Bombay High Court
Airfreight Limited vs K. Kothawala on 23 November, 1994
Equivalent citations: 1995(4)BOMCR109, 1995CRILJ287
JUDGMENT
1. This Revision Application under Ss. 397 and 401 of the Criminal Procedure Code has been filed by the applicant-original complainant against the order passed by the learned Addl. Chief Metropolitan Magistrate, 4th Court, Girgaum, Bombay dated 5th November, 1992, discharging the Respondent-accused under S. 245(i) of the Criminal Procedure Code of the offence punishable under S. 630 of the Companies Act, read with S. 406 of IPC.
2. That the petitioner-complainant filed a criminal complaint being Criminal Case No. 5/S of 1988 in the Court of Addl. Chief Metropolitan Magistrate, 4th Court, Girgaum, Bombay, against the respondent-accused on the accusation that the Respondent-accused was in the employment of the complainant-company. The complainant is the General Manager of M/s. Airfreight Private Limited being registered company under the Companies Act. The complainant had taken one flat on leave and licence basis from one Mrs. Sarla Kirpalani under the licence agreement. The flat known as Flat No. 110, situated at Olympus Apartment, Cumballa Hill, Altamount Road, Bombay. The leave and licence agreement was signed by the land lady Mrs. Sarla Kirpalani as the licensor and Mr. H. R. Bery, General Manager for Airfreight Pvt. Ltd., as Licensee on 1st December, 1971. The further case of the complainant is that the said flat was allotted to Respondent-accused Mr. Kayum Kothavala for his residence as he was in employment of the company. The rent claimed to have been fixed at Rs. 750/- per month and that was being paid by the complainant-company by deducting a sum of Rs. 545/- from the salary of the Respondent-accused. It is also the further case of the company that a letter dated 15th December, 1971 in the form of consent terms was obtained from the Respondent that the said flat was allotted on leave and licence basis and the respondent had agreed to give peaceful, vacant possession on the expiry of the licence terms or if he ceases to be the employee of the company. It also reveals that the respondent-accused was promoted and had reached to the post of Senior Manager of the company and the deduction of the rent from his salary was also stopped and allowed to occupy the said flat as rent free residence by the petitioner-company. It is submitted that by letter dated 11-1-1978 (P-2), the respondent-accused tendered his resignation from the post of the Manager of the petitioner-company and by letter dated 19-1-1978 (P-3), the resignation of the Respondent-accused was accepted by the petitioner-company. It is submitted that by letter dated 21-1-1978, the petitioner-company requested the Respondent-accused to hand over the vacant possession of the flat in question to the petitioner-company. Again, by letter dated 8th March, 1978, the Respondent-accused was requested to hand over the vacant possession of the flat but there was no response from the Respondent-accused. Hence, it is submitted that a notice dated 16-8-1978 was issued through Patel & Cama Advocates to the Respondent-accused. It also reveals from the record that the petitioner-company filed a civil suit in the Small Causes Court being Civil Suit No. 27/40 of 1979 against the respondent-accused. Likewise, it reveals that the respondent-accused has also filed civil suit in the Civil Court against the company and those suits are pending. In the meantime, the petitioner-company moved with an application under S. 630 of the Companies Act before the Metropolitan Magistrate. It is submitted that the Respondent-accused had also filed application under S. 482 of the Criminal Procedure Code in this High Court for quashing the said application which has been dismissed in 1981. Thereafter, Criminal Revision Application No. 271 of 1983 before the Sessions Court for stay of criminal proceeding was filed by the Respondent-accused and the said Revision Application came to be rejected by the Sessions Court. Against that order, the Respondent accused had preferred Writ Petition No. 140 of 1985 in the High Court which also came to be dismissed. In the meantime, it reveals that the petitioner-company has purchased the flat in question by executing the sale agreement with land lady on 24-12-1986.
3. Under the above-stated circumstances, a complaint came to be filed against the Respondent-accused under S. 630 of the Companies Act and under S. 406 of IPC. The learned Magistrate issued summons and recorded the evidence under S. 244 of the Criminal Procedure Code and on perusal of the evidence, he discharged the respondent-accused under S. 245(1) of the Criminal Procedure Code by his order dated 5-10-1992. Against the impugned discharge order, the petitioner-company has preferred this Revision Application.
4. Heard the learned counsel for the parties. Mr. V. P. Vashi, learned counsel appearing for the petitioner has emphatically submitted that the order of discharge is illegal as it is perverse on the face of it and deserves to be set aside. Mr. Vashi has submitted that the learned Magistrate has drawn the inference as regards the bona fide dispute regarding title which based on the following findings of the learned Magistrate :-
(i) That he was the only person to whom the flat was given.
(ii) that no resolution was passed by the company while taking the flat on leave and licence.
(iii) that there is no averments in the appointment letter regarding residential accommodation.
(iv) that Mr. Cyrus Gazdar was subsequently examined to cover up the prosecution case; and,
(v) that in view of Exhibit D-4 and
(vi) that in view of the finding that Exhibit P-11 (letter dt. 15-12-71) was ante-dated.
5. Mr. Vashi submitted that it is erroneous and perverse view taken by the learned Magistrate. It is also submitted that the learned Magistrate has wrongly relied on the ratio laid down in the case of Damodar Das Jain v. Krishna Charan, 1984 MLJ 952. The learned Judge has failed to consider three judgments of this Court which have distinguished the said judgment i.e. 1984 MLJ 952. It has been submitted by the learned counsel Mr. Vashi that the learned Judge has failed to consider the ratio laid down in the case of Atul Mathur, reported in 1989 SCC (Cri) 761 that pendency of the Civil dispute would not debar to complete the prosecution under S. 630 of the Companies Act. In support of his arguments, the learned counsel Mr. Vashi has relied on the following authorities which have been supplied in compilation as under :-
: : : ; .
6. As against this, the learned counsel Mr. Sudhir Shah appearing for the respondent has also emphatically submitted that the learned Magistrate has rightly and correctly relied on the ratio laid down in the case of Damodar Das Jain v. Krishna Charan, 1984 MLJ 952 Mr. Shah pointed out from the record that the licence agreement (P. 1) which was executed at the instance of the respondent-accused that the respondent-accused at the relevant time was unmarried person and he was not in a position to secure the residential accommodation in his name. Therefore, he had requested the company to occupy flat in question in the name of the company on his behalf. It has been submitted that the respondent-accused himself has deposited the three months rent for leave and licence, and also paid the brokerage charges. Mr. Shah submitted that letter Exhibit D-4 addressed to the respondent-accused by the petitioner-company has proved this fact. It has been further submitted by Mr. Shah that the learned Magistrate has rightly held that the letter D-11 is ante-dated and therefore, there was no terms and conditions agreed by the respondent to give the peaceful possession to the petitioner-company, as alleged in the complaint. It has been emphatically submitted that the alleged licence agreement deed (P-1) was for the period of 11 months and upon expiry of the period, the petitioner-company ceases to be the licensee and the respondent-accused become a direct tenant of the licensor-land lady. Therefore, it is submitted that the petitioner-company has no right to evict the respondent-accused from the flat in question and the petitioner-company has no right to file complaint under S. 630 of the Companies Act. Further, it has been submitted that there is no reason for interfering in this revision application by this court as the scope of the revision application is very limited. Mr. Shah has also relied on several authorities in support of his submission. He relied upon the following authorities :-
1. ,
2. 1975 Cr LJ 1241 : (1975 All LJ 10) and;
3. 1975 Cr LJ 880.
7. Having regard to the counter contentions of both the parties and the finding of the learned Magistrate, the short question involved in this application is whether the learned Magistrate has properly exercised his power while passing the order of discharge under S. 245(1) of the Criminal Procedure Code. As it is a warrant triable case, the learned Magistrate recorded the evidence of both the parties under S. 244 of the Criminal Procedure Code and after recording the evidence, the learned Magistrate has discharged the respondent-accused under S. 245(1) of the Criminal Procedure Code and the learned Magistrate has given reasons for the same.
8. In my view, the impugned order of discharge is unsustainable for the following reasons :-
The learned Magistrate's impugned order is based on the ratio laid down in Damodar Das Jain v. Krishna Charan, reported in 1984 MLJ 952. It reads as under :-
"As far as the question of implied licence in favour of the company is concerned, that also in our view, is a question which requires to be determined by the Civil Court and cannot be determined by a Magistrate's Court in a proceeding under S. 630 of the Companies Act." ..... "On the plain reading of the said section, particularly where a complaint thereunder could be also at the instance of creditor or a contributory of the company" ..... It appears that the Magistrate's jurisdiction would extend only to those cases where there was no dispute or in any event, no bona fide dispute, that the property involved was the property of the company".
9. The glaring fact was reflected in the order of the learned Magistrate which has influenced him in drawing the inference as bona fide dispute between the parties as regards the title stated as above. The defence of the respondent-accused is that the flat in dispute was not occupied by the petitioner-company under the licence agreement but it is at the instance of Respondent-accused.
10. The order of discharge, in my opinion, for the reasons stated herein, is perversed which resulted into miscarriage of justice. The licence agreement (P-11) admittedly executed by the petitioner-company. It is also admitted fact that rent of the said flat was fixed at Rs. 750/- per month and as against that, only Rs. 520/- was being deducted from the salary of the respondent-accused by the company. Further, it reveals that as the respondent-accused become a Senior Manager of the company, the company allowed him to occupy the said flat rental free accommodation and there is no denial to this averment of the petitioner-company. It is also an admitted fact that it reveals from letter D-4 that the respondent was not in a position to get the flat in question on rent as he was unmarried, and according to him, he requested the company to enter into an agreement with the land lady and execute the licence agreement (P-1). The agreement (P-1) admittedly signed by the Manager of the company. This is the prima facie evidence. As regards the petitioner-company's title and interest in the said flat, it would be different matter that the prima facie evidence may be rebutted by the respondent-accused in the trial but it would be premature to conclude the issue under the guise of civil dispute and bona fide dispute as regards the title observed by the Supreme Court in the case of Damodar Das Jain v. Krishna Charan, reported in 1984 MLJ 952. In the case of Atul Mathur v. Atul Kalra, in para 16, it is held that :-
"Merely because respondent I had schemingly filed a suit before tendering his resignation, 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 S. 630. If a view is mechanically taken that whenever a suit has been filed before a complaint is laid under S. 630, the criminal court should not proceed with the complaint, it would not only lead to miscarriage of justice but also render ineffective the salutary provisions of S. 630."
Further, it has been observed by the Supreme Court in the case of R. S. Nayak v. A. R. Antulay, that :-
The power to discharge is exercisable under S. 245(1) when "The Magistrate considers, for reasons to be recorded that no case against the accused has been made out which, if unrebutted, would warrant his conviction" ..... The stage for discharge under S. 245 on the other hand, is reached only after the evidence referred to in S. 244 has been taken. Notwithstanding this difference in the position, there is no scope for doubt that stage at which the Magistrate is required to consider the question of framing of charge under S. 245(1) is a preliminary one and the test of "prima facie" case has to be applied ..... If the trial court is satisfied that the prima facie case is made out, charge has to be framed".
11. As observed above, there is a prima facie case made out by the complainant in his complaint, the power under S. 245(1) is not discretionary power of the learned Magistrate that it is to be exercised judiciously as the reasons required to be recorded for discharge. The reasons recorded by the learned Magistrate for discharge in my opinion, are perverse and therefore, the discharge order is required to be set aside. As regards the jurisdiction of this Court, the learned counsel Mr. Shah relied on the case of Rajaram Gupte v. Dharamchand, 1983 Cri LJ 612 wherein it has been observed as follows :-
"The order discharging an accused should not be interfered with unless it is perverse or on the face of the record incorrect or foolish perfunctory or glaringly unreasonable or has been made without recording reasons for discharging the accused".
The ratio laid down by the Apex Court required to be followed and in the instant case, as observed above, the reasoning recorded by the learned Judge is perverse and therefore, it required to quashed and set aside.
In the result, application is allowed. Rule made absolute. This matter is sent back to the learned Metropolitan Magistrate, 14th Court, Girgaum, Bombay and the learned Magistrate is directed to proceed with the same according to law.
This being a very old matter, the petitioner and respondent are directed to remain present before the Court of learned Metropolitan Magistrate, 14th Court, Girgaum, Bombay on 21st January, 1995 and the learned Magistrate is directed to dispose of the same according to law expeditiously and preferably within 8 weeks from that day.
The learned counsel for the Respondent-accused requested for staying the operation of this order for 8 weeks. Having regard to the facts and circumstances of this case, the operation of this order is stayed for six weeks from today.
12. Application allowed.