LexATUL MATHUR, DIVISIONAL SALES MANAGER OF JENSON AND NICHOLSON (INDIA) LTD. versus ATUL KALRA AND ANR.
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ATUL MATHUR, DIVISIONAL SALES MANAGER OF
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JENSON AND NICHOLSON (INDIA) LTD.
V.
ATUL KALRA AND ANR.
AUGUST 8, 1989
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{S. NATARAJAN AND S. RATNAVEL PANDIAN, JJ.]
Companies Act 1956-Section 630---0fficer or employee of
Company-Refusing to vacate flat after resignation from service-
Prosecution on complaint-Whether maintainable.
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The appellant-Company took a Oat No. 84, Mehr-Dad, Cuffe
Parade, Bombay, from its owner Mehdi Mandil on leave and licence
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basis for the residence of its Officers' /Employees'. The first Respon-
dent, Divisional Manager of the Company at Bombay, acted as power of
attorney of the Company and executed the agreement with the land-lord
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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 compensa-
lion 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.
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On 1.11.80, the appellant Company allowed the first Respondent
to occupy the Oat 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 Oat for a declara-
lion that he was the actual licencee of the Oat and for a permanent
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injunction to restrain the defendants from interfering with his posses-
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sion of the Oat. He based his claim as a licencee on the basis of two
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letters dated 25 .1.84 and 1.2 .84 written by the Manager of the Com-
pany, one Mr. Jain. Three days after filing the said suit, first Respon-
dent resigned and his letter of resignation was accepted by the company
on 27.3.84.
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Since the fU"st Respondent, ex-employee of the company did not
vacate the Oat, the company flied a complaint against him under Sec-
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lion 630 of the Companies Act before the Addi. Chief Metropolitan
Magistrate, Bombay. The Complaint was filed by Mr. Aloi Mathur, as
attorney of the company, who by then had taken over the place vacated
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by the first respondent.
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ATUL MATHUR v, ATUL KALRA
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The trial Magistrate found the first respondent guilty under Sec-
tion 630 of the Company's Act and sentenced him to pay a fine of
Rs. l,000 and directed to deliver vacant possession of the Oat to the
company. In lieu of payment of rme aforesaid, r .... t respondent was
directed to undergo simple imprisonment for 3 months.
The first respondent preferred an appeal to the Session Court
against the order of the Trial Magistrate. By his order dated 22.10.86,
the Addi. Sessions Judge, Greater Bombay dismissed the appeal. Thus
both the trial court as also the first appellate Court concurrently found
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'\_~hat the company was the real licencee.
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Thereupon the first Respondent filed a Petition under Article 227
of the Constitution before the High Court, which later, he was permit-
ted to convert as one under Sec. 482 of the code of criminal procedure.
The first Respondent contended before the High Court:
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(i) That the complaint was not properly med inasmuch as the
complainant was not duly authorised by Jhe company which irregu-
larity vitiated the proceedings; (ii) That.the Addi. Chief Judi. Magis-
·trate ·had ·no jurisdiction to adjudicate such a complicated matter in
summary proceedings under Section 630 of the Companies Act, and
(iii) ·The Addi. Sessions Judge had wrongly cast the burden of proof.on
the accused.
The High Court rejected the contentions (I) and (3) and came to
the conclusion that the letters written hy Mr. Jain afforded basis for the
first respondent to bona fide dispute the company's claim for possession
of the Oat. 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.
Damodar Das Jain v. Krishna Charan Chakraborti & Anr.,
[1985] 57 Com. Cases.
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Aggrieved by the High Court '.s order allowing the first Respon-
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dent's Writ Petition, the company bas filed this appeal by special leave
and the question that falls for detemination hy the Court is whether the
High Court was right in reversing the Judgments of the Courts below in
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