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PETITIONER: V. M. SHAH

       Vs.

RESPONDENT: THE STATE OF MAHARASHTRA & ANR.K. RAMASWAMY, B.L.HANSARIA

DATE OF JUDGMENT25/08/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. HANSARIA B.L. (J)

CITATION:  1996 AIR  339            1995 SCC  (5) 767  JT 1995 (6)   433        1995 SCALE  (5)191

ACT:

HEADNOTE:

JUDGMENT:                            ORDER      Leave granted.      This appeal  by special  leave arises from the judgment and order  dated April  28, 1995 by the Bombay High Court in Criminal Aplicstion No.1222 of 1995.The appellant had joined the services of M/s. rallis India Ltd. on March 10, 1965. He had occupied  a  residential  flat  at  Morena  No.  11,M.C. Dhanuka road,Bombay. He resigned on july 15,1986. The Rallis India  Ltd.   ,  the   second  respondent   (the   Company., hereinafter) initiated proceedings in January , 1987 against the appellant under s.408 IPC and s.630 of the Companies Act for the  continued occupation  of the  appellant in the said flat. The  Magistrate. by  his order dated October 12, 1994, found the  appellant quality  offence  under  s.630  of  the Companies Act  and directed  restitution  of  the  flat.  on appeal, the Session judge partly allowed it by his judgement dated  March     20,   1995,  altering  the  sentence  while confirming the conviction. The High Court confirmed the same by the impugned  order.      The primary  question  in  this  case  is  whether  the conviction under  s.630 of the Companies Act sustainable? We have heard  the counsel  on  both  sides.  pending  criminal proceedings, the  company laid L.E. & C. Suit No. 104/126 of 1989 in  Small Causes  Court, Bombay  for  eviction  of  the appellant. The  case set  out in  the  plaint  and  evidence adduced in  proof of  the issues framed therein was that the Company had  tenancy rights  in the  flat.  Consequent  upon joining  the   service,  the  appellant  was  inducted  into possession. on  his resignation  and acceptance  thereof, he ceased, to  be an employee of the Company. Consequently, the appellant is  enjoined to deliver possession of the premises to the Company but he failed to do so.      The case  set up  by the appellant and evidence adduced in proof  thereof was  that there  is no  jural relationship between  the  appellant  and  the  Company.  he  is  not  in

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occupation of  the premises  in this capacity as on employee of the  Company. He  is a tenant under Mr. badani and others on a  monthly payment  of rent  to his landlord. The Company had surrendered the tenancy rights in the flat to the owners due to  dilapidation of  the  building  etc.  Thereafter,the appellant occupied the flat and was in possession thereof as a direct tenant with the landlords.      The trial  court after  considering the entire evidence recorded the findings by his judgement and decree dated June 9, 1995  holding that  the Company failed to prove that they are the  tenant in  respect of  the suit premisses. They had not given  the premises  to the  appellant under  leave  and licence agreement.  as pleaded  by them  in the  plaint. The Company failed to prove  that the appellant is a licensee of the suit premises. It also failed to prove that the premises were given  to the appellant in lieu of his services. On the other hand, the appellant proved that he is a monthly tenant of the  premises with the landlords Badami etc. Accordingly, the suit  was dismissed.  we are informed that an appeal has been field  before the bench of small Causes court and it is pending.      Sri Santosh  Hegde,  learned  senior  counsel  for  the appellant, contented  that  whatever  may  be  the  findings recorded by  the criminal  court and  affirmed by  the  High Court  on   the  liability   of  the  appellant  to  deliver possession to  the Company  by operation  of s.630(1) of the Companies Act.  they are  no longer  tenable in  view of the findings recorded  by the Civil Court, Therefore, the orders passed under  s.630(1) of  the Companies  Act is illegal and unsustainable. In  view of  the concurrent findings recorded by the  criminal courts  for offence  under s.630(1)  of the Companies Act.the  order passed  thereunder does  not become illegal. Therefore,  the appellant  is liable  to be ejected and needs no interference under Art.136 of the Constitution.      In Baldev Krishana v. Shipping corpn. of India Ltd. [Air 1987sc  2245] this  court considered  the scope of sub- s.(1)of s.630  of Companies  Act and held that an officer or an employee  of a  Company who  obtains  possession  of  any property of  the Company during the course of his employment to which  he is not entitled but for employment , if he does not deliver  possession of  such property to the Company, he would be in wrongful possession of such property. therefore, the existence  of the  relationship of  a employee.  if  the company.  having   any  property   of  the  company  in  his possession wrongfully withholds it or knowingly apples it to purposes other  than those  expressed  or  directed  in  the articles of Company and authorised by the Companies act., he will be liable for the punishment under s.630      In Atul Mthur v. Atul Kalra & Anr. [1989]4scc 514] another bench  of this  Court, held  that  because  of  mere pendency of  a suit  in a civil court it cannot be said that the civil  court is in seizin of a bona fide dispute between the parties,  and as  such the  criminal court  should  have stayed its  hands when  the Company  filed a complaint under s.630 of  the Act  Such a  view would lead to miscarriage of justice and  render  s.630  ineffective.  dispute  regarding claim of  property between  Company and its employee depends upon facts  in each case. Merely because Company’s claims to procession was  refuted by the employee, it would not amount to bona  fide dispute. the criminal court,therefore would be entitled and  competent to  proceed with  the enquiry on the complaint field  on behalf  of the  Company and  decide  the matter according to law.      Gokak Patel  Volkart Ltd.  v. D.G.  Hiremath &  Ors.[J] 1991 (1) SC  376] is also relied on Sri Maisty. Therein. the

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question was  whether the  failure to deliver possession and the  wrongful   withholding  of  the  property  would  be  a continuing offence?  This Court held that failure to deliver possession or  wrongful withholding  the property would be a continuing offence  and period of limitation must be counted Accordingly.      M.S. Shariff  v. State  of Madras  [AIR 1954 SC 3971 is also pressed  into service.  Therein this Court held that as between the  civil Court  and the  criminal proceedings, The criminal matters  should be  given precedence.  No hard  and fast  rule   can  be   laid  down  but  the  possibility  on conflicting decision in the civil and criminal Courts is not a relevant  consideration. Law envisages such an eventuality when it  expressly refrains  from making the decision of one Court binding  on the  other or  even  relevant  except  for certain limited  purposes, such  as sentences or damages The only   relevant   consideration   is   the   likelihood   of embarrassment. Another relevant factor to be noted is that a civil suit  often drags  on for  years and it is undesirable that a  criminal prosecution  should  await  till  everybody concerned has forgotten all about the crime. Public interest demands that  criminal justice should be swift and it should ensure that  the guilty  is punished  while the  events  are steel fresh  in public  mind and that the innocent should be absolved as early as is consistent with a fair and impartial trial. Another  reason is  that it  is  undesirable  to  let things slide till memories have grown too dim to trust. this however, is  not a hard and fast rule. Special consideration obtaining in  any particular case may make some other course more expedient  and just.  Therefore each  case  has  to  be considered on its own facts.      As seen  that the  civil court after full dressed trial recorded the  finding that  the appellant  had not come into possession through  the Company  but had independent tenancy rights from the principal landlord and, therefore the decree for evictions  was negatived.  until that  finding  is  duly considered  by   the  appellate  court  after  weighing  the evidence afresh and if it so warranted reversed the findings bind the  parties. The  findings recorded  by  the  criminal court,stand superseded by the findings recorded by the civil court get precedence over the findings recorded by the trial court. in  particular, in  summary trial  for offences  like s.630. the  mere pendency  of the  appeal does  not have the effect of  suspending the  operation of  the decree  of  the trial court gets nor the decree becomes inoperative.      In these  circumstances we  are clearly  of the opinion that it  cannot be  held that  the  appellant  has  been  in wrongful  possession   of  the   property     entailing  his conviction and  punishment under  s.630 of the Companies Act and requiring  handing over  of the  possession of the flat. The appeal is accordingly allowed no costs.