Delhi District Court
Ct. Cases/2929/2017 on 14 July, 2022
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IN THE COURT OF ANURAG THAKUR
ADDL. CHIEF METROPOLITAN MAGISTRATE (Spl. Acts)
CENTRAL, TIS HAZARI COURTS, DELHI
Re: National Insurance Company Ltd. v. Anupama Beniwal & Anr.
U/s. 452 of The Companies Act, 2013
CC No. : 2929/2017
CNR No. : DLCT02-005870-2017
Date of Institution : 02.04.2016
Name of the complainant : National Insurance Company
its registered office Ltd. National Legal Vertical,
2E/9, Jhendawalan Extension,
New Delhi-110055
Through its Administrative
Officer (legal)
Name of accused : (i) Anupama Beniwal
and their residential address w/o Satish Kumar Beniwal
3/108, Pal Mohan Apartments,
Punjabi Bagh,
New Delhi-110026
(ii) Shreshth Beniwal
s/o Satish Kumar Beniwal
3/108, Pal Mohan Apartments,
Punjabi Bagh,
New Delhi-110026
Offence complained of : U/s 452 Companies Act, 2013
(S. 630 Companies Act, 1956)
Date of Judgment : 14.07.2022
Plea of accused : Not guilty
Final Judgment : Convicted
Brief facts and reasons for decision of the case:-
1.Succinctly stated, case of the complainant is that it is a company engaged in the business inter-alia, of providing General Insurance related services. One Satish Kumar Beniwal was employed with the complainant and was lastly posted as Deputy Manager, Divisional Office-V, Rajendra Place, New Delhi and he died on 27.10.2014. He CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.
2of12 was allotted an official accommodation by the company and after his death as per the applicable norms, the official accommodation ought to have been vacated by the occupants after one month of date of cessation of employment. A request for extension of time to retain official company accommodation was made by the occupants/ accused but the same was considered and declined by the complainant and a communication dated 26.11.2014 to this effect was sent to the accused. The one month time elapsed but the accommodation was not vacated by the accused persons. A notice dated 17.09.2015 was sent to the accused persons thereby requesting them to hand over the vacant peaceful possession of the official accommodation to the company. It is alleged that the accused persons are illegally residing in and occupying the premises bearing no. 3/108, Pal Mohan Apartments, Punjabi Bagh, New Delhi. Hence, the present complaint u/s 452 of The Companies Act, 2013 (hereinafter referred to as 'the Act'). The present complaint is filed through Sh. Raghunath Panwar, Administrative Officer (Legal) by the complainant.
2. Pre-summoning evidence was recorded wherein the complainant examined only one witness i.e. CW-1 Raghunath Panwar. Vide order dated 18.07.2017 accused persons were summoned. On 19.12.2017 notice of accusation u/s 251 of The Code of Criminal Procedure, 1973 (hereinafter referred to as Cr.P.C) for offence punishable u/s 452 of the Act was served upon the accused persons to which they pleaded not guilty and claimed trial. Thereafter, the complainant was given opportunity to lead post-notice evidence to substantiate the allegations made. The complainant examined only one witness i.e. Raghunath Panwar in post-notice evidence.
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3. CW-1 Raghunath Panwar testified that he worked in the complainant company since 02.06.2014 as Administrative Officer (Legal). He claimed that he was competent to file this complaint in terms of the Power of Attorney placed on record. He stated that Sh. Satish Kumar Beniwal was employed with the complainant company and was lastly posted as Dy. Manager, Divisional Office-V, Rajendra Place, New Delhi when he expired on 27.10.14. He also deposed that Sh. Beniwal was alloted a company owned official accommodation at Flat no. 108/3, Pal Mohan Apartments, Punjabi Bagh, New Delhi- 110026 in connection with his employment and the same was required to be vacated at the time of superannuation and the same was also required to be vacated when the employee expires or is transferred. He relied upon a copy of the property tax receipt for the aforesaid property. He stated that notices dated 17.09.15 and 01.12.15 were sent to the accused persons and reply dated 22.12.15 of accused was received. He testified that the complainant issued another notice dated 10.03.16, however, accused had not replied to the said notice and thereafter the present complaint was filed. He stated that the accused persons had not vacated the premises.
4. The complainant evidence was closed on 23.07.2019. Statements of the accused persons u/s 313 Cr.P.C were recorded on 26.07.2019. The accused persons examined only one witness i.e. DW-1 Rajpal, Judicial Assistant, Record Room, Civil (Central), Tis Hazari Courts, in support of their defence and the defence evidence was closed on 25.03.2022. Final arguments in the matter were concluded on 04.06.2022.
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5. Ld. Counsel for the complainant submitted that the cogent oral and documentary evidence has been placed on record. He claimed that the testimony of CW-1 is consistent and trustworthy as the same has withstood the lengthy and rigorous cross-examination. He stated that the accused persons have no justification, whatsoever for remaining in occupation of the premises in question and the case against them is proved beyond a shadow of doubt. He prayed that the accused persons be convicted of the offence u/s 452 of the Act.
6. Per-contra, ld. Defence Counsel submitted that the AR of the complainant is not duly authorized to file the complaint. He pointed out that the complaint no where mentions the property number of the accommodation alloted to Satish Beniwal. He claimed that no allotment letter has been placed on record to show that the property in question was allotted to Satish Beniwal. He submitted that the complainant has no title over the property and it had illegally retained the terminal benefits of Satish Beniwal. He claimed that the documents adduced in evidence have not been proved. He also claimed that the complainant has miserably failed to prove the case against the accused persons and he demanded that the accused persons be acquitted of the offence u/s 452 of the Act. Written submissions were filed on behalf of the accused persons to buttress the arguments advanced.
7. Before adverting to decide the rival contentions, it is apposite to reproduce in verbatim section 452 of The Act:-
Section 452: Punishment for wrongful withholding of property.(1) If any officer or employee of a company-
(a) wrongfully obtains possession of any property, including cash of the company; or
(b) having any such property including cash in his possession, wrongfully withholds it or knowingly applies it for the purposes other than those CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.
5of12 expressed or directed in the articles and authorized by this Act, he shall, on the complaint of the company or of any member or creditor or contributory thereof, be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. (2) The Court trying an offence under sub-section (1) may also order such officer or employee to deliver up or refund, within a time to be fixed by it, any such property or cash wrongfully obtained or wrongfully withheld or knowingly misapplied, the benefits that have been derived from such property or cash or in default, to undergo imprisonment for a term which may extend to two years.
Provided that the imprisonment of such officer or employee, as the case may be, shall not be ordered for wrongful possession or withholding of a dwelling unit, if the court is satisfied that the company has not paid to that officer or employee, as the case may be, any amount relating to-
(a) provident fund, pension fund, gratuity fund or any other fund for the welfare of its officers or employees, maintained by the company;
(b)compensation or liability for compensation under the "Workmen's Compensation Act, 1923 (19 of 1923) in respect of death or disablement.) The scope of inquiry in proceedings u/s 452 of the Act is restricted in law and the case is to be confined within that narrow ambit. This provision provides a summary procedure for retrieving the property of the company and the provision is to be construed liberally. It was held in Atul Mathur v. Atul Kalra and Another, 1989 (4) SCC 514 that the object of enacting section 630 of The Companies Act, 1956 (section 452 of the Act) is to provide speedy justice to a company whose property is wrongfully obtained or wrongfully withheld by an employee orex-employee. The Bombay High Court in K.G.K. Nair v. P.C.Juneja, 1993 CRI.L.J. 2791 also held that the purpose of section 630 of The Companies Act, 1956 is to provide speedy and efficacious redress to the company for wrongful possession or wrongful retention of its property. In S.K. Sarma v. Mukesh Kumar Verma, AIR 20.02 SC 3294 the Apex Court while dealing with a matter pertaining to section 138 of the Railways Act, (which is similar to section 452 of the Act) observed that the object of the section is to provide speedy summary procedure for taking back the railway property wrongfully held by the railway personnel or his legal representatives. Having CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.
6of12 cogitated over the rival submissions and perused the case file, my observations on the issues agitated are delineated hereinafter.
8. The first limb of defence taken by the accused is that Mr. Raghunath Panwar, Officer (Legal) is not authorized to file the complaint on behalf of complainant NIC Limited, so the complaint is bad in law. The copy of power of attorney relied upon by CW-1 is Ex.CW1/1 which is a photocopy and the original power of attorney was not produced during trial. The exhibition of Ex.CW1/1 was objected to by the Ld. defence counsel on the ground of mode and manner of proof. Only a photocopy with one seal on it affixed by some officer of the complainant company is filed, the same cannot be equated to primary evidence and it cannot be taken to be the substitute for producing the original. Since the original power of attorney was not produced and even no ground had been shown for leading secondary evidence regarding the same, the objection qua Ex.CW1/1 is sustained and this document cannot be read in evidence as it is. However, as a general rule, criminal law can be set into motion by anyone (See Vishwa Mitter v. O.P. Poddar (1983) 4 SCC 701). At this juncture, this court is tempted to reproduce the observation made by the Apex Court in the case of M/s M.M.T.C. Ltd. v. M/s. Medchal Chemicals & Pharma P Ltd. (2002) 1 SCC 234 which is as follows:
This Court has, as far back as, in the case of Vishwa Mitter v. O. P. Poddar reported in (1983) 4 SCC 701, held that it is clear that anyone can set the criminal law in motion by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance. It has been held that no court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. It has been held that if any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. In the present case, the only eligibility criteria prescribed by Section 142 is CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.
7of12 that the complaint must be by the payee or the holder in due course. This criteria is satisfied as the complaint is in the name and on behalf of the appellant Company. In the case of Associated Cement Co. Ltd. v. Keshvanand reported in (1998) 1 SCC 687, it has been held by this Court that the complainant has to be a corporeal person who is capable of making a physical appearance in the court. It has been held that if a complaint is made in the name of a incorporeal person (like a company or corporation) it is necessary that a natural person represents such juristic person in the court. It is held that the court looks upon the natural person to be the complainant for all practical purposes. It is held that when the complainant is a body corporate it is the de jure complainant, and it must necessarily associate a human being as de facto complaint to represent the former in court proceedings. It has further been held that no Magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. It has been held that there may be occasions when different persons can represent the company. It has been held that it is open to the de jure complainant company to seek permission of the court for sending any other person to represent the company in the court. Thus, even presuming, that initially there was no authority, still the Company can, at any stage, rectify that defect. At a subsequent stage the Company can send a person who is competent to represent the company. The complaints could thus not have been quashed on this ground.
The present complaint is filed under a special statute i.e. The Companies Act, 2013 and as per section 452 of the Act, the complaint is required to be filed by the company. A perusal of complaint shows that the same is filed in the name of the company, so the requirement of section 452 of the Act stands satisfied.
9. The apex court in the judgment of United Bank of India v. Naresh Kumar & Ors. (1996) 6 SCC 660 held that when cases are filed on behalf of public corporation then public interest should not be permitted to be defeated on a mere technicality. The relevant portion of the apex court judgment is as under:-
"In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.
8of12 ......... If, for any reason whatsoever, the courts below were still unable to come to this conclusion, then either of the appellate courts ought to have exercised their jurisdiction under Order 41 Rule 27 (1) (b) of the Code of Civil Procedure and should have directed a proper power of attorney to be produced or they could have ordered Sh. L. K. Rohtagi or any other competent person to be examined as a witness in order to prove ratification or the authority of Sh. L. K. Rohtagi to sign the plaint. Such a power should be exercised by a court in order to ensure that injustice is not done by rejection of a genuine claim.
The direction given by the apex court was adhered to. as this direction applies equally to civil and criminal proceedings. In compliance of aforementioned direction, this court invoked power under section 91 Cr.P.C and directed that a duly certified copy of power of attorney of CW-1 be placed on record. The power of attorney of CW-1 duly certified by Company Secretary, NIC was filed in compliance of this court's order. The power of attorney is contained in a board resolution and this resolution is duly certified by the Compamy Secretary of complainant in terms of section 21 of the Act. Even otherwise, It can be deciphered from the other acts performed during the course of trial like production of original documents/record from the complainant company, compliance on behalf of the company during trial etc. as to whether the authority is delegated to the AR to pursue the complaint or not. The power of attorney now placed on record after due certification shows that CW-1 being the administrative officer (legal) was well within his rights to make the present complaint. From a conjoined reading of entire material available on record, it can be stated with certitude that complaint was properly made and the same was filed by an authorized representative of the complainant.
10. The next defence raised by the accused is that the entire complaint did not disclose the particulars and details of property to which it pertained. CW-1 in his cross-examination admitted that the CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.
9of12 particulars and description of property had not been mentioned in the complaint. It is a matter of record that in the averments made in the complaint, the particulars of case property are not mentioned. However, the complaint is to be read as a whole and the documents annexed with the complaint are to be read as part and parcel of the complaint. The copy of notice dated 17.09.2015 sent to the accused persons asking them to vacate the premises (clearly mentioning the property number as "108/3, Pal Mohan Apartments, Punjabi Bagh, Delhi: 110026") was filed with the complaint. Not only this, copy of reply sent by Anupama Beniwal to the complainant dated 22.12.2015 is also annexed with the complaint wherein she clearly mentions that vacation of present accommodation allotted to her late husband Satish Beniwal was subject to release of service dues of her husband. Thus, it cannot be stated that the accused persons upon receipt of complaint did not knew the premises for which the same was filed. The addresses of accused persons mentioned in the memo of parties attached with the complaint is of the same quarter/flat for unauthorized possession of which the present proceedings have been initiated. Even this defence is of no use to the accused as the accused persons or the court were not misled by non-mentioning of property number in body of complaint. No prejudice whatsoever was caused to the accused persons by this omission and no injustice has occurred.
11. The third ground of defence taken by the accused is that no ownership document qua the flat in question has been placed on record by the complainant. The complainant has placed on record the photocopy of property tax receipt Ex.CW1/2. This receipt was also objected to on the ground of mode of proof. Ex.CW1/2 is not an CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.
10of12 original document and no cogent reason for non-production of original has been furnished by the complainant, so secondary evidence of property tax receipt cannot be given and the objection qua mode of proof is sustained and this document cannot be read in evidence. However, the accused cannot question the ownership of complainant over the property as they are estopped from doing the same since, the accused time and again sought extension of tenure of stay in the above said flat from the complainant and in the reply dated 22.12.2015 Ex.CW1/9 they categorically stated "Vacation of present accommodation allotted to my husband late Sh. Satish Beniwal, then Deputy Manager, NIC is subject to release of service dues of my husband" This admission not only shows that accused Anupama Beniwal was occupying the flat but also puts to rest the controversy, if any as to how she came in possession of the flat. Facts expressly or impliedly admitted need not be proved. Reliance is also placed upon the judgment of apex court in Hooghly Mills Company Ltd. v. The State of West Bengal and Anr. 2019 SCC Online SC 1410 wherein it was held:-
10. With respect to the third and fourth issues, we find that the High Court has gone against the spirit of the provision, as enunciated by this Court in Baldev Krishna Sahi (supra), by strictly interpreting Section 630 to mean that the appellant company must have title by way of ownership to the disputed property and that the accused should have been in possession of the flat as a perquisite of his service.
Section 630 nowhere requires that the company should have title to the property. The emphasis is on whether the accused has obtained wrongful possession of the property which defeats the company's lawful right of exclusive possession, even though the property as such may not belong to the company but to a third- party landlord or licensor, as was the case in Atul Mathur (supra). The term 'property of the company' has to be construed widely having regard to the beneficial object of the Section (See Kannankandi Gopal Krishna Nair (supra); PV George v. Jayems Engineering Co. (P) Ltd, (1990) 2 Comp LJ 62 (Mad)).
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11of12 The complainant is not required to prove its title to the property in question and it is sufficient that it has been established that the accused recognize that the property is to be returned to the complainant. Time and again by putting questions about nominee, gratuity, pension etc. (of Satish Kumar Beniwal) to the AR of complainant and by calling for record of Late Satish Kumar Beniwal from the complainant company, the accused themselves established the relationship between the deceased and the complainant. They had impliedly admitted in their reply sent to the company that vacant possession of flat is to be given to the complainant. The accused thereafter can not ask the complainant to prove its ownership or title to the property. Hence, this defence also does not find favour with this court.
12. The last defence raised by the accused persons is that the complaint is filed by suppressing material facts from the court. This court has thoroughly perused the contents of the complaint and it does not seem that any material fact necessary to prove the ingredients of offence punishable u/s 452 of the Act have been concealed from this court. Rather, the complainant has additionally mentioned in the complaint that due to pendency of civil suit between Usha Beniwal i.e. the alleged first wife of deceased Satish Kumar Beniwal and the present accused persons, the pension, gratuity and other service benefits have not been released in favour of accused persons. The complaint can also not be dismissed on the ground of suppression of material facts.
13. To conclude, the ingredients of offence punishable u/s 452 of the Act are well established as the fact of allotment of flat, death of allottee CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.
12of12 and possession of flat by the accused persons even after the death of allottee are proved. Accordingly, the accused Anupama Beniwal and Shreshth Beniwal are convicted for the offence punishable u/s 452 of the Act.
Announced in the open court on 14th July, 2022 ANURAG THAKUR ACMM (Spl. Acts), CENTRAL TIS HAZARI COURTS, DELHI This judgment consists of 12 pages and each and every page of this judgment is signed by me.
CC No. 2929/2017 National Insurance Company Ltd. v. Anupama Beniwal & Anr.