1999 (6) TMI 418 - HC - Companies Law

Company can pursue criminal & civil cases against ex-employee for possession & damages under Companies Act.

The court allowed the company to proceed with criminal proceedings under section 630 of the Companies Act, 1956, concurrently with a civil suit for ... Offences - Penalty for wrongful withholding of property Issues involved:1. Whether the pendency of a civil suit for possession and damages bars or necessitates a stay in criminal proceedings under section 630 of the Companies Act, 1956.Analysis:1. The case involved a criminal revision against an order passed by the Additional Sessions Judge related to a dispute between a company and its former employee regarding the possession of a flat. The employee, who retired from the company, did not vacate the flat as per the agreement, leading to a criminal complaint under section 630 of the Companies Act, 1956. Despite directions for expedited proceedings, delays occurred, and the employee sought a stay in the criminal proceedings due to the pendency of a civil suit filed by the company for possession and damages.2. The employee argued that the pendency of the civil suit should either quash or stay the criminal proceedings based on precedents citing cases where criminal charges of breach of trust were involved. However, the court differentiated the present case as a dispute between an employer and an employee, where the company had a cause of action under section 630. The court emphasized that the existence of a civil remedy does not render section 630 inoperative, allowing simultaneous civil and criminal proceedings. Precedents were cited to support this stance, highlighting the importance of not staying criminal proceedings based solely on the existence of a civil suit.3. The court concluded that based on the facts and circumstances of the case, the company could pursue relief under civil law and section 630 simultaneously. It set aside the order of the Additional Sessions Judge, allowing the continuation of the criminal proceedings under section 630 without a stay, directing the lower court to conclude the proceedings promptly. The court emphasized the importance of upholding the salutary provision of section 630 and ensuring effective legal recourse for the company in seeking possession of the disputed flat.4. In the final directive, the court ordered the communication of the decision to the lower court at the petitioner's cost, emphasizing the need for expeditious proceedings and the allowance of both civil and criminal actions to address the dispute effectively.