Wrongful withholding of company property not stayed by parallel civil suit or temporary injunction

A criminal proceeding for wrongful withholding of company property was not stayed merely because a civil suit for specific performance and an ad interim injunction were pending. The court held that section 630 is aimed at speedy relief against wrongful retention of company property, and the criminal forum is not required to decide title. The admitted ownership of the flat by the company left only the issue of unlawful possession for determination. The alleged oral agreement created no interest in the property, the doctrine of part performance was inapplicable, and a temporary injunction could not confer a lawful right to retain possession. The stay prayer was rejected and the prosecution was allowed to continue.

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Issues: Whether the criminal proceeding under section 630 of the Companies Act could be stayed pending disposal of the civil suit for specific performance and interim injunction, on the footing that there was a bona fide civil dispute concerning the flat and an ex parte injunction had been granted by the civil court.

Analysis: Section 630 is intended to give speedy relief to a company when its property is wrongfully withheld by an officer or employee. The criminal court is concerned with wrongful withholding of company property, not with adjudication of title; the admitted ownership of the flat by the company left only the question of wrongful retention for determination. The alleged oral agreement for sale did not create any interest in the property, and the doctrine of part performance was inapplicable. The civil suit, based on the same alleged agreement, did not show a bona fide dispute of such a character as to oust the criminal court's jurisdiction. A temporary injunction could not enlarge the substantive right of the petitioners or render their possession lawful where no such right had accrued. Mere pendency of civil proceedings and an ad interim injunction did not, by themselves, justify stay of the criminal prosecution.

Conclusion: The prayer for stay of the criminal proceeding was rejected. The criminal court was held competent to proceed under section 630, and the proceedings were not liable to be stayed on account of the civil suit or injunction.

Final Conclusion: The revisional challenge failed, and the criminal proceeding was directed to continue without interference.

Ratio Decidendi: In a prosecution under section 630 of the Companies Act, a criminal proceeding will not be stayed merely because a civil suit for specific performance and an interim injunction are pending, unless the civil dispute is truly bona fide and raises a genuine issue beyond the criminal court's limited inquiry into wrongful withholding of company property.

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