Case: Gopika Chandrabhushan Saran  Vs. M/S Xlo India Ltd

3. In order to answer the aforesaid issue it would be necessary to set out the facts leading to filing of the case in which the aforesaid issue was raised and came to be considered:Mr. Chandra Bhushan Saran (since deceased) father of appellant no. 1 and maternal grandfather of appellant no. 2 was allotted third floor residential premises of the building "Devenshire House", Westfield Estate, at Bhulabhia Desai Road, Mumbai (hereinafter referred to as "suit premises") since he was appointed as a Director and Technical Advisor of one M/s Automobile Products of India Ltd. (for short "API Ltd."). Subsequently he was appointed as Managing Director of the said company. The suit premises was owned by Her Highness Vijaya Raje Scindia Maharani of Gwalior and was taken on lease by the API Ltd. for the residential needs of itsMr. C. B. Saran resigned as Managing Director and later on also as its Director. Subsequent to his resignation as Managing Director, he was appointed as the Managing Director of Ex-Cello Ltd., respondent No. 1 herein. Mr. C. B. Saran made a representation to the then Chairman of the API Ltd., that as a Managing Director of the respondent No. 1 company he was entitled to rent free accommodation and for the sake of convenience the API Ltd. may execute a licence agreement in respect of the suit premises in favour of respondent no. 1, who in turn may permit him to occupy the suitrequest of Mr. C.B. Saran was considered favourably in the Board Meeting dated 12.06.1968 in which Mr. Saran was also present as a Director. Accordingly, Mr. C. B. Saran along with his family, which consisted of his wife, son and daughter, continued to occupy the said premises.C. B. Saran expired in Germany on 16.07.1980 and on his demise his son Mr. Sanjay Saran, who was Joint Managing Director became the Managing Director of the respondent no. 1 company. By virtue of his employment with respondent No. 1 the suit premises was allotted in his favour and the appellant no. 1 being sister of Mr. Sanjay Saran and appellant no. 2 being his nephew continued to stay in the suit premises.It is pertinent to mention here that in the year 1976 API Ltd. filed a suit before Ld. Small Causes Court against the respondent no. 1 and Mr. C. B. Saran being suit no. 206/519 of 1976 disputing the tenancy right in relation to the suit property. After the demise of Mr. C. B. Saran his legal heirs, including the appellant No. 1, were substituted in the said suit.On 20.03.2002 the respondent no. 1 also issued a letter to Mr. Sanjay Saran stating that they are in need of the premises and the suit premises should be vacated. In terms of the said letter Mr. Sanjay Saran vacated the premises but however the appellants continued to hold the possession of the said premises and refused to surrender the possession. On the other hand, the present appellants along with Smt. Minal Saran (since deceased), mother of appellant No.1 and Mr. Sanjay Saran challenged the right of respondent No. 1 - company to demand possession of the suit premises.6. The appellants also filed a suit before the Small Causes Court being R.A.D Suit No. 502/2004. Another suit was filed by the appellants before the Small Causes Court being R.A.D. Suit No. 1495/2007 against API Ltd. and Her Highness Vijaya Raje Scindia, Maharani of Gwalior, alleging that Mr. C. B. Saran had executed a sub-tenancy in favour of her mother and Mr. C. B. Saran was inducted in the suit premises as a tenant by API Ltd. in or about June, 1968 on a monthly rental of Rs. 1400/-. In the later suit status quo order was passed which was extended subsequently.7. The respondent no. 1 instituted a proceeding on 04.03.2004 under section 630 of the Act which was numbered as CC No. 74/SS/2005 against the present appellants and mother of appellant no. 1. The Additional Chief Metropolitan Magistrate vide order dated 26.06.2007 found the appellants guilty under Section 630 of the Act and a sentence of Rs. 5,000/- was imposed on each of the accused-appellant with default stipulation of simple imprisonment for 15 days. The appellants were directed to vacate the suit premises within 4 months from the date of said order and in default to suffer simple imprisonment for 4 months.8. Being aggrieved by the said order the appellants filed a criminal appeal before the Sessions Judge which was dismissed. As the mother of appellant No. 1 died on 29.11.2007 her appeal stood abated. Against the said dismissal the two appellants preferred a criminal revision application before the High Court of Bombay. The learned Single Judge heard the parties on merits and dismissed the appeal. The learned Single Judge while upholding the order of the courts below held that the appellants were liable to be convicted under Section 630 of the Act as they withhold the delivery of the property of respondent No. 1 - company. In terms of the prayer made by the learned counsel appearing for the appellants, the learned Single Judge granted stay of eight weeks to approach the higher court, subject to an undertaking that in the event of their failing before the higher court, they shall vacate and hand over vacant and peaceful possession of the suit premises to respondent no. 1.9. It is against the said order that the appellants have approached this Court.In order to answer the aforesaid issue it would be necessary to set out the facts leading to filing of the case in which the aforesaid issue was raised and came to be considered:Mr. Chandra Bhushan Saran (since deceased) father of appellant no. 1 and maternal grandfather of appellant no. 2 was allotted third floor residential premises of the building "Devenshire House", Westfield Estate, at Bhulabhia Desai Road, Mumbai (hereinafter referred to as "suit premises") since he was appointed as a Director and Technical Advisor of one M/s Automobile Products of India Ltd. (for short "API Ltd."). Subsequently he was appointed as Managing Director of the said company. The suit premises was owned by Her Highness Vijaya Raje Scindia Maharani of Gwalior and was taken on lease by the API Ltd. for the residential needs of itsMr. C. B. Saran resigned as Managing Director and later on also as its Director. Subsequent to his resignation as Managing Director, he was appointed as the Managing Director of Ex-Cello Ltd., respondent No. 1 herein. Mr. C. B. Saran made a representation to the then Chairman of the API Ltd., that as a Managing Director of the respondent No. 1 company he was entitled to rent free accommodation and for the sake of convenience the API Ltd. may execute a licence agreement in respect of the suit premises in favour of respondent no. 1, who in turn may permit him to occupy the suitt of Mr. C.B. Saran was considered favourably in the Board Meeting dated 12.06.1968 in which Mr. Saran was also present as a Director. Accordingly, Mr. C. B. Saran along with his family, which consisted of his wife, son and daughter, continued to occupy the said premises.C. B. Saran expired in Germany on 16.07.1980 and on his demise his son Mr. Sanjay Saran, who was Joint Managing Director became the Managing Director of the respondent no. 1 company. By virtue of his employment with respondent No. 1 the suit premises was allotted in his favour and the appellant no. 1 being sister of Mr. Sanjay Saran and appellant no. 2 being his nephew continued to stay in the suit premises.It is pertinent to mention here that in the year 1976 API Ltd. filed a suit before Ld. Small Causes Court against the respondent no. 1 and Mr. C. B. Saran being suit no. 206/519 of 1976 disputing the tenancy right in relation to the suit property. After the demise of Mr. C. B. Saran his legal heirs, including the appellant No. 1, were substituted in the said suit.n 20.03.2002 the respondent no. 1 also issued a letter to Mr. Sanjay Saran stating that they are in need of the premises and the suit premises should be vacated. In terms of the said letter Mr. Sanjay Saran vacated the premises but however the appellants continued to hold the possession of the said premises and refused to surrender the possession. On the other hand, the present appellants along with Smt. Minal Saran (since deceased), mother of appellant No.1 and Mr. Sanjay Saran challenged the right of respondent No. 1 - company to demand possession of the suit premises.6. The appellants also filed a suit before the Small Causes Court being R.A.D Suit No. 502/2004. Another suit was filed by the appellants before the Small Causes Court being R.A.D. Suit No. 1495/2007 against API Ltd. and Her Highness Vijaya Raje Scindia, Maharani of Gwalior, alleging that Mr. C. B. Saran had executed a sub-tenancy in favour of her mother and Mr. C. B. Saran was inducted in the suit premises as a tenant by API Ltd. in or about June, 1968 on a monthly rental of Rs. 1400/-. In the later suit status quo order was passed which was extended subsequently.7. The respondent no. 1 instituted a proceeding on 04.03.2004 under section 630 of the Act which was numbered as CC No. 74/SS/2005 against the present appellants and mother of appellant no. 1. The Additional Chief Metropolitan Magistrate vide order dated 26.06.2007 found the appellants guilty under Section 630 of the Act and a sentence of Rs. 5,000/- was imposed on each of the accused-appellant with default stipulation of simple imprisonment for 15 days. The appellants were directed to vacate the suit premises within 4 months from the date of said order and in default to suffer simple imprisonment for 4 months.8. Being aggrieved by the said order the appellants filed a criminal appeal before the Sessions Judge which was dismissed. As the mother of appellant No. 1 died on 29.11.2007 her appeal stood abated. Against the said dismissal the two appellants preferred a criminal revision application before the High Court of Bombay. The learned Single Judge heard the parties on merits and dismissed the appeal. The learned Single Judge while upholding the order of the courts below held that the appellants were liable to be convicted under Section 630 of the Act as they withhold the delivery of the property of respondent No. 1 - company. In terms of the prayer made by the learned counsel appearing for the appellants, the learned Single Judge granted stay of eight weeks to approach the higher court, subject to an undertaking that in the event of their failing before the higher court, they shall vacate and hand over vacant and peaceful possession of the suit premises to respondent no. 1.9. It is against the said order that the appellants have approached this Court.

Court's reasoning:
We are in respectful agreement with the above view and are of the opinion that the legal representatives or the heirs of the deceased employee or officer would squarely fall within the ambit of Section 630 of the Act. To exclude them by giving a restrictive interpretation to the provisions would defeat the very object of the provision which declares the wrongful withholding of the property of the company to be an offence. It is immaterial whether the wrongful withholding is done by the employee or the officer or the past employee or the past officer or the heirs of the deceased employee or the officer or anyone claiming their right of occupancy under such an employee or an officer. It cannot be ignored that the legal heirs or representatives in possession of the property had acquired the right of occupancy in the property of the company, by virtue of being family members of the employee or the officer during the employment of the officer or the employee and not on any independent account. They, therefore, derive their colour and content from the employee or the officer only and have no independent or personal right to hold on to the property of the company. Once the right of the employee or the officer to retain the possession of the property, either on account of termination of services, retirement, resignation or death, gets extinguished, they (persons in occupation) are under an obligation to return the property back to the company and on their failure to do so, they render themselves liable to be dealt with under Section 630 of the Act for retrieval of the possession of the property.e capacity, right to possession and the duration of occupation are all features which are integrally blended with the employment. Once the right of the employee or the officer to retain the possession of the property, either on account of termination of services, retirement, resignation or death, gets extinguished, they (persons in occupation) are under an obligation to return the property back to the company and on their failure to do so, they render themselves liable to be dealt with under Section 630 of the Act for retrieval of the possession of the property.The ratio laid down in the above said two cases makes it explicitly clear that Section 630 of the Act will cover within its ambit not only the employee or officer but also the past employee or the past officer or the heirs of the deceased employee or anyone claiming under them in possession of the property. The legal heirs or representatives in possession of the property acquire the right of occupancy in the property of the company, by virtue of being family members of the employee or the officer during the employment of the employee or the officer and not on any independent account. They, therefore, derive their colour and content from the employee or the officer only and have no independent or personal right to hold on to the property of the company.The case in hand is the one which falls under the first part of clause (b) of sub-section (1) of Section 630. The suit premises was allotted to Mr. C. B. Saran, the predecessor-in-interest of the appellants, in his capacity as a Managing Director of the respondent company. The appellants herein had no direct relationship with the respondent company. Both of them came in possession of the suit premises through the original allottee of the said premises, namely, Mr. C. B. Saran, who has since died. The company has every right and jurisdiction to preserve its property and to see that the same is not used for purposes other than the one expressed or directed in the articles of association of the company. On a careful reading of the ratio of the decisions in Abhilash Vinodkumar Jain (supra) and Lalita Jalan (supra), it is explicitly clear that they are squarely applicable to facts of the present case. When the legal representatives of the original allottee withhold the property wrongfully the company is entitled to invoke the provisions of Section 630 of the Act so as to retrieve the property being withheld wrongfully. The above quoted decisions have also laid down thatall those who have come in possession of the premises with the express or implied consent of the employee and have not vacated the premises would be withholding the delivery of the property to the company and, therefore, they are liable to be prosecuted under Section 630 of the Actas is done in the present case.Considering the facts and circumstances of the present case, we hold that the respondent company was within its jurisdiction to get the suit premises vacated under the provisions of Section 630 of thealso hold that the learned courts below were justified in arriving at a finding that the provisions of Section 630 of the Act are applicable to the facts and circumstances of the present