Court allows appeal, sets aside judgment. Company's right to property recovery upheld despite civil suit.

The appeal was allowed, and the impugned judgment was set aside. The court reaffirmed the company's right to recover possession of the property under Section 630 despite the pendency of the civil suit and the issuance of a temporary injunction. The court emphasized a liberal interpretation of Section 630 to facilitate speedy recovery of wrongfully withheld property.

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Issues Involved:
1. Maintainability of an application under Section 630(2) of the Companies Act, 1956 during the pendency of a civil suit and issue of temporary injunction.
2. Whether an order under Section 630(2) can be made prior to the final disposal of the complaint under Section 630(1).
3. Entitlement of the company to dispossess the 2nd Respondent from the property.
4. Requirement for the 2nd Respondent to be in possession of the disputed property as a perquisite of his service.
5. Justification of the High Court in exercising its inherent powers under Section 482 of the Cr.P.C.

Detailed Analysis:

1. Maintainability of an application under Section 630(2) of the Companies Act, 1956:
The court established that a company has a separate legal personality, and any orders in the civil suit between the 2nd Respondent and the vendors would not bind the appellant company as it was not a party to the suit. The court cited precedents (Damodar Das Jain v. Krishna Charan Chakraborti and Atul Mathur v. Atul Kalra) to assert that the pendency of a civil suit does not bar a complaint under Section 630 if there is no bona fide dispute regarding the company’s right over the property. The court found no bona fide dispute in this case since the 2nd Respondent’s claim was based on an oral agreement without documentary evidence, while the appellant company had at least symbolic possession through an agreement. The court concluded that a temporary injunction directing status quo does not bar the company’s right to recover the property under Section 630.

2. Whether an order under Section 630(2) can be made prior to the final disposal of the complaint under Section 630(1):
The court emphasized that Section 630 should be liberally interpreted to facilitate expeditious recovery of the company’s property. It referred to the Supreme Court’s decision in Baldev Krishna Sahi v. Shipping Corporation of India Limited, which supports granting interlocutory relief under Section 630(2) before the conclusion of the trial under Section 630(1). The court noted that the provision aims to prevent wrongful retention of property and should be construed to favor the aggrieved company.

3. Entitlement of the company to dispossess the 2nd Respondent from the property:
The court criticized the High Court’s strict interpretation requiring the company to have title to the property and for the accused to possess the property as a perquisite of service. The court clarified that Section 630 focuses on whether the accused wrongfully possesses the property, even if the company does not own it. The 2nd Respondent admitted the property was transferred to the appellant company, and the court found that the company had the exclusive right to possess the property since the agreement dated 26.4.2008. The court dismissed the 2nd Respondent’s argument about being misled into delivering the title documents.

4. Requirement for the 2nd Respondent to be in possession of the disputed property as a perquisite of his service:
The court noted that Section 630 does not require the property to be allotted as a perquisite of service. It is sufficient that the accused was put into possession of the property in their capacity as an officer/employee and continued to withhold it without any independent right after cessation of employment. The court found that the 2nd Respondent’s claim of an oral agreement did not establish an independent right to the property.

5. Justification of the High Court in exercising its inherent powers under Section 482 of the Cr.P.C:
The court held that the High Court’s powers under Section 482 should only be exercised in exceptional cases of illegality or lack of jurisdiction. The interlocutory order under Section 630(2) was based on a prima facie assessment and did not conclusively decide the ongoing trial. The court found no exceptional case warranting the exercise of inherent powers by the High Court. However, the court agreed with the High Court’s direction for the trial under Section 630(1) to be completed expeditiously and noted that any decree in favor of the 2nd Respondent in the civil suit must be honored.

Conclusion:
The appeal was allowed, and the impugned judgment was set aside. The court reaffirmed the company’s right to recover possession of the property under Section 630 despite the pendency of the civil suit and the issuance of a temporary injunction. The court emphasized a liberal interpretation of Section 630 to facilitate speedy recovery of wrongfully withheld property.

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