S. Palaniswamy and Others vs Shree Janardhana Mills Ltd.

Janarthanam, J.—The Petitioners in all these matters are respectively accused in C.C. Nos. 115 to 118 of 1991 on the file of the Chief

Judicial Magistrate, Coimbatore facing prosecution for the alleged offence u/s 630 of the Companies Act, 1956, for wrongful with-holding the

premises of Shri Janarthana Mills Limited, Uppilipalayam Post, Coimbatore-641015--the Respondent herein, allotted to them during their tenure

of office, even subsequent to their retirement, which event respectively occasioned on 30.12.1987, 30.8.1988, 30.3.1989 and 30.10.1988.

Subsequent to their retirement, the Respondent issued notices calling upon them to vacate the premises and hand over vacant possession, giving

them reasonable time. Since they did not comply with the same, the Respondent had been impelled to resort to prosecution as aforesaid.

All the Petitioners, it is said approached a civil forum in filing a suit for bare injunction and on an interlocutory application filed therein obtained

orders for maintenance of status quo.

After receipt of process, all the Petitioners came forward with the present actions invoking the inherent jurisdiction of this Court to quash the

criminal proceedings initiated against them.

Learned Counsel appearing for the Petitioners would vehemently contend that on the face of the orders of the civil Court for maintenance of the

status quo in the Civil suit filed by them, the proper course to be adopted is the prosecutions launched before the Criminal court are liable to be

quashed, in as much as it is the established law that the criminal Courts are bound to respect the orders of the Civil Courts.

The submission of learned Counsel appears to be luminous and attractive at first sight. But the utter untenability of this submission however gets

exposed by delving deep into the facts and circumstances of the case.

There is no pale of controversy that the premises in question belong absolutely to the Respondent. All the Petitioners were permitted to occupy

the premises during their tenure of office as an incident of service. In such a situation, the entitlement to possession of the premises enures to their

benefit during their tenure of office and the moment, their employment gets terminated, for whatever, reason, it goes without saying that they have

to vacate the premises and hand over possession for the benefit of their successors. There is no question of any relationship of landlord and tenant,

in such cases. It is rather obvious that the Civil Court, before which a suit appeared to have been filed for bare injunction, on the basis of the claim

of tenancy, does not appear to have been properly apprised of the legal position arising from the factual foundation of the Petitioners having been

allotted the premises by the Respondent, as an incident of service, creating no relationship of landlord and tenant. It is apparent and quite evident,

on the face of the salutary provisions adumbrated u/s 630 of the Companies Act that the moment the employment ceases, the employee is not

entitled to remain in possession of the premises allotted to him and the withholding of the premises, after cessation of the employment, amounts to

wrongful withholding, punishable as an offence by the criminal Court, besides his being permitted to vacate and hand over possession to the

company which allotted him the premises. It is thus clear that the offence of wrongful withholding of the premises becomes complete and the

moment there is cessation of employment.

A situation similar to the one on hand arose for consideration in the case in Krishnan Avtar Bahadur v. Col. Irwin Extross (1986) 59 Comp.

Cas. 417 wherein a learned Judge of the Bombay High Court expressed:

The plea of tenancy is not at all open on the facts of this case. The flat in question belonging to the company was occupied by the Petitioner during

the term of his employment with the company and he was entitled to occupy it only during his employment, with the company. After the termination

of his services with the company, he could not claim to continue to occupy the premises on the ground that he was a tenant thereof. 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 of tenancy is based and if on more facts no plea can be raised, such a plea cannot be entertained. Consequently, I reject the contention of the

learned Counsel for the Petitioner accused that the criminal court has no jurisdiction to entertain the complaint u/s 630 of the Companies Act, as

the Petitioner claims to be a tenant thereof.

I respectfully agree with the view expressed by learned Judge.

In this view of the matter, it cannot be stated that the launching of prosecution for the offence u/s 630 of the Companies Act is incompetent even

on the face of the pendency of the civil litigation between the parties.

For the reasons stated above, all the petitions deserve to be dismissed even at the admission stage and are accordingly dismissed.