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B.R. Herman and Mohatta India Ltd. Vs. Ashok Rai and anr. - Court Judgment

LegalCrystal Citation
SubjectCompany;Criminal
CourtDelhi High Court
Decided On
Case NumberCriminal Appeal No. 155 of 1982
Judge
Reported in[1984]55CompCas61(Delhi); 1983(2)Crimes310; 24(1983)DLT15; 1983(5)DRJ71; (1984)ILLJ189Del; 1983RLR487
ActsCompanies Act, 1956 - Sections 630; Code of Criminal Procedure (CrPC) , 1973 - Sections 473
AppellantB.R. Herman and Mohatta India Ltd.
RespondentAshok Rai and anr.
Advocates: P.P. Grover and; R.N. Mittal, Advs
Excerpt:
.....offence under section 472 of the code - further, the complaint filed after the expiry of a period limitation of three years was barred by timeb) the case discussed the necessity of written application for extension of period of limitation under section 473 of the criminal procedure code, 1973 - it was held that the court had the discretion to grant extension of period of limitation, in case it was satisfied on the facts and the circumstances that the delay was explained properly and the extension of the limitation was necessary in the interest of justice - - the complainant further stated f that the respondent had been reputedly assuring the complainant that he i would vacate the said premises but he had failed to do the same. the complainant has in the complaint clearly..........procedure which provides : '472.continuing offence. in the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues.'(9) the essential ingredients for an offence under section 630 of the companies act are (a) that an officer or employee of the company wrongfully obtains possession of any property of a company or (b) he having in his possession any property of the company wrongfully withholds it or knowingly applies it to a purpose other than that expressed or directed in the articles and authorised by the act.(10) the facts constituting the complaint are these :- (a)that the company on the employment of the respondent had permitted him the use of a free and furnished accommodation at 22, ferozesbah.....
Judgment:

Aggarwal, J.

(1) This appeal by M/s. B.R. Herman and Mohatta India Ltd. (hereinafter called 'the company') is against the order of Shri Bhola Dutt, Metropolitan Magistrate, by which he dismissed the complaint under section 630 of the Companies Act, 1956 by the company against Ashok Rai.

(2) On 10th December 1980 the Company filed a complaint against Ashok Rai under Section 630 of the Companies Act alleging that the company on 15th November 1971 had employed Ashok Rai in its project of manufacturing scooters and in that capacity the respondent was permitted to use and occupy a portion of the premises at 22 Ferozeshah Road, that the employment of Ashok Rai was terminated by the company on or about 11th October 1976 and that after the termination of the services the Manager of the Delhi Office of the complainant company on several occasions requested Ashok Rai to vacate the premises but he had been assuring to do so but has not vacated the premises till date and that instead of vacating the premises the respondent had started using part of the premises for commercial purpose. The company alleged that the respondent was wrongfully withholding the property and thereby had committed an offence

(3) The complainant in support of its case examined Shri Prithvi Raj. Shri Prithvi Raj gave evidence that at the time of the employment the respondent was given free furnished accommodation at 22. Ferozeshah Road and the service of the respondent were terminated on 11th October 1976 and that after the termination of the service inspire of repeated requests and reminders the respondent had not vacated the said premises. The complainant further stated f that the respondent had been reputedly assuring the complainant that he I would vacate the said premises but he had failed to do the same.

(4) The respondent filed an application raising a few preliminary objections and one of them being that the complaint is barred by time.

(5) The Magistrate after hearing the parties dismissed the complaint holding (i) that the complaint does not mention the fact that the accused had wrongly obtained the possession of the property of the company nor is there ( allegation that the accused was wrongfully withholding any property of the ' company, and (ii) that the limitation commenced with effect from 11th October 1976, that is. the date on which the services were terminated and the complaint having been filed in the court on the 10th December 1980 is barred by time.

(6) We find that the first ground on which the complaint has been dismissed is factually not correct. The complainant has in the complaint clearly alleged that on the employment of the respondent the respondent was given the right to use and occupy premises at 22, Ferozeshah Road and ' that after the termination of the service on 11th October 1976, the respondent inspire of repeated requests had not vacated the said premises and he was wrongfully withholding the property. The said allegations if proved would clearly bring the case within the ambit of section 630 of the Companies Act.

(7) Shri Mittal. learned counsel for the respondent made no attempt to support the impugned judgment on the first ground.

(8) Shri Grover, learned counsel for the company, strenuously contended that the offence under section 630 of the Companies Act is a continuing wrong and, thereforee, each day of the wrongful withholding of the property would give fresh start of limitation. The counsel contended that the offence under section 630 of the Companies Act would fall under section 472 of the Code of Criminal Procedure which provides :

'472.Continuing offence. In the case of a continuing offence, a fresh period of limitation shall begin to run at every moment of the time during which the offence continues.'

(9) The essential ingredients for an offence under section 630 of the Companies Act are (a) that an officer or employee of the Company wrongfully obtains possession of any property of a Company or (b) he having in his possession any property of the company wrongfully withholds it or knowingly applies it to a purpose other than that expressed or directed in the articles and authorised by the Act.

(10) The facts constituting the complaint are these :-

(A)that the company on the employment of the respondent had permitted him the use of a free and furnished accommodation at 22, Ferozesbah Road; (b) the Company had terminated the service of the respondent on 11th October, 1976; and (c) inspire of repeated requests by the Company to vacate the said premises the respondent continues to hold the property.

(11) The expression 'wrongfully' used in clause (b) of section 630(1) would mean that a person continues to remain in procession or hold the property otherwise than in due course of law. There can be no doubt that after the termination of the service on 11th October 1976 (assuming that the respondent was given possession of the property 22, Ferozeshah Road as a condition of his employment) the possession of the respondent had become wrongful unless it is shown or proved that he continued in possession under some legal sanction.

(12) The expression 'continuing offence' has been defined in the following terms by a Division Bench of the Bombay High Court in State v Bhiwandiwallah. : (1956)IILLJ153Bom :

'The expression 'continuing offence' though not a very happy expression has acquired a well recognised meaning in criminal law. If an act committed by an accused person constitutes an offence and if that act continues from day to day, then. from day to day a fresh offence is committed by the accused so long as the act continues. Normally and in the ordinary course an offence is committed only once. But there may be offences which can be committed from day to day arid it is offence falling in this later category that are described as continuing offences, In every case of continuing offence it may be possible to describe the default as amounting to an omission or to a positive act on the part of the defaulter.'

(13) Reverting to the case in hand, if the premises in dispute was allotted to the respondent as a part of the conditions of employment with an obligation to vacate the same on the termination of the employment, the possession would become wrongful on the termination of the service. We are unable to appreciate how -in act (in not delivering back the possession once committed and which amounted to an offence under section 630(1)(b) of the Companies Act could be repeated again and again.

(14) This argument can be tested from another angle. Suppose the Company had demanded possession of the property and the respondent had refused to hand back the possession and set up some kind of his own title, could in that case the company wait for indefinite period to recover the possession. In our view, the answer must be in the negative. The adverse possession would begin to run the moment the offence under section 630(1)(b) was complete, and in that situation if the company does not bring an action within the period prescribed by law, the company may lose not only the criminal but the civil remedy, as well.

(15) For the aforesaid reasons we hold that the offence under section 630(1)(b) of the Companies Act is complete as soon as committed and it is not a continuing offence.

(16) The next question that falls for determination is as to on which date the limitation commenced. The company in para 3 of the complaint has alleged that the services of the respondent were terminated on 11th October 1976 but the respondent requested that he may be given some time to vacate the premises and in the next paragraph the Company has alleged that thereafter the Manager of the Delhi Office of the complainant on several occasions requested Ashok Rai to vacate the premises but the respondent kept on assuring that he will vacate the premises but he has not done so till date. There is no allegation in the complaint that after 11th October 1976 the company had at the request of the respondent or otherwise permitted the respondent to further stay on for any particular period. The only allegation is that the respondent had been assuring to vacate the premises but he had not done so. As already observed, the expression 'wrongful' would mean withholding without legal sanction. There is no allegation that after 11th October 1976, the company had permitted the respondent to stay on for any period of time in which case .the stay, during the permitted period, could be considered with authority, otherwise the period of limitation would commence the day the withholding was wrongful. This date, according to the complaint, was 11th October 1976 or soon thereafter.

(17) Thus we find that the limitation had commenced to run on or about 11th October 1976. The complaint was filed in the court on 10th December 1980. Sub-section (2) of section 630 provides for an imprisonment which may extend to two years. Section 468(l)(c) of the Code of Criminal Procedure provides that where the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years, the limitation shall be three years. thereforee, the period of limitation for taking cognizance of an offence under section 630 of the Companies Act would be three years. The complaint was filed after more than four years of the date of the offence and, thereforee, is clearly barred by time.

(18) Shri Grover contended that it is a fit case where the court should extend the period of limitation. Section 473 which gives the power for extending the priod of limitation reads as under :

'473.Extension of period of limitation in certain cases.-Notwithstanding anything contained in the foregoing provisions of this Chapter, any Court may take congnizance of an offence after the expiry of the period of limitation, if it is satisfied on the facts and in the circumstances of the case that the delay has been properly explained or that it is necessary so to do in the interests of justice.'

(19) The learned trial Magistrate did not think it to be a fit case for condoning the delay on the ground that the complaint had not filed any application requesting for condensation of delay. We may mention that the trial Magistrate thinking that the offence is punishable only with a fine of Rs. 1000.00 proceeded to hold that the limitation is six months and, thereforee the complaint could be filed on or before 11th October 1977, We are of the view that the learned Metropolitan Magistrate is not correct in holding that the period of limitation for a complaint under section 630 of the Companies Act is six months. It is true that under sub-clause (1) the penalty provided for wrongful withholding of the property is fine which may extend to one thousand rupees. The learned Metropolitan Magistrate has overlooked the provisions of sub-section (2) which reads as under :- 20. The Court trying the offence may also order such officer or employee to deliver up refund or 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.'

(20) We have earlier observed that the case would fall under sub-clause (c) of section 468. Sub-clause (c) reads as under :

'(C)three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. (3) For the purposes of this section, the period of limitation, in relation to offences which may be tried together, shall be determined with reference to the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment.'

(21) It is clear from a reading of the above provisions that the court under sub-section (2) could make an order directing the respondent to deliver the possession oF the property or in default to undergo imprisonment for a term extending up to two years. In this view the limitation would be three years and not six months as held by the Magistrate.

(22) The main reason given by the Magistrate for not extending the period of limitation is that the company had filed no application for condoning the delay. We find from a reading of section 473 of the Code of Criminal Procedure that there is no legal requirement for making an application. Section 473 gives a discretion to the court that in case it is satisfied, on the facts and in the circumstances of the case, that the delay has been properly explained or that it is necessary so to do in the interests of justice, it may take cognizance of an offence after the expiry of the period of limitation. The only Explanationn give in the complaint for the delay is that the respondent after the termination of the employment had requested for time of vacate the premises and thereafter he had been assuring to vacate the premises but he did not do so. There is no counter verson. The respondent has not alleged the capacity in which he continued to occupy the premises after the termination of the service in 1976. It appears that the petitioner was allowed to use a portion of 22, Ferozeshah road which is in the tenancy of the company as a condition of employment. It is stated in the complaint that inspire of repeated requests, the respondent has not vacated the premises. Looking to all the circustances, we are of the view that it is a fit case where the learned Metropolitan Magistrate should have extended the period of limitation.

(23) Before leaving the case we may observe that the company had filed an application under section 378(4) of the Code of Criminal Procedure for special leave to appeal against the impugned order dated 7th May 1982. There was an objection by the office that no appeal is competent against an order of discharge. The admitting Bench was prima facie of the view that in summons case an order of discharge tantamounts to an order of acquittal and consequently granted leave to appeal. The Bench had left it open to the respondent to object to the competency of the appeal, but the competency of the appeal has not been challenged before us.

(24) For the reasons recorded we allow the appeal and send the case back to the learned trial Magistrate to proceed further in accordance with law. The parties shall appear before the Court on 3rd May 1983.

(25) Nothing here in before said shall be taken to be an expression of view on the merits of the complaint.


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