R.R. Prasad, J.@mdashThrough this writ application power of the superintendence of this Court has been invoked for directing the court of Special Judge, Economic Offences at Jamshedpur for disposing of the complaint cases instituted u/s 630 of the Companies Act within the time framed by this Court so that right of speedy justice be not denied to the petitioner.
2. According to learned Counsel appearing for the petitioner, necessity of filing this writ application has arisen as the cases instituted u/s 630 of the Companies Act are rarely being disposed of expeditiously by the Court specially empowered to try the economic offences, though those cases need to be tried summarily as envisaged u/s 260 of the Code of Criminal Procedure.
3. In this regard it was further submitted that if the Court vested with the power to try the offences under the Companies Act adopt in true sense the procedure laid down u/s 260 of the Code of Criminal Procedure and also deals with the matter in the spirit of the provision as contained in Section 630 of the Companies Act itself, the cases can certainly be disposed of expeditiously as the court would be saving much of time by avoiding recording evidence elaborately and thereby it would expedite disposal of the cases.
4. It was further pointed out that if the court would be slightly sensitive in rendering speedy justice orders passed u/s 630 of the Companies Act can be executed immediately after the orders attain its finality, i.e., after disposal of the appeal or revision but the situation as has been prevailing is that it takes not less than 12-13 years after filing of the complaint u/s 630 of the Act in getting the orders executed.
5. Learned Counsel while drawing attention of the provision as contained in Sub-section (1) pf Section 630 of the Companies Act submits that if the accused ceases to be in the employment of the company either because of the superannuation, resignation, termination or otherwise including death, he can easily be directed at the time of explanation of accusation to vacate the quarters within the time as stipulated by the Court and if the accused complies with the order of the Court by vacating the quarters by the time fixed by the Court, he would be liable to pay fine only imposed by the court which may extend to Rs. 10,000/- but at the same time if the accused fails to comply with the order, the court may proceed under Sub-section 4(2) of Section 630 of the Companies Act and thereby the court may impose substantial punishment but this procedure is rarely being adopted by the Court, rather the court passes the order for vacating the quarters after the conclusion of the trial and due to this reason, the petitioner does not get justice in time and, therefore, necessary direction in consonance of the provision as contained in Section 630 of the Companies Act be given for its adoption so that cases be disposed of by a the court expeditiously by adopting summary procedure in true sense.
6. Heard learned Counsel appearing for the State.
7. It appears that anxiety of the petitioner is to get speedy justice as cases instituted u/s 630 of the Companies Act are being not dealt with in accordance with the spirit of the provision as contained in Section 630 of the Companies Act nor the same are being tried summarily in true sense.
8. The object of the Companies Act, inter alia, is to regulate the affairs of the companies including the control of the management and protection of the property of the company. The object of Section 630 of the Act has, thus, a direct nexus with the object of the Act.
9. Section 630 of the Act provides speedy relief to the company where its property is wrongfully obtained or wrongfully withheld by an ''employee or an officer'' or a ''past employee or an officer'' or legal heirs and representative of the deceased employee so far as occupation and possession of the property belonging to the company is concerned. The failure to deliver property back to the employer on the termination, resignation, superannuation or death of an employee, would render the ''holding'' of that property wrongful and actionable u/s 630 of the Act.
10. Even though Section 630 of the Act falls in Part XIII of the Companies Act and provides for penal consequences for wrongful withholding of the property of the company, the provision strictly speaking are not penal in the sense as understood under the penal law. The provisions are quasi criminal. They have been enacted with the main object of providing speedy relief to a company when its property is wrongfully obtained or wrongfully withheld by an employee or officer or an ex-employee or officer or anyone claiming under them.
11. The scope and parameter of the provision as contained in Section 630 of the Companies Act has been highlighted with by the Hon''ble Supreme Court in a case of
The beneficent provision contained in Section 630, no doubt penal, has been purposely enacted by the legislature with the object of providing a summary procedure for retrieving the property of the company (a) where an officer or employee of a company wrongfully obtains possession of property of the company, or (b) where having been placed in possession of any such property during the course of his employment, wrongfully withholds possession of it after the termination of his employment. It is the duty of the Court to place a broad and liberal construction on the provision in furtherance of the object and purpose of the legislation which would suppress the mischief and advance the remedy.
Section 630 of the Act which makes the wrongful withholding of any property of a company by an officer or employee of the company a penal offence, is typical of the economy of language which is characteristic of the draughtsman of the Act. The Section is in two parts. Sub-section (1) by Clauses (a) and (b) creates two distinct and separate offences. First of these is the one contemplated by Clause (a) namely, where an officer or employee of a company wrongfully obtains possession of any property of the company during the course of his employment, to which he is not entitled. Normally, it only the present officer and employees who, can secure possession of any property of a company. It is also possible for such an officer or employee after termination of his employment to wrongfully take away possession of any such property. This is the function of Clause (a) and although it primarily refers to the existing officers and employees, it may also take in past officers and employees. In contract, Clause (b) contemplates a case where an officer or employee of a company having any property of a company in his possession wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorized by the Act. It may well be that an officer or employee may have lawfully obtained possession of any such property during the course of his employment but wrongfully withholds it after the termination of his employment. That appears to be one of the functions of Clause (b). It would be noticed that Clause (b) also makes it an offence if any officer or employee of a company having any property of the company in his possession knowingly applies it to purposes other than those expressed or directed in the articles are authorized by the Act. That would primarily apply to the present officers and employees and may also include past officers and employees. There is therefore no warrant to give a restrictive meaning to the term officer or employee appearing in Sub-section (1) of Section 630 of the Act. It is quite evident that Clauses (a) and (b) are separated by the word ''or'' and therefore are clearly disjunctive (emphasis supplied).
12. The Hon''ble Supreme Court having come to the conclusion about the categories of the employees, who could be brought within the embrace of the provision of Section 630 has gone further to spell about the true scope of Sub-section (1) and Sub-section (2) of Section 630 of the Companies Act which reads as follows:
Under Sub-section (1) of Section 630, for the wrongful obtaining of the possession of the property of the company or wrongfully withholding it or knowingly applying it to a purpose other than that authorized by the company, the employee or the officer concerned is ''punishable with fine which may extend to one thousand rupees''. The ''fine'' under this Sub-section is to be understood in the nature of ''compensation'' for wrongful withholding of the property of the company. Under Sub-section (2) what is made punishable is the disobedience of the order of the Court, directing the person, continuing in occupation, after the right of the employee or the officer to occupation has extinguished, to deliver up or refund within a time to be fixed by the Court the property of the company obtained or wrongfully withheld or knowingly misapplied. Thus, it is in the event of the disobedience of the order of the Court, that imprisonment for a term which may extend to two years has been prescribed. The provision makes the defaulter, whether an employee or a past employee or the legal heir of the employee, who disobeys the order of the Court to hand back the property to the company within the prescribed time liable for punishment.
13. Thus, what emerges from the proposition as laid down by the Hon''ble Supreme Court is that as soon as an employee is found by the court holding property of the company wrongfully, the court can impose fine which may extend to Rs. 10,000/- and at the same time the court may also pass order directing the officer/employee to hand over the possession or refund the property, as the case may be, within the time fixed by the Court. Pursuant to that order, if an employee/officer complies with the said order, he will be liable to pay fine only imposed by the court but if the employee/officer fails to comply with the order, employee/officer would be making him liable to be imprisoned.
14. In this way one may easily find that the Hon''ble Court while dealing with the implications of Sub-section (1) and Sub-section (2) of Section 630 of the Act has given sufficient indication about the manner in which the court is supposed to act while dealing with the matter relating to offence u/s 630 of the Act and that is to be followed mandatorily by the court.
15. So far procedure for dealing with the matter u/s 630 of the Act is concerned, it needs not to be reminded that the prosecution u/s 630 of the Act is summary triable which is to be tried under the provision as contained in Chapter XXI of the Code of Criminal Procedure.
16. Going back to the provision of Section 630 of the Act, one would get dear indication of the intention of the legislature that the matter under the said provision needs to be adjudicated expeditiously and, therefore, the court is required to follow the provisions of the Code in its letter and spirit while dealing with trial of summary cases.
17. However one of the suggestions as pushed through on behalf of the petitioner is that as soon the company proves that employee/officer is in occupation of the property of the company wrongfully, the court immediately at the time of accusation should ask that person/employee to vacate the quarters. But that suggestion if accepted would not be in consonance with the provision dealing with summary trial as contained in Chapter XXI of the Code of Criminal Procedure. The provision contained in Chapter XXI of the Code of Criminal Procedure enjoins upon the Magistrate the manner in which he is to proceed to deal with the matter relating to the summary trial and as such any deviation would be wholly without jurisdiction.
18. So far the matters relating to execution of the order passed u/s 630 of the Act are concerned, those matters certainly need to be dealt with all promptitude so that orders be executed at the earliest. Such matters never warrant to be dealt with leisurely rather those matter need immediate attention so that all the matters relating to execution of the order passed u/s 630 be disposed of at the earliest.
19. With the aforesaid observation, this writ application is disposed of.
