Vs. Atul Kalra & Anr  INSC 229 (8 August 1989)
S. (J) Natrajan, S. (J) Pandian, S.R. (J)
1989 SCR (3) 750 1989 SCC (4) 514 JT 1989 (3) 350 1989 SCALE (2)239
Act 1956--Section 630---Officer or employee of Company--Refusing to vacate flat
after resignation from service-Prosecution on complaint--Whether maintainable.
appellant-Company took a fiat No. 84, Mehr-Dad, Cuffe Parade, Bombay, from its
owner Mehdi Mandil on leave and licence basis for the residence of its
Officers'/Employees'. The first Respondent, Divisional Manager of the Company
at Bombay, acted as power of attorney of the
Company and executed the agreement with the land-lord for leave and licence
initially for a period of 11 months renewable for a total period of 66 months.
The agreement also provided for an advance payment of Compensation amounting to
Rs. 16,500 monthly compensation of Rs. 1500 and a deposit of Rs.3,50,000 to be
returned at the end of the licence period free of interest. The company
complied with all the terms of the agreement.
1.11.80, the appellant Company allowed the first Respondent to occupy the flat
as company's employee. Three years later i.e. on 23.3.84, the first Respondent
filed a suit in the Court of Small Causes Bombay against the Company and the
owner of the flat for a declaration that he was the actual licencee of the flat
and for a permanent injunction to restrain the defendants from interfering with
his possession of the flat. He based his claim as a licencee on the basis of
two letters dated 25.1.84 and 1.2.84 written by the Manager of the Company, one
Mr. Jain. Three days after filing the said suit, first Respondent resigned and
his letter of resignation was accepted by the company on 27.3.84.
the first Respondent, ex-employee of the company did not vacate the flat, the
company filed a complaint against him under Section 630 of the Companies Act
before the_ Addl. Chief Metropolitan Magistrate, Bombay. The Complaint was filed by Mr. Atul Mathur, as attorney of
the company, who by then had taken over the place vacated by the first
The trial Magistrate found the first respondent guilty under Section 630 of the
Company's Act and sentenced him to pay a fine of Rs. 1,000 and directed to
deliver vacant possession of the fiat to the company. In lieu of payment of
fine aforesaid, first respondent was directed to undergo simple imprisonment
for 3 months.
first respondent preferred an appeal to the Session Court against the order of
the Trial 'Magistrate. By his order dated 22.10.86, the Addl. Sessions Judge,
Greater Bombay dismissed the appeal. Thus both the trial court as also the
first appellate Court concurrently found that the company was the real licencee.
the first Respondent filed a Petition under Article 227 of the Constitution
before the High Court, which later, he was permitted to convert as one under
Sec. 482 of the code of criminal procedure. The first Respondent contended
before the High Court:
That the complaint was not properly filed inasmuch as the complainant was not
duly authorised by the company which irregularity vitiated the proceedings;
That the Addl. Chief Judl. Magistrate had no jurisdiction to adjudicate such a
complicated matter in summary proceedings under Section 630 of the Companies
The Addl. Sessions Judge had wrongly cast the burden of proof on the accused.
High Court rejected the contentions (1) and (3) and came to the conclusion that
the letters written by Mr. Jain afforded basis for the first respondent to bona
fide dispute the company's claim for possession of the flat. The High Court
also took the view that the first respondent having filed civil suit earlier in
point of time, the Criminal Court ought to have stayed its hand and allowed the
Civil Court to adjudicate upon the issue.
Das Jain v. Krishna Charan Chakraborti & Anr.,
 57 Com. Cases.
by the High Court's order allowing the first Respondent's Writ Petition, the
company has filed this appeal by special leave and the question that fails for
determination by the Court is whether the High Court was right in reversing the
Judgments of the Courts below in a matter arising under Section 630 of the
company's Act in exercise of its powers under section 482, Cr.P.C.
the appeal and granting time to the first Respondent till 752 30.9.89 to vacate
the flat in question, this Court,
The term "Officer or Employee" m Section 630 of the Company's Act
applies not only to existing officers or employees but also to past employees
or officers if such officer or employee either wrongfully obtains possession of
any property or having obtained the possession during his employment withholds
the same after the termination of his employment. Sh. Baldev Krishna Sahi v. Shipping Corpn. of India
Ltd.,  IV SCC 361 and Amrit Lal Chum v.Devo Prasad Dutta Roy,  2
SCC 269. [758C] Merely because the first respondent had schemingly filed a suit
before tendering-his resignation, it can never he said that the Civil Court was
in seisin 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
Section 630. If a view is mechanically taken that whenever a suit has been
flied before a complaint is laid under Section 630, the Criminal Court should
not proceed with the complaint, it would not only lead to miscarriage of
justice but also render ineffective the salutory provisions of Section 630.
[763E-F] What has to he seen in a complaint under Section 630 is whether there
is "no dispute or no bona fide dispute" regarding a property claimed
by the company between the company and its employee or ex-employees. It is
needless to say that every dispute would not become a bona fide dispute merely
because the company's claim to possession is refuted by an employee or
ex-employee of the company. As to when a dispute would amount to a bona-fide
dispute would depend upon the facts of each case. [764E] The Court set aside
the judgment of the High Court and restored those of the Additional Chief
Metropolitan Magistrate and the Addl. Sessions Judge. [766C] Damodardas v. Krishna Charan Chakraborti & Anr.,
 4 Judgment Today p. 714. and Ballavdas Agarwala v. Shri J.C.
 2 S.C.R. 739, referred to.
APPELLATE JURISDICTION: Criminal Appeal No. 549 of 1987.
the Judgment and Order dated 23.2.87 of the Bombay High Court in Crl. W.P. No.
96 of 1986.
Anil B. Divan, V.P. Vashi, Ms. Naina Kapur and K.J. John for the Appellant.
S. Mullik, A.S. Bhasme, Ms. Kamini Jaiswal and A.M. Khanwilkar for the
Judgment of the Court was delivered by NATARAJAN, J. What falls for
consideration in this appeal by special leave is whether the High Court has
erred in law in setting aside the judgments of the courts below in a matter
arising under Section 630 of the Companies Act in exercise of its powers under
Sec. 482, Cr.P.C.
facts are as under:--Messers Jenson and Nicholson (India) Ltd. (appellant company), had
secured a flat in Bombay (No. 84, Mehr-Dad, Cuffe Parade)
belonging to one Mehdi Mandil, on leave and licence basis for the residential
occupation of the flat by its officers/employees. The leave and licence
agreement was entered into on behalf of the company by the Ist respondent who
was then the Divisional Sales Manager of the company at Bombay, the registered
office of the company being at Calcutta. It is common ground the Ist respondent
acted on behalf of the company under a Power of Attorney executed in his favour
by the company. The leave and licence was for an initial period of 11 months
but subject to renewal for a total period of 66 months. The agreement provided
for payment of advance compensation of Rs. 16,500 for 11 months and a monthly
compensation of Rs. 1,500 and a deposit of Rs.3,50,000 free of interest to be
returned at the end of the licence period. The company paid the deposit and the
advance compensation and was paying the monthly compensation of Rs. 1,500
thereafter. On taking possession of the flat on 1.11.1980, the company allowed
the 1st respondent to occupy it as an employee of the company.
than three years later, i.e. on 23.3.1984, the Ist respondent filed a suit
(Suit No. 1360/84) in the Court of Small Causes, Bombay against the company and
the owner of the flat for a declaration-that he is the actual licencee of the
flat and for permanent injunction to restrain the defendants from interfering
with his possession of the flat.
respondent claimed to be the licencee of the flat on the basis of two letters
dated 25.1.1984 and 1.2.1984 written to him by a junior employee of the
company, viz. one Mr. Jain who was the Officer Manager of the company at Bombay and working under the Ist respondent.
In those letters Mr. Jain has made it appear that the Ist respondent was the
tenant of the flat. Besides the reliefs-of declaration and injunction, certain
other reliefs such as fixation of standard rent etc. were also asked for in the
suit against the owner of the flat. Three days after the 754 filing of the suit
i.e. on 26.3.1984, the Ist respondent tendered a letter of resignation to the
company and his resignation was accepted by the Management on 27.3.84. In
accordance with his claim to be the licencee of the flat, the Ist respondent
offered to reimburse the company the deposit amount of Rs.3,50,000 but the
company declined the offer and asserted that it was the licencee of the flat
and not the Ist respondent.
Ist respondent failed to vacate the flat after resigning his post, the company
filed a complaint against him under Section 630 of the Companies Act in the
Court of the Additional Chief Metropolitan Magistrate, Bombay. The complaint was filed on behalf
of the company by its power of attorney Mr. Atul Mathur who had been appointed
as Divisional Sales Manager, Bombay in
place of the Ist respondent after his resignation. The Additional Chief
Metropolitan Magistrate took the complaint on file and after trial found the Ist
respondent guilty under Section 630 of the Companies Act and sentenced him to
pay a fine of Rs. 1,000 and also directed him to deliver possession of the flat
to the company on or before 15.6.87 in default to suffer S.I. for three months.
Against the said judgment, the Ist respondent preferred an appeal to the
Sessions Court but by judgment dated 22.10.1986, the Addl. Sessions Judge,
Greater Bombay dismissed the appeal. The Trial Magistrate as well as the
Appellate Court concurrently' held that the company was the licencee of the
flat, that the Ist respondent had acted only as the power of attorney of the
company in entering into the agreement, that his occupation of the fiat was
only as an employee of the company and consequently the Ist respondent was in
unlawful occupation of the flat after he ceased to be an employee of the
company. The Ist respondent was therefore directed to deliver possession of the
flat to the company.
the concurring judgments rendered against him, the Ist respondent filed a
petition before the High Court under Article 227 of the Constitution but at the
time of arguments, he was permitted to convert the petition into one under
Section 482, Code of Criminal Procedure. Three contentions as under were urged
before the High Court to assail the judgments of the Courts below:
complaint had been filed by a person without due authority to act on behalf of
the company and this irregularity vitiated the entire proceedings,
Additional Session Judge had wrongly cast the burden of proof on the accused
and he wrong approach has vitiated the judgment of the First Appellate Court.
Since complicated questions of title were involved, the Additional Chief
Metropolitan Magistrate had no jurisdiction or competence to adjudicate the
matter in summary proceedings under Section 630 of the Companies Act.
first two contentions did not find favour with the High Court. On the first
contention, the High Court held that though the power of attorney conferred
only special powers on Mr. Atul Mathur to act on behalf of the company only in
civil suits, sales tax proceedings and excise matters. Mr. Atul Mathur could
still validly file the complaint as he was an officer of the company in the
rank of Manager and could therefore validly act on behalf of the company.
High Court further held that even if Mr. Atul Mathur did not have the requisite
competence to file the complaint, the irregularity was a curable one under
Section 465 of the Code of Criminal Procedure. As regards the second
contention, the High Court held that the Addl. Sessions Judge hag nowhere cast
the burden of proof on the accused in dealing with the appeal and hence the
appellate judgment did not suffer from any perversity or illegality. The High
Court, however, sustained the third contention of the 1st respondent and set
aside the sentence of fine and the direction to the Ist respondent to deliver
possession of the flat to the company.
giving its acceptance to the third contention, the High Court felt influenced
by the two letters Exs. 3 & 4 written by Mr. Jain and felt that the letters
afforded basis for the Ist respondent to bona fide dispute the company's claim
for possession of the flat. The High Court was also of the view that since the Ist
respondent had filed a suit even before the complaint was filed, the Civil
Court was in seisin of the matter and therefore the Criminal Court "ought
to have stayed its hand and allowed the Civil Court to adjudicate upon the
issue." In support of its view, the High Court invoked the ratio in Damodar
Das Jain v. Krishna Charan Ckakraborti,  57 Com. Cases 115.
aggrieved company is now before us. Mr. Anil Divan, learned senior counsel
appearing for the company argued that the High Court, after having held t. hat
there were no reasons to interfere with the concurrent findings of the Courts
below, ought not to have gone back on its view and rendered a finding that a
bona fide dispute was involved in the proceedings and the dispute could only be
adjudicated upon by a civil court and not by a criminal court in summary
proceedings under Section 630 of the Companies Act. Mr. Anil Divan referred to
the acceptance of the findings of the first two Courts by the High Court in its
judgment in the following terms....
do not think that there is any scope for re-appreciating 756 or re-appraising
the evidence. Two Courts below have come to concurrent findings of fact, and I
see no reason for interfering with the conclusions arrived at by the Courts
below. " It was therefore urged by the counsel that once the concurrent
findings of the Courts below found acceptance with the High Court, there was no
justification for the High Court to set aside the judgments of the two Courts.
The learned counsel further submitted that Section 630 of the Companies Act has
been provided with an intent and purpose and its scope and ambit have been set
out by this Court in reported decisions, but the High Court has failed to
notice them and construed Section 630 in an unrealistic manner and this had led
to mis-carriage of justice, Mr. Divan also invited our attention to the leave
and licence agreement entered into by the company with the owner of the flat as
well as an affidavit and letter given by the first respondent at the time of
the agreement and submitted that in the face of these clinching documents,
there was absolutely no room for the first respondent to contend that he was
the licencee and not the company of the fiat in question. He also commented
upon the conduct of the Ist respondent in getting two letters Ex. Nos. 3 and 4
written by a junior employee of the company without the knowledge of the
Directors of the company and filing a suit on the basis of those letters and
resigning his post three days later and refusing to vacate the flat.
finally urged by Mr. Divan that the High Court went wrong in applying the ratio
in Damodar Das Jain (supra) because there was no bona fide dispute between the Ist
respondent and the company regarding the flat occupied by the Ist respondent.
learned counsel for the first respondent who had appeared for him before the
High Court also contend on the other hand that the High Court has acted rightly
in exercising its power under Section 482 Cr. P.C. and in setting aside the
judgments of the lower courts and the High Court's judgment does not suffer
from any error of law which needs correction by this Court. The arguments of
Mr. Jagtiani may briefly be summarised as under:
Proceedings under Section 630 of the Companies Act are in the nature of
criminal proceedings and consequently the burden of proof is upon the
complainant. Besides, the accused is entitled to the benefit of doubt on all
matters not proved beyond reasonable doubt.
any weakness in the accused's case set up by way of defence cannot be relied upon
to fill up the lacuna in the prosecution case.
letters Exs. 3 and 4 written by Mr. Jain on behalf of the company have not been
convincingly disproved by the company and as such a bona fide doubt exists as
to who is the actual licencee of the flat and the said dispute can be resolved
only by a Civil Court and not by a Criminal Court.
civil suit had already been filed by the first respondent and it was pending in
the Civil Court and as such the Criminal Court
should not have adjudicated upon the rights of the parties but should have
directed them to seek their remedies before the Civil Court.
explanation offered by Mr. Jain that he had written the letters under duress
and coercion has been falsified by his admissions in cross-examination and
hence the Criminal Court should have accepted the first respondent's plea that
a bona fide dispute existed between the parties regarding the licence rights
over the flat and refrained from adjudicating upon the rights of the parties in
the complaint filed under Section 630.
Das Jain's case sets out the correct ratio and the High Court was fully
justified in applying the said ratio to this case.
we deal with the contentions of the parties, we may refer to Section 630 of the
Companies Act and the decisions of this Court on the scope and ambit of the
630 reads as under:
630. Penalty for wrongful withholding of Property(1) If any officer or employee
of a company (a) wrongfully obtains possession of any property of a company; or
(b) having any such property in his possession, wrongfully withholds it or
knowingly applies it to purposes other than those expressed or directed in the
articles and authorised by the Act; he shall, on the complaint of the company or
any creditor or contributory thereof, be punishable with fine which may extend
to one thousand rupees.
The Court trying the offence may also order such 758 officer or employee to
deliver up or refund, within a time to be fixed by the Court, any such property
wrongfully obtained or wrongfully withheld or knowingly misapplied, or in
default, to suffer imprisonment for a term which may extend to two years."
There was a divergence of opinion between the Bombay High Court and the
Calcutta High Court regarding the interpretation of the words "any officer
or employee of a company", the Bombay High Court giving a broader
interpretation to the words and the Calcutta High Court giving a narrow
interpretation. The controversy was set at rest by this Court in Baldev Krishna
Sahi v. Shipping Corpn. of India Ltd.,  (IV) SCC 361 by holding that the
term "officer or employee" of a company applies not only to existing
officers or employees but also to past officers or employees if such, officer
or employee either (a) wrongfully obtains possession of any property, or (b)
having obtained possession of such property during his employment, wrongfully
withholds the same after the termination of his employment. It was pointed out
that wrongful obtainment of possession would attract Section 630(1)(a) and
wrongful withholding of possession of company's property would attract Section
630(1)(b) of the Act. It is therefore clear that the purpose of enacting
Section 630 is to provide speedy relief to a company when its property is
wrongfully obtained or wrongfully withheld by an employee or ex-employee.
later case Amritlal Chum v. Devo Prasad Dutta Roy,  2 SCC 269 which arose
directly from the decision of the Calcutta High Court in Amritlal Chum v. Devi Ranjan
Jha,  61 Company Cases 211 the view taken in Baldev Krishan Sahi (supra)
was affirmed and the High Court's judgment was reversed.
now to the question whether the licence for occupation of the flat was obtained
by the company or the first respondent, we may refer to three crucial
first one is the leave.and licence agreement dated 1.11. 1980. The deed
specifically states that the licencee is Messrs Jenson and Nicholson (India)
Ltd. having its registered office at Calcutta and Executive office at Bombay
and that the company shall have the flat "for the use and occupation as
residence by its bona fide employee/employees and/or his/their families"
and shall not be transferred to anyone else (vide clauses 11 & 12). The
agreement was entered into by the first respondent as the power of attorney
agent of the company and he has contemporaneously executed an affidavit on
1.11. 1980 wherein he has affirmed as follows:
"I say that for the purpose of securing a flat on leave and licence basis
for providing residence for the employees of the company, I have entered into
negotiations on behalf of the company, with Shri Mehdi Mandil the owner of flat
No. 84 on the 8th floor of the building known as 'Mehr Dad' at Cuffe Parade,
Bombay, to allow the company the use and occupation of the said flat under a
leave and licence to be executed between the said Mehdi Mandil and the said
company." (Emphasis supplied).
3 of the affidavit, the first respondent has given an assurance that the flat
"would be made use of for the purpose of residence only by the bona fide
employees of the company and/or their/families." In para 4, the first
respondent has affirmed "that neither the company nor any employee of the
company who may be in occupation of the flat would claim any rights/title or
interests or any rights of tenancy other than the right to use and occupy the
said flat purely as a licencee under and in accordance with the terms and
conditions of the leave and licence agreement." On 5.11. 1980, the Ist respondent,
acting for the company, has written a letter to the licenser Mr. Mehdi Mandil
stating inter alia as under:
flat being given to the company, it would be occupied by only the bona fide
official employee of the company." "Yours faithfully, Jenson &
Nicholson (India) Ltd.
Kalra Divisional Sales Manager, Bombay." These documents clinch the issue and prove beyond a shadow of
doubt that the flat was taken on leave and licence basis by the company only
for providing accommodation to its employee or employees during their term of
employment in the company. It was purely on that basis the first respondent who
was the Divisional Sales Manager was allowed to occupy the flat and he was
allowed to occupy the flat till he resigned his post on 26.3. 1984. It is
pertinent to mention here that it was the company which had given the deposit
of Rs.3,50,000 to the licenser and had been paying the licence fees, advance
and monthly, all through.
this incontrovertible position, the first respon760 dent developed ideas to
cling to his possession of the flat even after ceasing to be an employee of the
company. Consequently, he contrived to obtain two letters dated 25.1.1984 and
1.2. 1984 from Mr. Jain who was only working as Office Manager at Bombay. In
the first letter, Mr. Jain has formally written to say (though he and the Ist
respondent were working in the same office) that the company has received a
letter from the Municipal Corporation regarding the rateable value of the flat
and that the first respondent may deal with the matter. Instead of stopping
with that, Mr. Jain has gone on to say as follows:
are forwarding the said letter to you, to deal with the same as you are the
tenant of the flat and you are in possession of the same. The flat was taken by
you from the landlord, but the landlord had insisted to have the agreement in
the name of the company merely.
company will not be liable if the rateable value of the flat is increased and
if there is any consequential increase in the property taxes. All the matters
will be between you and the landlord. Please therefore deal with the letter as
you deem fit." (Emphasis supplied).
faithfully, Jenson & Nicholson (India) Ltd.
. JAIN) Office Manager, Bombay.
30.1. 1984, the appellant has acknowledged the letter and agreed to deal with
the corporation authorities and has in addition stated that he will also take
steps for fixation of standard, rent by the Court as the landlord was charging
exorbitant rent. Digressing for a moment, it has to be noticed that the Ist
respondent had come to realise the rent to be exorbitant only after 3 years and
2 months and just before he wanted to claim tenancy rights for himself.
Reverting back to the correspondence, Mr. Jain has sent a reply on 1.2.1984 to
state that the company will have no objection to legal proceedings being taken
for fixation of standard rent of your flat at 84, Mehr Dad, Cuffe Parade,
Bombay but however he (1st respondent) alone will have to bear the expenses
including the court fees and advocate's fees and the company will not be liable
to re-imbuse him. It is on the footing of these two 761 letters the first
respondent sought to build up a case that he was the actual licensee of the
flat and not the company.
considering the explanation given by Mr. Jain as to his writing the letters, it
will be worthwhile to notice certain factors. In the first place, Mr. Jain was
only a junior employee of the company viz. Office Manager, Bombay and could not therefore have
directed the Ist respondent to attend to the matter of furnishing information
to the corporation authorities about the rateable value of the flat.
Mr. Jain and the first respondent were both working in the same office and as
such it is inconceivable that Mr. Jain would have carried on a correspondence
with the 1st respondent instead of merely placing the alleged letter of the
corporation before the first respondent for suitable action by him. Thirdly,
Mr. Jain joined the services of the company only in July 1983 i.e. long after
the company had taken the flat on licence and as such he could not have known
what were the terms of the leave and licence agreement and who was the actual
licensee of the flat. Fourthly, even if Mr. Jain had purported. to act on
behalf of the company, he would have sent copies of the letters to the Head
Office at Calcutta but he had not done any such thing
and on the other hand he had suppressed information from the Head Office about
the correspondence. The Ist respondent too had not brought the matter to the
notice of the Head Office at Calcutta. The Ist
respondent resigned his post on 26.3.84 and in order to forestall the company
from seeking his eviction, he had filed a suit on 23.3.84 to seek the reliefs
of declaration and injunction. All these factors lead to the unmistakable
conclusion that the first respondent had somehow prevailed upon Mr. Jain to
give the letters Exs. 3 & 4 with the ulterior motive of filing a suit and
then tendering his resignation.
coming to the explanation offered by Mr. Jain for writing the two letters, he
has sworn to an affidavit that he was "pressurised and threatened" by
the 1st respondent to sign the letters without knowing the implications. He has
also given evidence to the same effect in the trial of the case before the
Additional Chief Metropolitan Magistrate.
strenuously contended that Mr. Jain's statement that he gave the letters under
coercion has been disproved by the answers elicited from Mr. Jain in his
cross-examination viz. that the 1st respondent did not actually threaten him
but he construed the commanding manner in which he made the demand as
containing a threat. Mr. Jagtiani's argument was that once Mr. Jain's
explanation for giving the letters stood falsified, then the letters must be
treated as genuine documents binding on the company and affording material to
the 1st 762 respondent to contend that he was the real licensee of the flat. We
are unable to find any merit in this contention.
assuming for arguments sake that Mr. Jain had not written the letters under
threat, the Ist respondent's case will not stand advanced in any manner. A
junior employee of the company cannot relinquish the rights of the company in favour
of the 1st respondent especially when the Ist respondent himself had
categorically stated in the leave and licence agreement as well as in his
affidavit and letter that the company was the licencee of the flat and the
employees are not entitled to claim any tenancy rights for themselves.
the weakness in his case, the Ist respondent has made an attempt to
authenticate the letters Exs. 3 and 4 by contending that Mr. Roy, Director of
the Company had instructed Mr. Jain from Calcutta to write the letters and hence the letters were fully binding upon the
company. The story invented by the Ist respondent was rightly disbelieved by
the Trial Court and the Appellate Court because it is inconceivable that Mr.
Roy would have asked a junior officer like Mr. Jain to write the letters instead
of asking some one from the Head Office itself to write the letters. No
suggestion was put to Mr. Jain in the witness box that he wrote the letters
under the instructions of Mr.
Roy. There is also no mention in the
letters that they were being written as per the instructions received from the
Head Office. Another strange feature is that a copy of the letters has not been
sent to the Head Office. Such would not have been the case if the letters had
really been written by Mr. Jain under directions from the Head Office.
sought to discredit the affidavit and the evidence of Mr. Jain on the ground
that Mr. Jain had given his affidavit after consulting the company's lawyer and
secondly he had not been punished by the company for his misconduct. The
arguments of the counsel in this behalf have no merit in them because Mr. Jain
was duty bound to explain to the company the circumstances in which he had
arrogated powers to himself and written the letters Exs. 3 and 4 to the Ist
respondent. Naturally therefore he would have sought the guidance of the
company's counsel as to how the affidavit is to be formally worded. As regards
the company not awarding any punishment to Mr. Jain, it was open to the company
to pardon him for the folly of his action when it came to know that he had been
unwittingly made use of by the Ist respondent to write the letters in question.
these factors have unfortunately escaped the notice of the 763 High Court and
the omission has led the High Court to accept the first respondent's contention
that there was a bona fide dispute between him and the company as to who was
the actual licencee of the flat. We have already referred to the relevant
portions of the leave and licence agreement and the affidavit and letter of the
Ist respondent wherein he has categorically accepted that the company was the licencee
of the flat. Secondly, the evidence projected by the Ist respondent to lay
claim to licence rights over the flat is his own creation without the knowledge
of the company. The two letters in question had been obtained from a junior
employee who had joined the company long after the flat was taken on rent and
who knew nothing of the agreement between the company and the owner of the
flat. The author of the letters has himself confessed that he had signed the
letters at the behest of the Ist respondent without knowing the implications of
his act. Leaving aside these factors, even if we are to take that Mr. Jain had
of his own accord written the letters, can it ever be said that the letters
afford scope for the Ist respondent to contend that he is bona fide entitled to
dispute the company's claim to possession of the flat. The sequence of events
also go to show that the Ist respondent had formulated a plan for clinging to
his possession of the flat even after resigning his post and in accordance with
that plan he had obtained the letters Exs. 3 and 4 and then filed a suit in
order to forestall the company from proceeding against him under Section 630 of
the Companies Act. Merely because the Ist respondent had schemingly filed a
suit before tendering his resignation, it can never be said that the Civil Court was in seisin of a bona fide
dispute between the paries and as such the Criminal Court should have stayed
its hands when the company filed a complaint under Sec. 630. If a view is
mechanically taken that whenever a suit has been filed before a complaint is
laid under Section 630, the Criminal Court should not proceed with the
complaint, it would not only lead to miscarriage of justice but also render
ineffective the salutory provisions of Section 630.
much for the bona fides of the alleged dispute projected by the Ist respondent
regarding the company's claim to possession of the flat. Coming now to the
question of law, the High Court has invoked the ratio in Damodar Das Jain,
(supra). The facts therein were very different and it was with reference to
those facts, the High Court held that a bona fide dispute existed between the
may be seen from the question posed for consideration by the High Court, viz.
"whether on the facts and circumstances of the case, the Magistrate could
himself, under Section 630, determine the dispute as to the title to the
property." On the evidence before it, the High Court held 764 and rightly
so that there was a genuine dispute between the parties and the said dispute
required adjudication by a Civil Court in
the suit filed by the ex-employee. While rendering its judgment, the High Court
had construed Section 630 properly and observed that "the magistrate's
jurisdiction thereunder (under Section 630) would extend only to those cases
where there was no dispute, or in any event no bona fide dispute, that the
property involved was the property of the company." (emphasis supplied).
pointed out that the decision of the High Court in Damodardas Jain (supra) was
affirmed by this Court in Damodardos v. Krishna Charan Chakraborti & Anr.,
 4 Judgment Today page 7 14. He fails to notice that the acceptance of
the High Court's view was with reference to the facts of the case. This may be
seen from the following observation in the judgment of this Court. "The
High Court felt that the disputes raised by the respOndent herein were bona
fide disputes. Before us it has not been disputed that this view of the High
Court was correct as far as the question whether the Company could be held to
be a tenant of the flat is concerned." Therefore what has to be seen in a
complaint under Section 630 is whether there is "no dispute or no bona
fide dispute" regarding a property claimed by the company between the
company and its employee or ex-employee. It is needless to say that every
dispute would not become a bona fide dispute merely because the company's claim
to possession is refuted by an employee or ex-employee of the company. As to
when a dispute would amount to a bona fide dispute would depend upOn the facts
of each case. In the present case the High Court has realised this position and
observed that "while considering whether the plea of tenancy is a bona
fide plea, it is always necessary to examine and consider the transaction on
the basis of which the plea is based" (vide para 39). While stating the
position correctly, the High Court went wrong in holding that the serf-serving
documents produced by the 1st respondent gave a touch of bona fides to his defence.
The High Court was therefore not fight in thinking that the ratio in Damodar Das
Jain (supra) was attracted to the case in as much as the defence put forward by
the Ist respOndent was patently an incredible story.
contention of the 1st respOndent to thwart the proceedings under Section 630,
which has been repelled by all the Courts including the High Court, is
regarding the competence of PW-1 Mr. Atul Mathur, the present Divisional Sales
Manager of the company, to 765 file the complaint on behalf of the company.
Belatedly, the Ist respondent has filed a memorandum of cross-objections
against the finding of the High Court on this question. The appellant's counsel
objected to the memorandum of cross objections being entertained as it has been
filed belatedly and furthermore, the appellant has not been given notice or
furnished copies of the cross-objections. Leaving aside the technical pleas, we
find the cross-objections to be worthless even on merit. The Ist respondent
would say that the power of attorney in favour of Mr. Atul Mathur empowers him
to act on behalf of the company only in civil suits, sales tax proceedings, and
excise matters and does not empower him to file criminal complaints on behalf
of the company. The Ist respondent's contentions suffer from a misconstruction
of the terms of the power of attorney executed by the company. The power of
attorney, read as a whole, is seen to confer general powers on Mr. Atul Mathur
and not merely special powers. It has been engrossed on stamp papers of the
value of Rs.50 and it is indicative of the nature of the deed. Though specific
reference is made in the power of attorney only to the filing of suits and to
matters relating to sales-tax and Central Excise, there is a general clause
which reads as follows:
THE COMPANY HEREBY agrees that all acts, deeds and things lawfully done by the
Attorney shall be construed as acts, deeds and things done by it and the
company undertakes to ratify & confirm all and whatsoever that its said
Attorney shall do or cause to be done by virtue of Powers hereby given."
The power of attorney has been executed just before the complaint was filed and
it is stated in the complaint that Mr. Atul Mathur was filing the complaint on
behalf of the company and he was duly authorise to do so. The High Court was
therefore, not right in construing the power of attorney as conferring only
special powers and not general powers on Mr. Atul Mathur. Be that as it may,
the High Court has held, and very rightly, that as Mr. Atul Mathur was the
Divisional Sales Manager of the company at Bombay, he was certainly competent
to file the complaint on behalf of the company as per instructions given to him
from the Head Officer of the Company We do not therefore find any substance in
the contention of the Ist respondent that the complaint suffered from a
material irregularity not curable under Section 465 Cr.P.C. Incidentally, we
may observe that in spite of contending that the complaint suffered from an
irregularity, the Ist respondent has neither pleaded nor proved that a failure
of justice has been occasioned on account of the alleged irregularity.
Learned counsel for the Ist respondent relied upon Ballavdas Agarwala v. Shri
J.C. Chakravarty,  2 SCR 739 in support of his contention that the
company's complaint suffered from an irregularity not curable under Section 465
Cr.P.C. In the view we have taken of the matter viz. that Mr. Atul Mathur had
the requisite authority to file the complaint on behalf of the company, the
question does not survive for consideration. The cross-objections must
therefore fails even if entertained.
the aforesaid reasons, the judgment of the High Court is not sustainable. We
therefore, allow the appeal, set aside the judgment of the High Court and
restore the judgments of the Additional Chief Metropolitan Magistrate and the
Additional Sessions Judge. However, the first respondent is given time till
30.9.89 to deliver possession of the flat to the company failing which the
sentence of imprisonment awarded to him would be enforced.