Amalgamation and wrongful withholding: prosecution may continue through the successor company, and a later flat sale does not defeat liability.

A company's amalgamation did not terminate criminal proceedings under section 630 of the Companies Act, 1956; pending prosecution could continue through the transferee company with the court's permission, and the later sale of the flat did not erase liability because the relevant conduct was assessed at the time of alleged wrongful withholding. An imperfectly described vakalatnama, without more, did not establish forgery or fabrication under the Indian Penal Code, 1860; at most it could be rejected as defective. The charge was sustained, the revision failed, and the successor company was left to seek formal continuation of the prosecution.

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Issues: (i) whether the prosecution initiated by the transferor company could continue after amalgamation and whether the subsequent sale of the flat affected the maintainability of the charge under section 630 of the Companies Act, 1956; (ii) whether the signing of the vakalatnama without describing the old company or designation amounted to forgery or other offences under the Indian Penal Code, 1860.

Issue (i): whether the prosecution initiated by the transferor company could continue after amalgamation and whether the subsequent sale of the flat affected the maintainability of the charge under section 630 of the Companies Act, 1956.

Analysis: The original complainant company had ceased to exist after amalgamation, and the scheme of amalgamation as well as section 394 of the Companies Act, 1956, showed that pending proceedings could be continued by the transferee company. The Court also relied on section 302 of the Code of Criminal Procedure, 1898, to hold that where the original complainant is no longer in existence, the prosecution may be continued by an successor. The subsequent sale of the flat did not erase the alleged offence, because the relevant inquiry was the state of affairs on the date of the alleged wrongful withholding and the complaint.

Conclusion: The framing of charge was sustained, but the transferee company alone was to seek permission to continue the prosecution under section 302 of the Code of Criminal Procedure, 1898; the subsequent sale of the property did not defeat the prosecution.

Issue (ii): whether the signing of the vakalatnama without describing the old company or designation amounted to forgery or other offences under the Indian Penal Code, 1860.

Analysis: The Court held that an imperfectly described vakalatnama may at most be liable to rejection, but the omission did not establish forgery or fabrication. Since the officer was shown as representing the company and was acquainted with the facts, he was competent to act and give evidence; no material showed commission of the alleged penal offences.

Conclusion: No offence was made out against the officer on the basis of the vakalatnama.

Final Conclusion: The revision and the connected criminal application were rejected, while the trial was left to proceed with liberty to the successor company to seek formal continuation of the prosecution.

Ratio Decidendi: Where a complainant company ceases to exist on amalgamation, pending criminal proceedings may be continued by the transferee company with the court's permission, and subsequent transfer of the property does not by itself nullify liability for wrongful withholding under section 630 of the Companies Act, 1956.

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