Delhi District Court
M/S Texmaco Ltd. vs Raghubir on 11 May, 2011
IN THE COURT OF SH. AJAY GUPTA ADDITIONAL CHIEF
METROPOLITAN MAGISTRATE (SPL. ACTS): CENTRAL: TIS
HAZARI COURTS, DELHI
M/s Texmaco Ltd. vs Raghubir
CC No.572/3
U/s 630 of Companies Act, 1956
JUDGEMENT
(a) Serial no. of the case : 02401R1031112003
(b) Date of commission of offence: On and after 30.11.1996
continuously
(c) Name of complainant : M/s Texmaco Limited
Balgheria Calcutta
Prop. Of M/s Birla Textiles
PO Birla Lines, Delhi07
(d) Name, parentage, residence: Raghubir
S/o Paras Ram
R/o Qr. No.46, Khilonawala
Bagh, Pambari Road, Delhi
(e) Offence complained of/ proved : U/s 630 of Companies Act
(f) Plea of accused : Pleaded not guilty.
(g) Final order : Convicted
(h) Date of such order : 11.05.11
Date of Institution : 14.08.03
Date of Reservation of Judgment: 03.05.11
Date of Pronouncement of Judgment: 11.05.11
Brief statement of the reasons for the decision:
1. The complainant company, M/s. Texmaco Ltd. filed the present Texmaco vs Raghubir 1 complaint u/s. 630 of the Companies Act, 1956, against the accused, alleging that on 01.10.67 accused joined the services of erstwhile company M/s Birla Cotton Spinning & Weaving Mills Ltd., and he was allotted one quarter bearing Qr. No. 46, Khilonawala Bagh, Pambari Road, Delhi, on 22.01.79, as a licensee, by virtue of his employment. It is further alleged, that by virtue of a scheme of arrangement dated 03.01.1983, arrived at between the present complainant and M/s Birla Cotton Spinning & Weaving Mills Ltd. and pursuant to the order passed by Hon'ble Delhi High Court, the present complainant became the owner of the concerned Birla Mill Unit where the accused was working along with all its employees and the properties, including the property in question. Pursuant to the said arrangement, all the agreements, more particularly, licence agreement entered between M/s Birla Cottons Spinning and Weaving Mills Ltd. with third parties are deemed to be entered between the complainant company and those third parties. Complainant company also acquired all the rights, titles, interests in the properties of the mill and the housing colonies of the mill unit of the said M/s Birla Cottons Spinning and Weaving Mills Ltd. and all the employees of the said mill unit of M/s Birla Cottons Texmaco vs Raghubir 2 Spinning and Weaving Mills Ltd., became the employees of the present complainant company pursuant to the said scheme of arrangement. In terms of order of Hon'ble Supreme Court of India in Petition No.4677/1985, the working of the mill in Delhi was closed w.e.f. 30.11.96. as such, accused ceased to be in services of complainant company from 30.11.96. Vide order dt. 08.07.96 the Hon'ble Supreme Court has directed to relocate the industry. It was also directed that the employees who refused to be relocated along with relocated industry, shall be deemed to have been retrenched from the service w.e.f 30.11.96 and shall be paid compensation in terms of Section 25F(b) of Industrial Dispute Act, 1947 along with one year wages as additional compensation. It is alleged that accused was not willing to be shifted along with re located industry, therefore, the company in compliance of the directions of Hon'ble Supreme Court, duly paid compensation amounting to Rs.99,360/ vide cheque no. 114108 drawn on SBI Chander Lok Building, New Delhi, to the accused in terms of section 25F(b) of the Industrial Dispute Act, 1947, alongwith one year wages as additional compensation on 30.11.96. As such, accused ceased to be the employee of complainant company Texmaco vs Raghubir 3 despite cessation of his services accused did not vacate the quarter allotted to him and is wrongfully withholding the quarter.
2. After summoning of the accused for the said offence, a notice for the offence U/s 630 of the Companies Act was given to the accused in terms of Section 251 Cr.P.C., to which he pleaded not guilty and claimed trial.
3. In order to substantiate its allegation, the complainant examined its attorney Sh. R. S. Sharma as PW1 and Sh. Pradeep Sharma, Time KeepercumEstate Officer of the complainant company, as PW2. PW1 deposed that he is attorney of the complainant company and duly authorised to sign, verify the complaint and to depose in the present case vide resolution Ex. PW 1/1 and power of attorney Ex. PW1/2. He also proved the certificate of incorporation Ex. PW1/3 and deposed that the accused was allotted the said quarter vide allotment letter Ex. PW1/5. He also proved on record the scheme of arrangement and order of Hon'ble Delhi High Court in Company Petition No.59/1982 dated 03.1.1983, Ex PW1/4; through which all the rights, titles, interest, Texmaco vs Raghubir 4 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, as such, he was liable to vacate the quarter but he failed to do so and is withholding the quarter in question illegally and unauthorizedly. PW2 also supported the complainant's case and deposed more or less on the similar lines as deposed by PW1.
4. Statement of accused recorded u/s 313 Cr.P.C in which accused has not disputed that he joined M/s Birla Cotton Spinning and Weaving Mills Ltd as well as allotment of aforesaid quarter through Ex. PW1/5 by virtue of his employment. He has also admitted his signature appearing on Ex. PW1/5. Accused also admitted receipt of service benefits. Accused examined himself as DW1. In his defence evidence accused admitted that due to his employment quarter in question was allotted to him. However, accused stated that he is a tenant in the said quarter. Accused also admitted that he is not in the service since 1996.
Texmaco vs Raghubir 5
5. I have heard the Ld. Counsel for the complainant company as well as accused and gone through the record of the case. I have also gone through the written arguments as well as citations filed on behalf of parties.
6. While dealing with the case U/s 630 of Companies Act, this court is to go by the following guidelines which are laid down by the Hon'ble Bombay High Court in the following case: "1993 CRI. L.J. 2791 " K.G.K. Nair v. P.C. Juneja"
The provisions of S.630 are intended to provide speedy and efficacious redress in cases where company's property i9s wrongfully withheld and therefore the following guidelines are required to be observed:
(a) That the complaints be taken up and disposed of on a priority basis, the accent being on the avoidance of any unwarranted delay.
(b) That the trial Courts should address themselves to the fact that the scope of the enquiry in a proceeding under Section 630 is extremely restricted in law and, consequently, the parties be confined within those narrow ambits without being permitted to dilate or protract the proceeding through extraneous avenues.
(c) That no frivolous application for adjournment, stay of proceedings, etc., should be permitted by the trial Courts because the history of those proceedings indicate that each of such states is responsible for further litigation and years of delay. The pendency of other civil proceedings is no bar to the decision of an application under S. 630 which fact should be taken cognizance of in such situations.
(d) That the appeal, i.e., Court of Session, in the first instance, must judiciously scrutinize and vigorously examine the revision applications and appeal before granting stay orders.
(e) That applications for discharge on frivolous and untenable pleas Texmaco vs Raghubir 6 are required to be speedily and effectively disposed of and are not to be used as handles for protracting the litigation".
7. For proving the offence u/s 630 of Companies Act, complainant company was required to establish on record the following ingredients:
(a) That the complainant company is registered under the Companies Act;
(b) That the complainant company is the owner of quarter in question and there exists/existed the relationship of employer and employee between the complainant company and accused;
(c) That the accused was allotted quarter in question on licence basis;
(d) That the accused was ceased to be employee of the complainant company and
(e) That the accused has wrongfully withheld the quarter in question. Point (a) "That the complainant company is registered under the Companies Act"
8. It is clear from the ex. PW1/3 that the Complainant company the registered under the Companies Act. Even otherwise factum of complainant company's incorporation is not in dispute. Point(b) That the complainant company is the owner of quarter in question and there exists/existed the relationship of employer and employee between the complainant company and accused;
9. In his statement recorded u/s 313 Cr.P.C accused has not denied that he joined M/s Birla Cottons Spinning and Weaving Mills on 01.10.67 and by virtue of his employment the quarter in question Texmaco vs Raghubir 7 was allotted to him as licensee. Accused has also not denied byv virtue of scheme of arrangement Ex. PW1/4 complainant company became owner of the quarter in question as well as his employer and gave evasive answer that he does not know. Ld. counsel for accused also argued that complainant is not the owner of the quarter in question. He further argued that in pursuance to the aforesaid order the complainant was required to do certain acts and a certified copy of the order of Hon'ble Delhi High Court was to be submitted with ROC, Calcutta. However, they have not fulfilled these requirements, therefore, this order has no application and complainant company cannot claim ownership by virtue of this order. This court does not find any substance in the submissions of Ld. counsel for accused. It is clear from the perusal of order the Hon'ble High Court that no further act was required even otherwise. This scheme of arrangement has not been challenged hence it became final. This formality was procedural which was to be complied with and accused cannot be allowed to take advantage of these technicalities. Relevant para of the order of Hon'ble High Court reads as under which clarifies that the complainant company had become the owner of the i.e. M/s Birla Texmaco vs Raghubir 8 Cottons Spinning and Weaving Mills Textiles as well as quarter in question.
(1)That all the property, rights, and powers of the said transferor company specified in the first, second and third parts of the Schedule II hereto and all the other property, rights and powers of the said transferor company be transferred without further act or deed to the said transferee company and accordingly the same shall, pursuant to section 394(2) of the Companies Act, 1956, be transferred to and vest in the said transferee company for all the estate and interest of the said transferor company for all the estate and interest of the said transferor company therein but subject nevertheless to all charges now affecting the same, and (2) That all the liabilities and duties of the said transferor company by transferred without further act or deed to the said transferee company and accordingly the same shall, pursuant to section 394 (2) of the Companies Act, 1956, be transferred to and become the liabilities and duties of the said transferee company: and (3) That all proceedings now pending by or against the said transferor company be continued by or against the said transferee company; and (4) all contracts, deeds, bonds, agreements and instruments of whatever kind or nature relating to the said units of M/s Birla Cottons shall continue to be in full force and effect against or in favour of Texmaco as the case may be and enforced as fully and effectively as if Texmaco instead of Birla Cotton had been a party thereto.
10.Thus, it is clear from the perusal of the order passed by Hon'ble Delhi High Court that complainant company has become the owner of all the properties of the unit of M/s Birla Cottons Spinning and Weaving Mills Ltd. without any further Act or Deed and said quarter stood transferred and vested with the complainant company for all the estate and interests. Thus, complainant company has become Texmaco vs Raghubir 9 the owner of the property in question and has got every right to prosecute with this complaint.
11.Moreover, in "AIR 2007 Delhi 147, Kamla Rani and Ors vs M/s Texmaco Ltd." Hon'ble High Court has relied on the same scheme of arrangement Ex. PW1/4 and hold that the entire assets of M/s Birla Cottons Spinning and Weaving Mills Ltd. stood transferred to M/s Texmaco Ltd. and therefore said company was the successorininterest of M/s Birla Cottons Spinning and Weaving Mills Ltd.. Thus, it is clear that the complainant company became owner of all the property, rights and powers in the mill unit of transferee company without any further act or deed and by virtue of scheme of arrangement Ex. PW1/4, complainant company became owner of the property in question, therefore, they have every right to prosecute this complaint.
12.The complainant company was further required to establish on record that accused was an employee of the complainant company. Ld. counsel for accused argued that accused is not Texmaco vs Raghubir 10 employee of the complainant company, however this court does not find any substance in it. It is clear from the scheme of arrangement ex. PW1/4 that the complainant company became the owner of M/s Birla Cottons Spinning and Weaving Mills Textiles (which was earlier a unit of M/s Birla Cottons Spinning and Weaving Mills) as well as quarter in question. It is further clear from perusal of this scheme of arrangement that all the employees of M/s Birla Cottons Spinning and Weaving Mills has become the employees of complainant company i.e. M/s Texmaco Ltd. Relevant portion of the judgment reads as under: "2.(b)(i) All the employees of the said Units of Birla Cotton in service on the date immediately preceding the Effective Date shall become the employee of Texmaco without interruption in service and on terms no loss fevourable to them those applicable to them on the day immediately preceding the effective date". Thus, it is clear that accused had also become the employee of the complainant company i.e. M/s Texmaco Ltd.. Moreover, in his statement accused has clearly admitted that he joined the services of M/s Birla Cottons Spinning and Weaving Mills and his services came to an end w.e.f 30.11.96 after closure of mill at Delhi. Accused also clearly stated that in his defence evidence that he is not in the service since 1996. It is clear from the aforesaid Texmaco vs Raghubir 11 discussions that as to how the present complainant stepped into the shoes of M/s Birla Cottons Spinning and Weaving Mills and became owner of quarter in question and employer of accused w.e.f. 03.01.83. Thus, it is crystal clear that till 30.11.96 accused worked with the present complainant only but nonelse. Point(c) "That the accused was allotted quarter in question on licence basis"
13.Complainant company was required to establish on record that accused is the licensee of the complainant company. PW1 has deposed that the accused was allotted quarter in question on licence basis through letter Ex. PW1/5 which bears signature of accused at point A. This fact has also been admitted by the accused in his statement recorded u/s 313 Cr.P.C. Thus, no further evidence is required to prove that accused was licensee. Ld. Defence counsel argued that quarter in question was given on rent and not as a licensee. Accused has not brought on record any document i.e. rent receipt etc to show that he is tenant in the quarter. Accused has simply claimed that he was tenant in the said quarter, however, he has not lead any evidence to show that he was a tenant in the quarter in question. Furthermore, it has been Texmaco vs Raghubir 12 held by the Hon'ble High Court that a tenancy is always created by a contract and for creating the contract of tenancy, both the parties i.e. landlord and tenant must be at adidem. Thus, in view of the law laid down by the Hon'ble Delhi High Court in "2009 (160) DLT 171, Viran Devi vs. S. Subhash" accused ought to have established on record the contract of tenancy, however except a bald statement nothing is proved on record to show that there exists a tenancy agreement between the parties. In view of the aforesaid discussion it is held that accused is a licensee and complainant is the licensor.
Point(d) & (e) "That the accused was ceased to be employee of the complainant company"
"That the accused has wrongfully withheld the quarter in question"
14.In his evidence PW1 categorically stated that service of the accused came to an end w.e.f 30.11.96 after closure of the mill at Delhi and this fact has not been disputed by the accused. Rather accused admitted in his defence evidence that he is not in the service since 1996. Thus, no further evidence is required to prove that service of the accused came to an end w.e.f. 30.11.96. Texmaco vs Raghubir 13
15.Now let us see whether complainant company has established that accused is wrongfully withholding the quarter. As per contents of allotment letter, the accused was to remain in possession of the quarter till he was in the services of the company and after cessation of his service accused was to vacate and hand over the quarter to the complainant company. It is stated that accused ceased to be employee of the complainant company on 30.11.96 and after that he has been unauthorizedly and illegally withholding the quarter. Thus, after cessation of his service accused was under obligation to vacate and hand over the possession of quarter in question which he failed to do so. Accused has not denied that he is still occupying the quarter. Since, he did not vacate and hand over the possession of the quarter in question after cessation of his service thus, it is held that accused has been wrongfully withholding the quarter. Moreover, it is also not disputed during cross examination that complainant company did not request lastly on 10.07.03 seeking vacation of the quarter. Ld. defence counsel submitted that no notice of termination and notice to vacate the quarter was ever served upon the accused. These arguments of the Ld. defence counsel does not carry much weight as for Texmaco vs Raghubir 14 maintaining the proceeding u/s 630 of Companies Act, aforesaid notice is not required to be served upon the accused. However, at the costs of repetition it is reiterated that services of the accused has already come to an end w.e.f 30.11.96. It has been held by the Hon'ble Supreme Court in "1989 (4) SCC 514, Atul Mathur vs Atul Kalra and Anr." that it is the duty of the court to suppress the mischief and advance the remedy u/s 630 of Companies Act and that the technicality should not come in the way of advancing the justice.
16.Ld. counsel for accused further argued that complainant has not examined all the witnesses and evidence of PW1 is not reliable as no proceedings were conducted in his presence. This court does not find any substance in it. It is not mandatory for the complainant to examine all their witnesses. It is not disputed that complainant is a company and thus their witness has to prove their case on the basis of record. PW1 has deposed only on the basis of record hence his testimony is not required to be corroborated by other/independent witnesses also.
Texmaco vs Raghubir 15
17.Ld. defence counsel further argued that the power of attorney and resolution in favour of the complainant is not proved in accordance with law and it does not comply with the provisions of Power of Attorney Act. The persons who delegated his power to the alleged attorney did not file his power to delegate. It is also argued that the resolution regarding power of attorney in favour of complainant has not been proved. The complainant is stranger to the company, therefore, no resolution could have been passed in favour of the complainant. However, this court does not find any force in his submissions. Accused has objected this power of attorney for the first time at the fagend of the trial and has not raised objection at the time of exhibiting this power of attorney i.e Ex. PW1/2. Perusal of power of attorney placed on record shows that it has been perfectly and legally notarized and it fulfills all the ingredients of section 85 of Indian Evidence Act. Section 85 of the Indian Evidence Act clearly provides that once there is a duly notarized power of attorney then it shall be presumed to be true unless the contrary is proved. Accused has not produced any ingredients to disprove the power of attorney.
Texmaco vs Raghubir 16
18.This court is supported with the law laid down by the Hon'ble Supreme Court in "AIR 1971, SC 761, Jugraj Singh vs Jaswant Singh". This court is further supported with the case law "AIR, 1982 Delhi 4897, Citibank N.A., New Delhi vs Juggilal Kamlapat Jute Mills ©. Ltd." in which it has been held that execution of power of attoreny by a Bank's Executive Officer and Cashier delegating certain powers to one employee and documents bearing Bank's seal and attested by Notary Public raises presumption that power of attorney is executed by the bank. Word "person" in section 85 includes legal person. It is further held by the Hon'ble High Court in "AIR 1981 Delhi 222" and "AIR 1972 Allahabad 219" that a power of attorney along with verifications are to be presumed to be true u/s 85 of Evidence Act. This court is further supported with the case law laid down by the Hon'ble High Court in "AIR 2007 Delhi 147, Kamla Rani and Ors vs M/s Texmaco" which was a case of the present complainant on the same facts. It was contended by the employee before Hon'ble High Court that eviction case was not filed by a properly authorized person and Hon'ble High Court held that ...Once a document is Texmaco vs Raghubir 17 authenticated by a notary public, it will be presumed that the document was duly executed and was in order. As observed in AIR 1984 (363( (sic) M/s E.C. and E.Co. Ltd. v. M/s J. E. Works, if two conditions are satisfied, firstly the power of attorney being executed before a notary public and secondly it being authenticated by a notary public, a presumption would arise under section 85 about the executant of the power of attorney. ...Decision of the Hon'ble Supreme Court reported as "AIR 1997 SC 3 Union of India vs Gresham Kumar"
is additionally relied upon by me. The said decision states that where a suit has been filed on behalf of a corporate body and is duly prosecuted by the person who had filed the suit, a presumption would arise that the person concerned was authorized to do so".
19. Ld. defence counsel further argued that the complainant is the encroacher over the government land and property in question belongs to Government, hence present proceedings is not maintainable against the accused. Same point came up for Texmaco vs Raghubir 18 consideration before the Hon'ble Delhi High Court in "AIR 2007 Delhi 147, Kamla Rani and Ors vs M/s Texmaco Ltd" case. It has been held by the Hon'ble High Court in this matter that ... ownership is not relevant for the reason a person may be a landlord without being an owner. ...A tenant who accepts a person as his landlord is estopped from questioning the title of his landlord. As per section 116 of Evidence Act, the tenant is estopped from disputing the title of his landlord over the premises let out to him. It is settled law that a company may take premises on lease from the owner with a permission to induct its employee as a tenant/licensee. Furthermore, as per the orders of Hon'ble Supreme Court, 68% of the land had to be handed over to DDA and remaining 32% vested in the company.
20.Furthermore, it is clear from the aforesaid discussions that the complainant has proved that the accused was let out the quarter in question on licence basis by virtue of his employment. It is well settled law that the tenant or a licensee has got no right to challenge the title of his landlord/licensor. In this regard this court is supported with following case law: Texmaco vs Raghubir 19 AIR 1915 Privy Council at p.98 Bilas Kunwar vs Desraj Ranjit Singh AIR 2006 SC 3569 Bansraj Laltaprasad Mishra v Stanley Parker Jones AIR 1937 P.C. 251 Krishna Prasad Lal v. Barabani Coal Concern Ltd. AIR 2003 SC 4163 Sheikh Noor and Anr. v. Sheikh G.S. Ibrahim AIR 2002 SC 3294, S.K. Sharma v. Mahesh Kumar Verma (2002) 2 SCC 501 Vashu Deo v. Balkishan
21.Ld. counsel for complainant submitted that other accused persons were also convicted by the Ld. Predecessor Courts of Ld. ACMM on the basis on similar complaints filed by the present complainant. He further submitted that these orders have been upheld by the Hon'ble High Court and Hon'ble Apex Court in the following cases: "Crl. Rev. P. No. 233/2010, as Lakhan Singh vs Texmaco No. 2057/06, as Kanta Devi vs Texmaco.
"SLP (Crl.) 5216/06"
2006[3] JCC 1964, Mohan Singh vs M/s Texmaco & Anr. Crl.Rev. Petition No.21/2011, Khajan Singh vs State & Anr. CRL.M.C.80/2011, Kusum Lata vs Texmaco Ltd.
CRL.REV.P.380/2010Bhura Mal Thr. Its LR's Chander Kant vs State & Anr. CRL.REV.P.789/2006 & CRL.REV.P.790/2006
22.Thus, in view of these discussions it is held that complainant has established that the accused was allotted the aforesaid quarter on licence basis by virtue of his employment. It is further held services of the accused came to an end w.e.f 30.11.96 and after cessation of his service accused failed to vacate and hand over the possession of the quarter in dispute to the complainant. In such, circumstances it is held that the accused is wrongfully withholding Texmaco vs Raghubir 20 the quarter of the complainant company after cessation of his services. Thus, it is held that complainant has been successful in proving its case against the accused beyond reasonable doubt. Accordingly, accused is held guilty and convicted for the offence u/s 630 of The Companies Act 1956.
(AJAY GUPTA) ACMM(SPECIAL) ACTS, CENTRAL, TIS HAZARI COURTS DELHI Announced in open court on 11.05.11.
Texmaco vs Raghubir 21