1991 (5) TMI 218 - HC - Companies Law

High Court sets aside stay order in Companies Act case, criminal proceedings to continue, civil litigation not a bar.

The High Court set aside the stay order issued by an Additional Sessions Judge in a case involving section 630 of the Companies Act, 1956. The Court held ... Penalty for wrongful withholding of property Issues:Interference with stay order by Additional Sessions Judge regarding proceedings under section 630 of the Companies Act, 1956 pending before Additional Chief Metropolitan Magistrate.Detailed Analysis:The judgment by V.B. Bansal, J. pertains to Criminal Revisions involving a common question of whether the stay order dated February 12, 1990, issued by an Additional Sessions Judge in cases related to section 630 of the Companies Act, 1956, requires intervention by the High Court. The case involves Texmaco Ltd., a public limited company, which acquired a housing colony for its employees through a scheme of arrangement with Birla Cotton, Spinning and Weaving Mills Limited. An ex-employee, Ram Dayal, who retired in 1989, allegedly did not vacate the quarters as required by the company, leading to charges under section 630 of the Companies Act and other offenses under the Indian Penal Code. The Additional Chief Metropolitan Magistrate summoned Ram Dayal as an accused based on preliminary evidence.Ram Dayal sought a stay on the proceedings pending a civil case, and the Additional Chief Metropolitan Magistrate initially decided to continue the proceedings but withhold the judgment until the civil case's outcome was determined. Ram Dayal challenged this decision before the Additional Sessions Judge, who granted a stay on the proceedings until the civil litigation was resolved. However, the High Court, after considering arguments from both parties, found that the criminal proceedings cannot be stayed solely due to the existence of civil litigation between the parties. The High Court allowed the revision petitions, setting aside the stay order issued by the Additional Sessions Judge, and directed the trial court to proceed further in accordance with the law.The High Court highlighted that while the respondents raised additional pleas in the trial court and before the High Court, these pleas were not the subject of adjudication in the revision petition. It was emphasized that the trial court would address the raised pleas during the proceedings, and the criminal proceedings should not be halted based solely on the ongoing civil litigation. As a result, the impugned order of February 12, 1990, by the Additional Sessions Judge was overturned, and the trial court was instructed to continue with the case as per legal procedures. The parties were directed to appear before the trial court on a specified date for further proceedings.