1995 (3) TMI 385 - HC - Companies Law

High Court finds accused guilty of wrongfully withholding company property, orders eviction within 90 days

Prahladbhai Rajaram Mehta Versus Popatbhai Haribhai Patel

The High Court overturned the trial court's acquittal and found the accused guilty under section 630 of the Companies Act for wrongfully withholding the ... Penalty for wrongful with holding of property Issues Involved:1. Whether the accused is a lessee or a licensee.2. Whether prosecution under section 630 of the Companies Act is maintainable.3. Whether section 630 of the Companies Act overrides the provisions of the Bombay Rent Act.4. Whether the trial court erred in acquitting the accused.5. Whether the accused is liable for wrongful withholding of the company's property.6. Whether the prosecution is barred by limitation.7. Whether the matter should be remanded back to the trial court.8. Whether the discretionary provisions of section 630(2) should be invoked against the accused.Detailed Analysis:1. Whether the accused is a lessee or a licensee:The trial court concluded that the accused was a lessee (tenant) and not a licensee based on the agreements between the company and the accused. The complainant argued that this finding was perverse and erroneous. The High Court noted that the possession of the disputed room was given to the accused due to his employment and was conditional upon his remaining in the service of the company.2. Whether prosecution under section 630 of the Companies Act is maintainable:The High Court emphasized that section 630 provides a speedy remedy for the company when its property is wrongfully withheld by a service-employee. The court held that even if the accused is considered a tenant, the criminal complaint under section 630 of the Companies Act is still maintainable. The court rejected the trial court's view that section 630 is not applicable against a tenant.3. Whether section 630 of the Companies Act overrides the provisions of the Bombay Rent Act:The High Court determined that the provisions of section 630 of the Companies Act are not repugnant to the Bombay Rent Act. The court held that both statutes provide concurrent remedies, and the company has the option to pursue either remedy. The court emphasized that the provisions of section 630 should be interpreted harmoniously with the Bombay Rent Act to advance the object of both statutes.4. Whether the trial court erred in acquitting the accused:The High Court found the trial court's acquittal order to be perverse and illegal. The trial court failed to appreciate the evidence and the legal provisions correctly. The High Court reversed the acquittal, holding the accused guilty under section 630 of the Companies Act.5. Whether the accused is liable for wrongful withholding of the company's property:The High Court held that the accused wrongfully withheld the company's property after the termination of his service. The court noted that the accused was obligated to return the property upon retirement but failed to do so, thus committing an offense under section 630 of the Companies Act.6. Whether the prosecution is barred by limitation:The High Court rejected the contention that the prosecution was barred by limitation. The court applied section 472 of the Code of Criminal Procedure, which provides that in the case of a continuing offense, a fresh period of limitation begins to run at every moment during which the offense continues. The court held that wrongful withholding of the company's property is a continuing offense.7. Whether the matter should be remanded back to the trial court:The High Court dismissed the request to remand the matter back to the trial court, stating that it would only serve to delay the proceedings. The court found no merit in this contention.8. Whether the discretionary provisions of section 630(2) should be invoked against the accused:The High Court exercised its discretion under section 630(2) of the Companies Act, directing the accused to deliver up and hand over possession of the disputed property within 90 days, failing which he would suffer rigorous imprisonment for one month. The court also imposed a fine of Rs. 500 on the accused.Conclusion:The High Court allowed the appeal, setting aside the trial court's order of acquittal. The accused was found guilty under section 630 of the Companies Act and was directed to vacate the company's property within 90 days or face imprisonment. The court imposed a fine of Rs. 500 on the accused, considering his age and other circumstances.