2003 (8) TMI 406 - HC - Companies Law

Court upholds decision to dismiss petition, grants 8 weeks to vacate premises. Challenges rejected. Company's right to possession.

The court upheld the lower courts' decisions, dismissing the petition and granting the petitioner eight weeks to vacate the premises. The petitioner's ... Penalty for wrongful withholding of property Issues Involved:1. Maintainability of the complaint.2. Protection of possession under notifications issued by the State Government.3. Status of the petitioner as a tenant and jurisdiction of the Criminal Court.4. Discretionary relief under section 630(2) of the Companies Act.5. Strict construction of penal provisions under section 630 of the Companies Act.6. Admissibility of documents during the trial.Issue-wise Detailed Analysis:1. Maintainability of the Complaint:The petitioner contended that the complaint was not maintainable as it was filed by an employee of the company and not in the name of the company itself. The court noted that the complaint was filed by R.G. Ghag, a security officer, on behalf of the company under an authority granted by a power of attorney. The court held that although the complaint was in the name of the security officer, it was substantively for the company. The court rejected the contention, emphasizing that the possession was claimed for the company, not for the individual filing the complaint.2. Protection of Possession under Notifications:The petitioner argued that his possession was protected by notifications issued by the State Government under section 37(1) of the Maharashtra Regional and Town Planning Act, 1965. The court noted that the petitioner was in wrongful possession since December 1988, and the notifications issued in 2001 and 2002 could not have retrospective effect to legalize his wrongful possession. The court also highlighted that the notifications were under the MRTP Act and could not override the provisions of the Companies Act, which is a central enactment. The court concluded that the petitioner had no right to continue holding the premises and rejected this contention.3. Status as a Tenant and Jurisdiction:The petitioner claimed he was a tenant and not an unauthorized occupant, arguing that the issue should be decided by the Court of Small Causes under the Bombay Rent Act. The court referred to precedents where similar claims were made and rejected, emphasizing that the petitioner was a service occupier and his occupation became wrongful upon the termination of his employment. The court held that the Criminal Court had jurisdiction to entertain the complaint under section 630 of the Companies Act, and the plea of tenancy did not hold in this context.4. Discretionary Relief under Section 630(2) of the Companies Act:The petitioner argued that the relief under section 630(2) was discretionary, not mandatory. The court agreed that the word 'may' in the section indicated discretion but noted that both lower courts had correctly exercised their discretion in favor of the company. The court emphasized that the petitioner had wrongfully withheld the property for years, justifying the order for him to vacate the premises.5. Strict Construction of Penal Provisions:The petitioner contended that the penal provisions of section 630 should be strictly construed. The court rejected this argument, stating that the provision aims to recover the company's property wrongfully withheld by an employee. The court referred to Supreme Court observations that such provisions are not unreasonable or irrational and that the employee has the option to suffer imprisonment if they choose to withhold possession.6. Admissibility of Documents:The petitioner argued that the trial was vitiated because the Magistrate called upon him to admit certain documents during the examination-in-chief. The court noted that section 294 of the Cr. P. Code allows for such a procedure to save time. The court found no prejudice caused to the petitioner as he was not forced to admit the documents, and they were accepted based on his admission.Conclusion:The court found no merit in the petitioner's challenges and upheld the orders of the lower courts. The petition was dismissed, and the rule was discharged. The petitioner was granted eight weeks to vacate the premises, considering his intention to appeal to the Supreme Court.