1. IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR S.B. CRIMINAL REVISION PETITION NO. 164/2008 Ram Kumar Meena vs. State of Rajasthan & Anr. Date of Order: 28/05/2009 HON'BLE MR. JUSTICE RAGHUVENDRA S. RATHORE Reportable Mr. Kunal Rawat, for the petitioner. Mr. Javed Choudhary, Public Prosecutor. Mr. R.N. Khandelwal, for respondent No.2. This revision petition has been filed by the petitioner challenging the order dated 10.02.2006 passed by the learned Additional Chief Judicial Magistrate (Economic Offences) Jaipur City, Jaipur, whereby he has been convicted for the offence under Section 630 of the Companies Act, 1956 and sentenced for a fine of Rs. 300/-. Further, it was ordered that the petitioner shall hand over the possession of Quarter No. M-24 to the respondent company within a period of two months, in default of which he was to further undergo three months' S.I. Feeling aggrieved of the said order, the petitioner preferred an appeal which came to be dismissed by the learned Additional District and Sessions Judge No. 4 , Jaipur City, Jaipur on 10.12.2007. 2. Broadly speaking, the facts of the case are that a complaint came to be filed by respondent No.2 in the Court of Additional Chief Judicial Magistrate (Economic Offences), Jaipur City, Jaipur under Section 630 of the Companies Act, 1956. It was averred in the complaint that the complainant is a company, registered under the Indian Companies Act, 1956 and is doing business of hotel. Further, it was mentioned that the 2. complainant-company had taken on rent a premises from S.M.S. Corporation, situated at Narayan Singh Circle Jaipur, for its employees working in the hotel. It was also mentioned that the employees working with respondent No.2 are provided accommodation facility and at the end of service, they are to hand over the same to the respondent hotel. The petitioner was appointed by the respondent company on 16.08.1972 as house man and was alloted quarter No. M-24. It is further stated in the complaint that on 30.07.1992, the petitioner had given a letter stating that the possession of the quarter had been taken by him. The services of the petitioner came to an end on 20.01.2000, when attained the age of 58 years. In this regard, the complainant respondent had issued a letter to the petitioner on 23.11.1999. It was also averred in the complaint that when service of the petitioner came to an end he was orally asked to evict the premises of the company. But the petitioner did not hand over the possession of the premises and therefore the offence under Section 630 of the Companies Act was made out against him. Consequently, the instant complaint came to be filed by respondent No.2. 3. On lodging of the complaint, the trial proceeded in respect of offence under Section 630 of the Companies Act, wherein both the parties had led evidence in support of their cases. The learned Magistrate, by the order dated 10.02.2006, convicted and sentenced the accused petitioner as aforementioned. Furthermore, the learned Magistrate had issued 3. directions in respect of eviction from the premises in question. Thereafter, the petitioner preferred an appeal which came to be dismissed by the learned Additional District and Sessions Judge No.4, Jaipur City, Jaipur on 10.12.2007. Hence, the present revision petition. 4. The learned counsel for the petitioner has assailed the orders impugned passed by the learned courts below on the ground that the premises in question was in possession of the petitioner since the time of his ancestors, which was given to them by the erstwhile Rulers of Jaipur. Further, it is submitted that respondent No.2 is not the owner of the premises in question. The premises belongs to S.M.S. Corporation. It has also been submitted by the counsel for the petitioner that the respondent complainant has failed to prove its case for the offence under Section 630 of the Companies Act, even then the learned courts below have passed the order of conviction and sentence, as well as the eviction order against the petitioner. The learned counsel for the petitioner has also referred to the statements of some the witnesses recorded by the learned trial court. It has also been submitted that in a similarly situated case of Indra Bahadur Singh, it had been held that no offence is made out. In support of his submissions, the counsel for the petitioner has placed reliance on the cases of Chandragupta Gupta vs. Padmanabha Subramani, 1989 Company Cases (65) 190; V.M. Shah vs. state of Maharashtra & Anr., AIR 1996 SC 339(1) and Indian Hotel Company Ltd. vs. The State of 4. Rajasthan & Anr. (S.B. Cr. Leave to Appeal No. 150/2000), decided on 22.01.2007. Therefore, it has been submitted that both the impugned orders passed by the learned courts below be quashed and the conviction and sentence awarded to the petitioner be set aside. 5. On the other hand, the learned counsel for the respondent company has supported the impugned orders passed by both the courts below. He has submitted that the orders are very much in accordance with law and no illegality or infirmity has been committed by the courts below in passing the same so as to call for any interference by this Court, in exercise of its revisional jurisdiction. Further, he has submitted that the respondent complainant has proved its case on the basis of legal evidence on record and in this regard, he has referred particularly to Ex.P/6, Ex.P/11, Ex.P/12, etc. He has also submitted that the premises in question was taken on rent by the respondent company and was alloted to the petitioner at the time of his entering into service and he was duty bound to hand over the possession of the same as and when his services comes to an end. It has been submitted by the counsel for the respondent that the complainant was fully entitled to get back the possession of quarter No. M-24, situated at Narayan Singh Circle. He has also controverted the submissions made by the counsel for petitioner that the premises in question was in his possession since the time of his ancestors. The learned counsel for the respondent company has submitted that both the courts 5. below have properly appreciated the evidence on record, in arriving to the conclusion and no interference is called for by this Court. In support of his case, the learned counsel for the respondent complainant has placed reliance on the cases of Begu Ram vs. Jaipur Udhyog Ltd., 1987 RCC 89; Baldev Krishna Sahi vs. Shipping Corporation of India Ltd. & Anr., 1987 (3) Crimes 449; Amrit Lal Chum vs. Devoprasad Dutta Roy, AIR 1988 SC 733; M/s. Gokak Patel Volkart Ltd. vs. D.G. Niremath & Ors., 1991 Cr.L.R. (SC) 208; P.N. Mobar vs. State of Rajasthan & Ors., 1997 RCC 74 and Lalita Jalan & Anr. vs. Bombay Gas Co. Ltd. & Ors., 2003 (2) Crimes 444 (SC). 6. Before dealing with the contentions raised by the counsels for the parties, I may refer to the provisions of Section 630 of the Companies Act, case law and scope and ambit of the provision. Section 630 of the Companies Act reads as under:- “630. Penalty for wrongful withholding of property. (1) If any officer or employee of a company- (a) wrongfully obtains possession of any property of a company; or (b) having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act; he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to [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 6. 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.” In other words, the aforesaid provision makes the wrongful withholding of any property of a company by an officer or employee of the company a penal offence. The Section is in two parts. Sub-section (1) by clauses (a) and (b) creates two distinct and separate offences. First is the one contemplated by Clause (a), according to which an officer or employee of a company wrongfully obtains possession of any property of the company during the course of his employment, to which he is not entitled. Normally, it is only the present officers and employees who can secure possession of any property of a company. It is also possible for such an officer or employee, after termination of his employment, to wrongfully take possession of any such property. Clause (a) primarily refers to the existing officers and employees, it may also take in past officers and employees. In contrast, Clause (b) contemplates a case where an officer or employee of a company having any property of a company in his possession wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by the Act. It may well be that an officer or employee have lawfully obtained possession of any such property during the course of his employment but wrongfully withholds it after the termination of his employment. Clause (b) also makes it an offence if any officer or employee of 7. a company having any property of the company in his possession knowingly applies it to purposes other those expressed or directed in the articles and authorised by the Act. That would primarily apply to the present officers and employees and may also include past officers and employees. Therefore, the term 'officer or employee' appearing in Sub-section (1) of Section 630 of the Act is not to be given in a restrictive meaning. It is made clear that clause (a) and (b) are separated by the word 'or' and therefore are clearly disjunctive. 7. The provision under Section 630 of the Act had been purposely enacted by the legislature with a certain object. The Hon'ble Supreme Court in the case of Baldev Krishna Sahi vs. Shipping Corporation of India Ltd. 7 Anr., AIR 1987 SC 2245, had observed in respect of the said provision as under:- “The beneficent provision contained in S. 630 no doubt penal, has been purposely enacted by the legislature with the object of providing a summary procedure for retrieving the property of the company (a) where an officer or employee of a company wrongfully obtains possession of property of the company, or (b) where having been placed in possession of any such property during the course of his employment, wrongfully withholds possession of it after the termination of his employment. It is 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.” 8. Similarly, a Larger Bench of the Hon'ble Supreme Court in the case of Amrit Lal Chum vs. Devoprasad Dutta Roy, (1988) 2 SCC 269, held that Section 630 of the Act 8. makes it an offence, if an officer or employe of the company who was permitted to use the property of the company during his employement, wrongfully retains or occupies the same after the termination of his employment and that there is therefore no warrant to give a restrictive meaning to the term 'officer or employee' appearing in Sub-section (1) of Section 630 of the Act as meaning only the existing officers and employees and not those whose employment have been terminated or otherwise come to an end. 9. Later, in the case of Atul Mathure vs. Atul Kalra & Anr., (1989) 4 SCC 514, the Hon'ble Supreme Court followed the view taken in the case of Baldev Krishna Sahi (supra) and Amrit Lal Chum (supra). 10. In the case of Abhilash Vinod Kumar Jain (Smt) vs. Cox & Kings (India) Ltd. & Ors., (1995) 3 SCC 732, the Hon'ble Supreme Court explained the object of Section 630 of the Act as under:- "Even though Section 630 of the Act falls in Part XIII of the Companies Act and provides for penal consequences for wrongful withholding of the property of the company, the provisions strictly speaking are not penal in the sense as undeerstood under the penal law. The provisions are quasi-criminal. They have been enacted with the main object of providing speedy relief to a company when its property is wrongfully obtained or wrongfully withheld by an employee or officer or an ex-employee or ex-officer or anyone claiming under them. In our opinion, a proper construction of the section would be that the term "officer or employee" of a company in Section 630 of 9. the Act would by a deeming fiction include the legal heirs and representatives of the employee or the officer concerned continuing in occupation of the property of the company after the death of the employee or the officer." 11. Subsequently, a larger Bench of the Hon'ble Supreme Court in the case of Lalita Jalan vs. Bombay Gas Co. Ltd., (2003) 6 SCC 107, had observed in respect of the provisions of Section 628 to Section 631 of the Companies Act and held as under:- "17. The purpose of criminal justice is to award punishment. It is a method of protecting society by reducing the occurrence of criminal behaviour. It also acts as a deterrent. Where the punishment is disabling or preventive, its aim is to prevent a repetition of the offence by rendering the offender incapable of its commission. The Companies Act is entirely different from those statutes which basically deal with offences and punishment like Indian Penal Code, the Terrorist and Disruptive Activities (Prevention) Act, etc. It makes provision for incorporation of the companies, its share capital and debentures, management and administration, allotment of shares and debentures, constitution of Board of Directors, prevention of oppression and mismanagement, winding-up of the company etc. The heading of part XIII of the Companies Act is 'General' and a few provisions therein, namely, Sections 628 to 631 create offences and also prescribe penalty for the same. Having regard to the purpose for which Section 630 has been enacted viz. To retrieve the property of the company and the salient features of the statute (Comapnies Act) it is not possible to hold it as a penal provision as the normal attributes of crime and punishment are not present here. It cannot be said to be an offence against the society at large nor is the object of awarding sentence preventive or reformative. In such circumstances the principle of interpretation relating to criminal 10. statutes that the same should be strictly construed will not be applicable." "19. Even otherwise as shown earlier, the wrongful withholding or property of the company has been made punishable with fine only. A substantive sentence or imprisonment can be awarded only where there is a non-compliance with the order of the Court regarding delivery or refund of the property. Obviously, this order would be passed against a specific person or persons whether an employee, past employee or a legal heir or family member of such an employee and only if such named person does not comply with the order of the Court, he would be liable to be sentenced which may extend to imprisonment for two years. At this stage, namely, where the Court would award a substantive sentence of imprisonment for non-compliance with its order the question of enlarging or widening the language of the Section cannot arise as the order would be directed against a specifically named person." 12. In a later judgment of Shubh Shanti Services Ltd. vs. Manjula S. Agarwalla & Ors., (2005) 5 SCC 30, the Hon'ble Apex Court had observed as under:- "......The main purpose to make action an offence under Section 630 is to provide a speedy and summary procedure for retrieving the property of the company where it has been wrongly obtained by the employee or officer of the company or where the property has been been lawfully obtained but unlawfully retained after termination of the employment of the employee or the officer and to impose a fine on the officer or employee of the company if found in breach of the provision of Section 630 of the Comapnies Act and further to issue direction if the court feels it just and appropriate for delivery of the possession of the property of the company and to impose a sentence of imprisonment when there is non-compliance with the order of the court regarding delivery or refund of the property of the company." 11. 13. Coming to the facts of this case, the petitionr was employed on the post of houseman. The Indian Hotel Corporation had taken over the operation of Rambag Palace Hotel and the services of the employees of Corporation therein were brought to an end (Ex. P-2). Some of the employees had been taken back in service. The petitioner had submitted an application for employment on 15.08.1972 (Ex. P-3) on which, a letter of appointment was issued to him (Ex.P-4). The petitioner was given residential quarter M-24. On attaining the age of 58 years, the petitioner had retired from service on 20.01.2000 vide letter dated 23.11.1999 (Ex. P-5). The petitioner was given allotment of the quarter through a letter (Ex. P-6). A notice for vacation of the quarter was given to the petitioner through counsel (Ex.P-7) and the postal receipts of the same had been placed on record as (Ex.P-8 and Ex.P-9). The said notice was received by the petitioner and the receipt of the same had been placed on record as (Ex.P-10). The petitioner had submitted an application to the respondent for reparing of the quarter (Ex.P- 11). The petitioner was not paid any house-rent and there was no mentioning of the same in the salary slip of the petitioner (Ex.P-12 and Ex.P-13). 14. The submissions made by the counsel for the petitioner that the premises in question had been in possession of the petitioner since the time of his ancestors and the said property was given to them by the erstwhile Rulers of Jaipur do 12. not find support from the material on record. The learned trial court had observed as under:- " मुलǔजम इस बात से इÛ कार नहȣं करता है Ǒक वह È वाट[र नà बर-एम-24 मɅ नहȣं रह रहा है बǔã क इस È वाट[र को जयपुर महाराजा Ʈारा उसके ǒपताजी को बÈ É सीश मɅ देना कहा है जबǑक इस सà बÛ ध मɅ कोई बÈ É शीसनामा पेश नहȣं Ǒकया गया है। ः वयं मुǔã जम Ʈारा È वाट[र ǐरपेयर के िलये पस[नल मैनेजर होटल रामबाग पैलेस को िलखा हआ एक पऽ इस तरह से िलखा ु गया है Ǒक-- '' ौीमान पस[नल मैनेजर सहाब ् , होटल रामबाग पैलेस, जयपुर ǒवषय:- ǒबजली खराब होने के बारे मɅ, माÛ यवर, मेरे È वाट[र के ǒबजली के ः वीज बोड[ का Ü लग खराब हो गया है उसमɅ ǒबजली नहȣं आती है कृपया उसे ठȤक करवाने का आदेश ूदान कर अनुमǑहत करɅ।, धÛ यवाद, सेवक राम कुमार मीणा, टोकन नà बर-42, हः ता¢र रामकुमार'' । उपरोÈ त पऽ से ः वयं ः पं ट हो जाता है Ǒक मुǔã जम हȣ उस È वाट[र को खुद का नहȣं मानता है यह पऽ मुǔã जम ने देना ः वीकार Ǒकया है ए से बी हः ता¢र है इसका कोई जवाब मुǔã जम के Ʈारा नहȣं Ǒदया गया है इसिलये यह बात सÛ देह से परे ः वयं साǒबत हो जाती है Ǒक मुǔã जम ǔजस È वाट[र मɅ रह रहा है वह कोई बÈ É शीस का È वाट[र नहȣं है बǔã क रामबाग पैलेस होटल कȧ Ǒकराये पर दȣ हईु सà पित है।'' Apart from the fact that the said premises was given for residence to the petitioner by respondent No.2, as is established by the aforementioned documents on record, it is to be noted that no such objection had been taken by the petitioner before the learned trial court, that the petitioner had any right in it. The learned trial court held:- " मुǔã जम के ǒवƮान अिधवÈ ता का ऐसा कोई तक[ नहȣं है, न हȣ उनकȧ ऐसी कोई आपǔ× त है Ǒक सेवा मुǔÈ त के पँ चात सà बǔÛ धत कम[चारȣ उÈ त È वाट[र मɅ ǔजसमɅ वह सेवाकाल के दौरान रहा है, मɅ रहने का अिधकार रखता हो।'' Moreover, the learned counsel for the petitioner, in support of his submissions, had placed much reliance on the ration card (No. 87142) placed on record to show that ancestors of the petitioner had been living in the said premises. But a perusal of the said ration card goes to show that the holder of it was residing at Chaukari City Palace and the Fair Price Show 13. alloted to him was in Gangauri Bazar. In other words, the said ration card, issued on 25.08.1950, is not in respect of a resident of present premises or anywhere near it because the two addresses are at a far off distance. Therefore, the submission made by the counsel for the petitioner that the premises in question was not alloted by his employers but had come to him from his ancestors which had been gifted by the erstwhile Rulers of Jaipur State, does not appear to be correct. 15. Another submission made by the counsel for the petitioner is that premises in question was not that of respondent No.2 and therefore, it was not entitled for its possession. This aspect of the matter had been thoroughly considered by the learned trial court when it had come to the conclusion that the premises in question had been taken on lease by the respondent company from S.M.S. Investment Corporation. In this regard, the learned court below had taken note of the documentary evidence, such as Ex.P-15 to Ex.P-18 and Ex.P-19 to Ex.P-22 and also the statements of Sabak Singh (PW-2), Administrator and Omprakash Sharma (PW-3) Senior Accountant Executive of the Hotel. In such view, it is clearly established that the premises, at the relevant time, was on rent with the hotel and the respondent was entitled to have the same evicted from the petitioner. 16. Coming to the next submission made by the counsel for the petitioner that the respondent failed to prove its case for 14. the offence under Section 630 of the Companies Act and therefore the order of conviction and sentence as well as eviction passed by the learned courts below are not sustainable, it may be noted that the respondent complainant had produced evidence on record to show that the petitioner was an employee. Further that the petitioner had been given residential facility as being an employee and he had not got any house from his ancestors. Furthermore, the respondents have placed on record a letter of allotment as well as report made by the petitioner. Therefore, the accommodation was granted to him by the respondent company. The dispute between the parties is that the petitioner had ceased to be in employment of the respondent Company from 20.01.2000 and thereafter, he did not had over the possession of the premises in question to it. In these circumstances, in my considered opinion the offence under Section 630 of the Companies Act against the petitioner has been proved by the complainant respondent. 17. In so far as the case law relied, on behalf of the counsel for the petitioner, is concerned it would be noted that in the case of Chandragupta Gupta (supra), the Bench of Bombay High Court had dismissed the misc. petition filed by the accused petitioner. On 15th September, 1982, the company, in the said case, terminated the services of the petitioner therein requiring him to deliver vacant possession of the flat. Upon failure by the petitioner to do so, the company, in November, 1982, filed a complaint against him under Section