1956 provides as under;
"(1) If any officer or employee of a company
(a)wrongfully obtains possession of any property of a company; or
(b)having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorized by this Act, He shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to [ten thousand rupees].
(2) The Court trying the offence may also order such officer or employee to deliver up or refund, within a time to be fixed by the Court, any such property wrongfully obtained or wrongfully withheld or knowingly misapplied, or in default, to suffer imprisonment for a term which may extend to two years."
9. It is settled law that the scope of inquiry in a proceedings u/s 630 is extremely restricted in law and the case is to be confined within those narrow ambit's without permitting any delay. The provision contained in Section 630 has been purposely enacted by the legislature with the object of providing a summary procedure for JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 5 of 25 /E 6 retrieving the property of the company. It is the duty of the Court to place a broad and liberal construction on the provision in furtherance of the object and purpose of the legislation which would suppress the mischief and advance the remedy. In Atul Mathur v. Atul Kalra and another, 1989 (4) SCC 514, it was held that the purpose of enacting Section 630 is to provide speedy relief to a company when its property is wrongfully obtained or wrongfully withheld by an employee or an exemployee.
10. IN, 1993 CRI. L. J. 2791 "K. G. K. Nair v. P. C. Juneja" HIGH COURT It is held that, " The provisions of S. 630 are intended to provide speedy and efficacious redress in cases where company's property is wrongfully withheld ........................... ...............................
(b) ........................ 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. "
In the case of S. K. Sarma v. Mahesh Kumar Verma AIR 2002 SUPREME COURT 3294 = 2002 AIR SCW 3827 the case pertained to Section 138 of the Railways Act which is 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 books, papers and any other matters. This would mean that the Section embraces in its sphere all unlawful detention of any railway property by the railway servant............................... The word 'discharge' used in context is of JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 6 of 25 /E 7 widest amplitude and would include cessation of relationship of employer and employee, may be by retirement, resignation, dismissal or removal. This Court in Union of India v. B.N. Prasad [(1978) 2 SCC 462] considered Section 138 and held that a close perusal of the section clearly reveals that the provision has widest amplitude and takes within its fold not only a railway servant but even a contractor who is engaged for performing services to the railway, and the termination of his contract by the Railway amounts to his discharge, as mentioned in Section 138. The Court also observed that the said provision is in public interest and must be construed liberally, broadly and meaningfully so as to advance the object sought to be achieved by the Railways Act.............."
11. The complainant company is registered under the Companies Act. It is so proved by the certificate of incorporation exhibit PW 1/3, which is admitted by the accused in his statement. The accused also admitted the Power of Attorney and resolution. The accused even admitted the document Ex. PW1/5 i.e. the allotment letter, on the basis of which the quarter was given to him as licensee. The accused has admitted the scheme of arrangement as a matter of record. In the entire cross examination of PW1 Radhey Shyam Sharma, the accused did not deny his signature on Ex. PW1/5. Ex. PW1/5 which is an allotment letter clearly reveals that the property in question was given to him on licence only and not as a tenant. Ex. PW1/5 clearly reveals that the quarter in question was allotted to the accused only by the virtue of his employment with the company and which he was to retain only till continuation of his services, which condition itself makes it a licence and not tenancy. Documentary evidence is always a better piece of evidence then the oral testimonies. This document does prove that that quarter was allotted the accused by the company. Perusal of the document would also reveal that the it was allotted to the accused by virtue of his employment with the company and he was to retain it till his services with the JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 7 of 25 /E 8 company. It is not denied by the accused that the company was deducting monthly charges towards occupation of this premises. Had the accused not signed the document consciously, there was no occasion for him to have paid the monthly charges for occupying the quarter to the company for considerably long period. It is not denied by the accused that he was an employee of M/s. Birla Cotton Spinning and Weaving Mills Ltd. The employees and the properties of the company pertaining to the textile unit located at Delhi stood transferred to the complainant company by virtue of Ex. PW1/4. Accordingly, the complainant company acquired this property in question. I have also mentioned above that Birla Textile was nothing but a textile unit which along with property was acquired by the complainant. The document Ex. PW1/5 clinches the entire issue and it is clear that the property in question was given to the employee/accused as a licensee. Even otherwise, after the date of termination of the services of accused, admittedly, no amount has been paid by the accused to the company till date. It is nobody's case that the accused deposited the rent with the company after that day or in case the company did not accept the same, he deposited the rent with the Rent Controller. This fact also belies the possible contention of accused that he was a tenant. There is no denial by the accused that he is still holding the said quarter till date. These facts are sufficient to prove the case of complainant beyond doubt in a proceedings u/s.630 of the Companies Act 1956.
12. Accused claimed that he has not been paid compensation by the company as per judgment of Hon'ble Supreme Court and his dues have not been settled, therefore, he was not liable to vacate the quarter. The accused also claimed that the complainant has no right to file the present complaint. The accused had appropriate remedies in law if dues and compensation was not paid to the accused by the company but that cannot be aground to withhold the property of the company. Therefore, this fact is very clear that the quarter in question was allotted to the accused by M/s. Birla Cottons Spinning and JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 8 of 25 /E 9 Weaving Mills Ltd. There is no denial by the accused that he is still holding the said quarter till date.
13. It is argued that the complainant company has no locus standi to file the present complaint and that it was M/S Birla Cotton Spinning and Weaving Mills Ltd. only which could have filed the present proceedings against the accused.
This argument is absolutely without any force. As mentioned above the present complainant company acquired all the property rights, interests etc. in the mill unit of the said M/S Birla Cotton Spinning and Weaving Mills Ltd., vide a scheme of arrangement passed by the Hon'ble Delhi High Court and proved as Exhibit PW1/4. Perusal of the said document reveals that on page 5 in the order of petition, it is specifically written as follows.
" a) That all the property, rights, and powers of the said transferor company specified in the first , second and third parts of the Schedule II hereto and all the other property, rights and powers of the said transferor company be transferred without further act or deed to the said transferee company and accordingly the same shall, pursuant to section 394(2) of the Companies Act, 1956, be transferred to and vest in the said transferee company for all the estate and interest of the said transferor company therein but subject nevertheless to all charges now affecting the same, and
b) That all the liabilities and duties of the said transferor company by transferred without further act or deed to the said transferee company and accordingly the same shall , pursuant to section 394(2) of the Companies Act , 1956, be transferred to and become the liabilities and duties of the said transferee company: and
c) That all proceedings now pending by or against the said transferor company be continued by or against the said transferee company; and
d) All contracts, deeds, bonds, agreements and instruments of whatever kind or nature relating to the said units of Birla Cotton shall continue to be in full force JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 9 of 25 /E 10 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.
Accordingly it is very clear that the complainant company became the owner of all the property, rights and powers in the mill unit of the transferee company without any further act or deed and the same stood transferred and vested with the complainant company for all the estate and interest. By virtue of the said scheme of arrangement, the complainant company became owner of the property in question and therefore the complainant company has every right to prosecute this complaint.
14. The next contention raised by the accused is that the power of attorney and resolution in favour of the complainant is not proved in accordance with law and the power of Attorney in favour of the complainant is defective as it does not comply with the provisions of Statutes.
Again all these contentions are without any force. Section 85 of the Indian Evidence Act clearly provides that once there is a duly notarized power of attorney, than it shall be presumed to be true, unless the contrary is proved. The expression used is 'shall presume' which shows that the section is mandatory and the Court has to presume that all necessary requirements for the proper execution of the power of attorney were duly fulfilled before the notary public. It is noticed that the power of attorney on record is legally and properly notarized and it fulfills all the ingredients of section 85 of the Indian Evidence Act. The accused has not produced any evidence to disprove the power of attorney of the company. No objection was raised at the time when these documents were being exhibited in evidence as to its mode of proof.
In the case of Jugraj Singh v. Jaswant Singh AIR 1971 SUPREME COURT 761 before a three judge bench of Hon'ble Supreme court it was argued, that to invoke S. 85 of the Indian Evidence Act, which provides that a Court shall presume that every document purporting to be a power of attorney and to have been executed before JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 10 of 25 /E 11 and authenticated by a Notary Public was duly executed and authenticated, that authentication of the power of attorney had to be in a particular form, and that it was not sufficient that a witness should have signed the document, be he a Notary Public or any other. It was argued that, it ought to have been signed by the persons named in S. 85 and should have been authenticated properly. It was argued that the authentication should have shown on its face that the Notary Public had satisfied himself that executor was the real person who had signed the power of attorney before him and the power of attorney was invalid, because it did not show on its face that the Notary Public had satisfied himself that it was Mr. X who executed the document.
It was held by Hon'ble Supreme Court, that the power of attorney does show that it was executed before a proper Notary Public who complied with the laws of California and authenticated the document as required by that law. Supreme Court was also satisfied that the Power of attorney is also duly authenticated in accordance with our laws. Negating the contention that the Notary Public did not say in his endorsement that Mr. X had been identified to his satisfaction, it was held that;
"But that flows from the fact that he endorsed on the document that it had been subscribed and sworn before him. There is a presumption of regularity of official acts and we are satisfied that he must have satisfied himself in the discharge of his duties that the person who was executing it was the proper person." The power of attorney was held to be a valid document.
In the case of M/s. Northland Traders and others v. Bank of Baroda AIR 1994 ALLAHABAD 381 it is observed as follows:
" 11. .........................., it would also be presumed that the person executing the power of attorney on behalf of a corporate body was competent to do so. In the present case Sri M.K. Bose had executed the power of attorney in favour of K.N. Pandey which was duly authenticated by a notary public as mentioned in Section 85. The JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 11 of 25 /E 12 Court is, therefore, bound to presume that the power of attorney was duly executed and authenticated. This presumption, however, is a rebuttable presumption and it was open to the defendants to challenge the authority of the attorney or to prove that the power of attorney was invalid or that the person acting on the basis of such power of attorney was not duly authorized. No such evidence has come from the side of the defendants. On the contrary PW. 1 K.N. Pandey had deposed that (sic)the Senior Branch Manager and was authorized to sign and verify the plaint and to file the suit. There being no evidence in rebuttal the court below was, therefore, justified in holding that K.N. Pandey was authorized to sign and verify the plaint."
In the case of Citibank N.A., New Delhi, Plaintiff v. Juggilal Kamlapat Jute Mills Co. Ltd., Kanpur, Defendant. AIR 1982 DELHI 487 it was held that execution of power of attorney by a Bank's Executive Officer and Cashier delegating certain powers to one employee of that Bank and Document bearing Bank's seal and attested by Notary Public raises a presumption that power of attorney is executed by the Bank. Presumption that the officers executing the document had authority to execute it on behalf of the Bank also arises. Word "person" in Section 85 includes legal person. Paras 17, 18, 19, 20, 22, 28).
Similarly in the case of Smt. Kulsumunnisa, Appellant v. Smt. Ahmadi Begum and others, Respondents. AIR 1972 ALLAHABAD 219 (V. 59 C 58) ( Division Bench ) : and in the case of Yogesh Singh Sahota, Petitioner v. Niranjan Lal Gupta, Respondent. AIR 1981 DELHI 222 . it is held, that a Power of attorney along with verifications are to be presumed to be true u/S.85.
In the case of Kamla Rani and Ors. v. M/s. Texmaco Ltd. AIR 2007 DELHI 147 which was a case of this very complainant on the same facts , it was one of the contention, of the employee, before High Court that the eviction petitions were not filed under a proper authorization. It was held that;
JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 12 of 25 /E 13 " 33. Authentication by a notary public is a solemn act performed by the notary public whose duty is to ensure that the executant is the person before him and is identified to his satisfaction. Once a document is authenticated by a notary public, it will be presumed that the document was duly executed and was in order. The use of the expression 'shall presume' shows that the section is mandatory and the Court has to presume that all necessary requirements for the proper execution of the power of attorney were duly fulfilled before the notary public. As observed in AIR 1984 (363) (sic) M/s. E. C. and E.Co. Ltd. v. M/s. J. E. Works, if two conditions are satisfied, firstly the power of attorney being executed before a notary public and secondly it being authenticated by a notary public, a presumption would arise under Section 85 about the executant of the power of attorney.
34. Onus would thus lie on the opposite party to prove to the contrary.
35. It is well settled that authentication would mean more than mere execution. Where proof of authentication surfaces, benefit of Section 85 has to be granted.
36. No negative evidence has been brought on record, none has been shown to me by the petitioners.
37. The purpose of Section 85 of the Evidence Act appears to be that a duly executed and authenticated power of attorney can be proved under Section 85 without undue expenses to be incurred by producing the executant thereof or the original board resolution.
38. The reason is obvious. Banks, insurance companies and multinational companies empower officers to institute and file suits on their behalf. Large number of suits are filed by these organizations. If the original board resolution or the executant of the power of attorney has to submit itself/himself before the Court as a sine qua non to prove the power of attorney, practical difficulties would arise and unnecessary expenses JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 13 of 25 /E 14 would be incurred by the organizations to prove the document in the aforenoted manner.
39. I am in full agreement with the view taken by the learned Rent Control Tribunal that the authority of the person who had signed and verified the petition as also instituted the eviction petition stood duly proved by means of production of the authenticated and notarized power of attorney bearing the seal of the notary public.
40. Decision of the Supreme Court reported as AIR 1997 SC 3 Union Bank of India v. Naresh Kumar is additionally relied upon by me. The said decision states that where a suit has been filed on behalf of a corporate body and is duly prosecuted by the person who had filed the suit, a presumption would arise that the person concerned was authorized to do so."
15. It is next argued that the order of honorable Delhi High Court dated 3rd January 1983 regarding the scheme of arrangement is not complete and not binding on the accused since they were not party to it and accused did not give his consent in the said proceedings. The next contention raised by the accused is that the mandatory directions mentioned in the order dated 3rd January 1983 by honorable Delhi High Court has not been complied with by the complainant as the necessary proceedings before Calcutta High Court has not been conducted. It is claimed on behalf of accused that the scheme of arrangement of Delhi High Court dated 03.1.1983 was not complete as the approval of Calcutta high Court was not obtained nor the copies were delivered to the Registrar of Company.
Whether the accused was a party to the said proceedings or not is immaterial. The judgment of honorable Delhi High Court is indeed binding and it was also relied upon in the case of Kamla Rani's case as mentioned above. JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 14 of 25 /E 15
16. Similarly the contention that the property in question does not form part of the said scheme is baseless for the said reason.
17. It is next argued that the certificate of incorporation has not been produced in original and the certificate of incorporation consequent upon change of name of company cannot be taken as admissible evidence. This contention is against section 35 of The Companies Act 1956, which clearly provides that a certificate of incorporation given by the registrar in respect of any association shall be conclusive evidence that all the requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto and that the association is a company authorized to be registered and duly registered under this Act.
18. The next contention raised by the accused is that the application for allotment of house has not been proved.
Whether the quarter in question was allotted to the accused on his application or without his application is immaterial for decision in the present proceedings and all that is required to be proved in this case is that the accused was allotted the quarter in question by virtue of his employment with the company. It is proved that the quarter in question was allotted to the accused by the company solely on the ground that the accused was an employee of the company and therefore the accused is a licensee and there was no need to prove application for allotment given by the accused.
19. The next contention raised is that the accused is a tenant and not a licensee. I have already mentioned above that the contents of the allotment letter clearly stipulate that the accused is a licensee and not a tenant. No rent agreement has been proved by the accused in his favour to show that he was a tenant. The conditions mentioned in the exhibit PW1/5 indeed reveals that the accused was a licensee. JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 15 of 25 /E 16
20. It is next argued that even if the accused is taken to be a licensee still no notice of termination has been given to him and therefore he cannot be prosecuted.
Again this contention is misfounded. Under section 630 of The Companies Act 1956 there is no requirement of law to give any notice of termination of licence or even any notice separately regarding termination of the services. The fact that the property is given to an employee by virtue of his being in employment of a company which he wrongfully withholds is sufficient to bring the case within the ambit of section 630 of The Companies Act 1956.
21. It is argued that the complainant is not the owner of the premises and thus cannot maintain these proceedings.
Here it would be relevant to note of what is stated in Section 116 of the Evidence Act. The same reads as follows:
Section 116 "Estoppal 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 tenancy, be permitted to deny that the landlord of such tenant had, at the beginning of the tenancy, a title to such immovable property; and 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 when such licence was given."
In the case of Bilas Kunwar v. Desraj Ranjit Singh, (AIR 1915 Privy Council at p. 98), the Privy Council observed as follows :
"A tenant who has been let into possession cannot deny his landlords title, however, defective it may be, so long as he has not openly restored possession by surrender to his landlord." (Emphasis supplied).
In the case of Bansraj Laltaprasad Mishra v. Stanley Parker Jones AIR 2006 SUPREME COURT 3569 = 2006 AIR SCW 1073 it is observed as follows : JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 16 of 25 /E 17 " 14. .................... a person who comes upon any immovable property by the license of the person in possession thereof, shall not be permitted to deny that such person had title to such possession at the time when such license was given.
15. The underlying policy of Section 116 is that where a person has been brought into possession as a tenant by the landlord and if that tenant is permitted to question the title of the landlord at the time of the settlement then that will give rise to extreme confusion in the matter of relationship of the landlord and tenant and so the equitable principle of estoppal has been incorporated by the legislature in the said section.
16. The principle of estoppal arising from the Contract of tenancy is based upon a healthy and salutary principle of law and justice that a tenant who could not have got possession but for his contract of tenancy admitting the right of the landlord should not be allowed to launch his landlord in some inequitable situation taking undue advantage of the possession that he got and any probable defect in the title of his landlord. It is on account of such a contract of tenancy and as a result of the tenant's entry into possession on the admission of the landlord's title that the principle of estoppal is attracted.
17. Section 116 enumerates the principle of estoppal which is merely an extension of the principle that no person is allowed to approbate and reprobate at the same time.
18. As laid down by the Privy Council in Krishna Prasad Lal v. Barabani Coal Concern Ltd. (AIR 1937 P.C. 251) , "It (Sec. 116) deals with one cardinal and simple estoppal and states it first as applicable between landlord and tenant and then as between licensor and licensee, a distinction which corresponds to that between the parties to an action for rent and the parties to an action for use and occupation".
To the same effect is judgment in Sheikh Noor and another v. Sheikh G. JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 17 of 25 /E 18 S. Ibrahim (dead) by LRs AIR 2003 SUPREME COURT 4163= 2003 AIR SCW 3784.
K. Sarma v. Mahesh Kumar Verma (supra) It was
In the case of S.
observed that,
" 13. Further, the contention of the learned senior counsel for the respondent that the railway administration has to prove that the property in question was belonging to it before invoking Section 138 is totally misconceived because once it is admitted that respondent was given possession of the premises in question by order dated 1711967 as he was entitled for the same while working as CPRO of the Department, he could not be permitted to deny the title of the railway administration. Admittedly, respondent was inducted because he was in railway service. Now, he is estopped from challenging the title of the appellant over the premises in question. For this purpose, we would refer to Section 116 of the Evidence Act....."
"14. Second part of the aforesaid section clearly provides that no person who came upon any immovable property by the license of the person in possession thereof shall be permitted to deny the title to such person to such possession of the property. He cannot deny the same during the pendency of such license or sublease. Such estoppal continues to operate so long as licensee or subtenant has not openly restored possession by surrender to such person. This rule of estoppal would cease to operate only after such licensee or subtenant has been evicted. This position does not require reference to many judgments. However, we would refer to the decision in S. Thangappan v. P. Padmavathy [(1999) 7 SCC 474] in which the appellant tenant who was running an automobile workshop since 1962 disputed the title of respondent landlady on the ground that certain Devasthanam was the actual landlord. This Court held that Section 116 of the Evidence Act, 1872 puts an embargo on a tenant of an immovable property, during the continuance of his tenancy to deny the title of his JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 18 of 25 /E 19 landlord at the beginning of his tenancy. The significant words under it are 'at the beginning the tenancy'. So a tenant once inducted as a tenant by a landlord, later cannot deny his landlord's title. However, defective the title of such landlord may be, such tenant cannot deny his title."
It was also held that "16. In this view of the matter, respondent cannot be permitted to contend that property was not belonging to the railway administration. Whether the railway administration is owner, mortgagee, lessee or licensee is not required to be decided in such proceedings at the instances of sublessee or licensee of railway administration."
In the case of Vashu Deo v. Balkishan [(2002) 2 SCC 50]= AIR 2002 SC 569 : 2002 AIR SCW 152 it is held thus: ".... ..... The rule of estoppal so enacted has three main features; (i) the tenant is estopped from disputing the title of his landlord over the tenancy premises at the beginning of the tenancy; (ii) such estoppal continues to operate so long as the tenancy continues and unless the tenant has surrendered possession to the landlord; and
(iii) Section 116 of the Evidence Act is not the whole law of estoppal between the landlord and tenant. The principles emerging from Section 116 can be extended in their application and also suitably adapted to suit the requirement of an individual case........
"
22. In the case of Kamla Rani and Ors. v. M/s. Texmaco Ltd. (Supra) it was held as follows:
" 25. Ownership is not relevant for the reason a person may be a landlord without being an owner.
26. A company may take a premises on a 30 year lease from the owner with a permission to induct its employee as a tenant/subtenant. Such an employee to JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 19 of 25 /E 20 whom the said permission is allotted would be a tenant under his company and the allotment would be pursuant to his employment. Such an allottee cannot resist the eviction, if otherwise grounds are made out.
27. Even otherwise, under the directions of the Supreme Court, 68% land had to be handed over to DDA for being maintained as open area. DDA has not become the owner of the said land. Ownership would vest in DDA when possession is handed over.
28. It would be the obligation of the company to evict its tenants including heirs of the tenants and hand over possession to DDA.
29. But, I rest my decision on firmer grounds. A tenant who accepts a person as his landlord is estopped from questioning the title of his landlord.
30. The petitioners are therefore estopped from questioning the title of M/s. Texmaco Ltd. for the reason either they or their predecessorininterest were inducted as a tenant by the predecessorininterest of M/s. Texmaco Ltd."
23. It is next argued that M/s Birla Cottons Spinning and Weaving Mills is still in existence and Birla Textile Mills shifted to Baddi and no officer of M/s Birla Cottons Spinning and Weaving Mills asked the accused to vacate the quarter. By virtue of the scheme of arrangement, what was acquired by the complainant was a unit of said company i.e. M/s Birla Cottons Spinning and Weaving Mills and not the company M/s Birla Cottons Spinning and Weaving Mills, itself. Therefore even if the company M/s Birla Cottons Spinning and Weaving Mills still exits, the rights of the complainant does not get effected in the unit so taken over by virtue of the scheme of arrangement by orders of Delhi high court.
24. It is next argued that appointment letter of PW1 is not proved to show that he is in any manner connected with the complainant company. JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 20 of 25 /E 21 This argument is without any force. I have already mentioned above that the attorney and resolution in favour of PW1 stands proved in terms of section of 85 of the Indian Evidence Act and in such circumstances , there is no requirement of law that an attorney has to be an employee of the complainant company.
25. It is next argued that PW1 is not a 'principle Officer' in terms of section 5 and section 2 (30) of the Companies Act 1956.
Law does not require that an attorney through whom a complaint is filed has to be any such officer. Section 2(30) merely defines the word 'officer' for the purposes of this Act and section 5 merely talks about an 'officer who is in default'. These provisions are not applicable in the present case.
26. It is next argued that section 9 of the companies Act 1956 provides that the provisions of this Act shall have effect notwithstanding anything contrary contained in memorandum or articles of a company or any agreement or resolutions.
This provision is not applicable in the fact of this case.
27. It is next argued that the memorandum and articles of association of the complainant company and the minutes book are not proved.
Again for the decision of the present proceedings none of those documents were required. It may be mentioned here that at the time when the power of attorney and resolution in favour of complainant was proved as ExPW1/1 and PW1/2, the accused did not raise any objection as to the mode of proof of those documents and therefore, in view of the judgment of Hon'ble Supreme Court in the case of (2003) 8 SCC 752 B, the accused cannot challenge the proof of those documents, nor its admissibility can be challenged at this stage.
JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 21 of 25 /E 22
28. It is next argued that necessary stamp duty was not paid by the company regarding transfer of assets and therefore the scheme of arrangement is not admissible u/s 35 of the Indian Stamp Act.
Again this argument is without any force. The scheme of arrangement proved as ExPW1/4 clearly mention that it shall be effective without any act or deed by the parties and as quoted above.
29. It is next argued that the letter of allotment of quarter is not on the letterhead of the company, nor it bears rubber stamp /common seal and, it also does not show the competency and identity of the persons who signed the same. It is also claimed that the signatory of said allotment letter never appeared in the court. It is also argued that two witnesses have not attested it.
There is no requirement of law that an allotment of a quarter /residential accommodation by a company to its employee has to be on the letterhead of the company or bearing stamp or seal of the company. Similarly when this documents Ex. Pw1/5 was proved by PW1, no objection was raised by the accused as to its mode of proof and therefore, in view of the judgment In the case of (2003) 8 SCC 752 B mentioned above this objection cannot be raised at this stage. Needless to mention that the accused admitted the allotment and his signatures on this document. It is next argued that the allotment letter Ex.PW1/5 is a photocopy or stencil copy and it is not original.
This is factually incorrect. Ex. PW1/5 bears signature of the accused and company official and, therefore, it is original.
30. It is also argued that Ex. PW1/5 shows certain blank spaces which were not initialed after filling up the same.
JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 22 of 25 /E 23 Merely because the name of accused , the property no. and the location of the property with date, on Ex. PW1/5 was filled up in hand whereas , remaining portion is typed , does not make it inadmissible by itself specially when signature on it are admitted by the accused. Similarly the arguments that site plan of property is not produced is without any force.
31. It is next argued that the scheme of arrangement passed by Hon'ble Delhi High Court Ex. Pw1/4 was not registered under the Indian Registration Act and, therefore, it is inadmissible u/s 49 of the Registration Act. There is no requirement of law that such a scheme of arrangement passed by Hon'ble Delhi High Court is required to be registered under the Registration Act.
32. It is next argued that there is no privity of contract between the accused and the complainant. There is no requirement of it also as the property vested with the company due to the scheme of arrangement Ex. PW1/4 and the accused also became its employee.
33. It is next argued that no notice of termination of service or notice to vacate the quarter was served upon the accused. Again this is not required for maintaining the proceedings u/s 630 of the Companies Act 1956.
34. It is next argued that the documents proved on record are merely photocopies and originals were not produced. So far as the argument of not filing original documents is concerned , it is noticed that certified copies of Ex. PW1/3, Ex. PW1/4 is filed on record. Similarly original letter Ex. PW1/5 is filed on record. So far as Ex. PW1/1 and PW1/2 are concerned indeed its photocopies are filed. Admittedly there are number of cases filed by the complainant. Complainant cannot be expected to file JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 23 of 25 /E 24 originals in one case. It would be required by the complainant in other cases also. Even otherwise the accused cannot raise this objection now at final stages since the exhibiting of these documents were not opposed at the time of its proof during the evidence of the complainant. In the case of (2003) 8 SCC 752 B discussing the stage at which the objection as to admissibility can be raised it is held by Hon'ble SC as follows;
"such objections can be classified as,
(i) objection that the document sought to be proved is itself inadmissible, and
(ii) Objection directed not against the admissibility of the document but against the mode of proof thereof on the ground of irregularity or insufficiency.
Objection under the category (i) can be raised even after the document has been marked as exhibit or even in appeal on revision. But the objection under category (ii) can be raised when the evidence is tendered but not after the document has been admitted in evidence and marked as an exhibit. In the present case the ledger of books and photo state copies of the order in question and of the rent agreement were admitted in evidence by the trial court without any objection from the opposite side. Therefore, the objection raised before High Court in second appeal that in the absence of the deceased maker of the entries in the ledger of books and in the absence of production of the originals the said document ought not to have been admitted, fell under the category (ii) and High Court erred in upholding that objection in appeal."
In the present case no such objection was raised at the time when these documents were proved and exhibited by the complainant in its evidence and thus this objection cannot now be entertained.
35. Lastly it may be mentioned that almost all the points of arguments raised here were also raised in the case of Kamla Rani and Ors. v. M/s. Texmaco Ltd. AIR 2007 JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 24 of 25 /E 25 DELHI 147 which was a case filed of this very complainant on the same facts , invoking Section 14(1)(i) and Section 22 of the Delhi Rent Control Act, 1958. All the contentions were rejected by Hon'ble Delhi High Court.
36. Accordingly the complainant has succeeded in proving its case against the accused beyond reasonable doubt and the accused is found guilty and thus convicted for the offence u/s 630 of The Companies Act 1956.
ANNOUNCED IN OPEN COURT ON 06th March 2010 (DIGVINAY SINGH) ADDITIONAL CHIEF METROPOLITAN MAGISTRATE SPECIAL ACTS, CENTRAL, TIS HAZARI COURTS DELHI JUDGMENT/Texmaco Vs.Surender Kumar / CASE NO.1352/3/10 / U.S.630 of Companies Act, 1956//DATED 06.03.2010/Convicted/Page 25 of 25 /E