IN THE HIGH COURT OF MADRAS 

N. P. K. MENON, Advocate, for the petitioner. 

N. ISHTIAQ AHMED, Advocate, for the respondent. 

JUDGMENT 

B. AKBAR BASHA KHADIRI, J. - In both the petitions, the petitioner is invoking the inherent jurisdiction of this court to call for the records in STC No. 3011 of 1993 and STC No. 2470 of 1993, on the file of the Judicial Magistrate No. VII, Coimbatore, and set aside the orders passed by the learned Judicial Magistrate confirmed by the learned Sessions judge, Coimbatore in Crl. R.P. Nos. 63 and 64 of 1995. Both the petitions have arisen in this way : 

2. The respondent is a company incorporated under the Companies Act. It has five directors of whom the petitioner holds 20 per cent. of the subscribed capital. The petitioner's father was also a director. He held another 40 per cent of the subscribed capital. After the demise of his father, the petitioner holds 40 per cent. of the subscribed capital. The other four directors of the company are in inimical terms with the petitioner. In order to get rid of the petitioner from the company, they created false record to the effect that the petitioner did not attend three consecutive board meetings and, consequently, he ceased to be a director as per the provisions of section 283 (1)(g) of the Companies Act. The petitioner was entrusted with the register of contracts, register of director's share holdings, register of charges, Anglo French Textile file, Southern Railway contract file and bank correspondence, volume 1. According to the other directors, despite demands, the petitioner refused to return the aforesaid records and thus violated the provisions of section 630 of the Companies Act. They preferred a complaint to the Judicial Magistrate No. VII, Coimbatore, who took the case on file in STC No. 3011 of 1993, and after enquiry held that the petitioner is guilty of an offence under section 630 of the Companies Act and sentenced him to pay Rs. 200 as fine and in default to undergo simple imprisonment for one month. The petitioner preferred revision before the learned Sessions Judge in Crl. R.P. No. 64 of 1995. The learned Sessions Judge dismissed the Crl. R.P. and confirmed the sentence. Similarly, the other directors alleging that a motorcycle bearing registration No. TN-37-D 6436 belonging to the company was entrusted to the petitioner, the petitioner having ceased to be a director and, therefore, he should have surrendered the vehicle to the company. They preferred another complaint before the same Judicial Magistrate alleging that the petitioner has committed another offence under section 630 of the Companies Act, which the learned Judicial Magistrate took on file in STC No. 2470 of 1993. After enquiry, the learned Judicial Magistrate held that the petitioner is guilty of the offence and sentenced him to pay a fine of Rs. 200 in default to undergo simple imprisonment for one month. The petitioner preferred Crl. C.R.P. No. 63 of 1995, but the learned Sessions Judge confirmed the judgment of the learned Judicial Magistrate against which the petitioner has preferred Crl. O.P. No. 6150 of 1998. 

3. Heard both sides. 

4. The petitioner is invoking the inherent jurisdiction of this court under section 482 of the Code of Criminal Procedure to set aside the orders passed by the learned Judicial Magistrate, confirmed by the learned Sessions Judge. 

5. Section 630 of the Companies Act recites as under : 

"630. Penalty for wrong 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 a purpose other than those expressed or directed in the articles and authorised by this 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. 

(2) The court trying the offence may also order such 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." 

6. Section 2 (30) of the Companies Act defines an officer of the company as under : 

"'officer' includes any director, managing agent, secretaries and treasurers, manager or secretary (or any person in accordance with whose directions or instructions the Board of directors or any one or more of the director is or are accustomed to act) and also includes - 

(a) where the managing agent (or the secretaries and treasurers) is or are a firm, any partner in the firm; 

(b) where the managing agent or the secretaries and treasurers is or are a body corporate, any director or manager of the body corporate. 

7. Section 283 (1)(g) of the Companies Act recites as under : 

"283. Vacation of office by directors. - (1) The office of a director shall become vacant, if - .. 

(g) he absents himself from three consecutive meetings of the Board of directors, or from all meetings of the Board for a continuous period of three months, whichever is longer without obtaining leave of absence from the Board." 

8. A combined reading of all these sections would go to show that to attract an offence under section 630 of the Companies Act, two ingredients should be made out 

(a) wrongfully obtaining possession of any property of a company or; 

(b) having been placed in possession of any such property during the course of employment, he should be wrongfully withholding or in possession of it after termination of his employment. 

9. In the instant case, it is not in dispute that all the records mentioned and the motor cycle are admittedly the properties of the company. The petitioner admits that they have been entrusted to him. Therefore, it cannot be said that the petitioner has wrongfully obtained possession of the properties. The only question is whether he is wrongfully withholding the properties. That depends on the fact whether or not he had ceased to be a director. 

10. According to learned counsel for the petitioner, the petitioner had not ceased to be a director, but continues to be a director. According to learned counsel, Mr. N. P. K. Menon, the petitioner had filed a suit in O.S. No. 726 of 1998, on the file of the District Munsiff, Coimbatore, for a declaration that he did not cease to be a director. That suit is pending and when the matter is sub judice, the criminal court cannot presume that the petitioner had ceased to be a director and punish him for an offence under section 630 of the Companies Act. In support of his contention, learned counsel cited the following decision in Damodar Das Jain v. Krishna Charan Chakraborti (1985) 1 Comp LJ 445 (Bom) : (1985) 57 Comp Cas 115 (Bom) and Vishanjee Dungarmal Futnani v. Mrs. Krishna Mohanlal Futnani (1990) 69 Comp Cas 585 (SC). In both the cases, the Bombay High Court has held that bona fide dispute of civil nature cannot be tried in a criminal forum. In fact, the earlier decision cited, i.e., Damodar Das Jain v. Krishna Charan Chakraborti (1985) 57 Comp Cas 115 (SC) has been affirmed by the Hon'ble Supreme Court in Damodar Das Jain v. Krishna Charan Chakraborti (1985) 1 Comp LJ 445 (Bom) : (1990) 67 Comp Cas 564. Those two cases relate to the nature of the property. If there is a dispute regarding the title to the property, it has been held that the Magistrate had no jurisdiction to decide the dispute regarding the title under section 630 of the Companies Act. Learned counsel for the petitioner cited a decision in V. M. Shah v. State of Maharashtra (1995) 4 Comp LJ 467 (SC) : (1995) 5 SCC 767 : (1996) 85 Comp Cas 465 (SC) to stress that the judgment of the criminal court stands superseded by the judgment of the civil court. According to learned counsel, now the petitioner has filed a civil suit in O.S. No. 726 of 1998 on the file of the District Munsif Coimbatore, which is pending trial. If the learned District Munsiff holds that the petitioner still continues to be a director then the fine and the default imprisonment imposed upon the petitioner, would be to the detriment of the honour of the petitioner, which would lower his esteem in the minds of the right thinking people and also cause hardship to him. According to learned counsel, till the question is decided by civil court, the criminal court ought not to have enquired into the matter and held that the petitioner is guilty of an offence under section 630 of the Companies Act. 

11. Learned counsel for the respondent, Mr. Ishtiaq Ahmed, contends that the question whether the petitioner ceased to be a director does not arise for consideration in that even as an office holder, he had not produced the records of the company, when the company had made such demand by issue of notice and, therefore, the provisions of section 630 of the Companies Act are attracted. Learned counsel further argued that because the petitioner had filed a civil suit, that would not bar the criminal court from considering the question whether the petitioner had committed an offence, under section 630 of the Companies Act. Learned counsel cited an authority in Atul Mathur v. Atul Kalra (1989) 3 Comp LJ 127 (SC) : (1989) 4 SCC 514 : (1990) 68 Comp Cas 324 (SC), where the Hon'ble Supreme Court has held that merely because the accused had schemingly filed a suit in the civil court, it can never be 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 of the Companies Act. If such a view is taken, it would not only 'lead to miscarriage of justice, but render ineffective the salutary provision of section 630 of the Companies Act. 

12. Coming to the facts of the instant case, it should be pointed out that the complaint has been preferred against the petitioner as early as 1993. The trial court has disposed of the matter on 23 May, 1995, and the revisional court has also disposed of the matter on 17 March, 1998. It is curious that the petitioner had filed the civil suit only during 1998. Of course, the petitioner had filed a company petition in C.P. No. 1 of 1996 before this court which was later dismissed. Even C.P. No. 1 of 1996 had not been filed before the learned Judicial Magistrate disposed of the criminal case pending against the petitioner. What has been stated by their Lordships of the Supreme Court in Atul Mathur v. Atul Kalra (1989) 3 Comp LJ 127 (SC) : (1989) 4 SCC 514 : (1990) 68 Comp Cas 324, squarely applies to the facts of the instant case, because the petitioner had filed a suit in civil court, under the given circumstances, it cannot be said that the civil court was in seisin of the matter at the time when the learned Judicial Magistrate passed order. 

13. The petitioner has not gone on appeal or revision to the appellate or the revisional court to consider the merits of the matter to analyse whether or not the learned Judicial Magistrate has considered the aspect whether the petitioner ceased to be a director in the proper perspective. The petitioner seeks the inherent jurisdiction of this court under section 482 of the Criminal Procedure Code. Inherent jurisdiction can be invoked only if there had been abuse of process of law. This court cannot go into the merits of the matter and assess the evidence. It is not as if the learned Judicial Magistrate had not considered this aspect that is whether the petitioner has ceased to be a director. The learned Judicial Magistrate has referred to documents under Exhs. B-4 to B-6, the resolution passed by the company, which was controverted, and held that the petitioner has ceased to be a director. The arguments of learned counsel that the question whether the petitioner absented himself consecutively for three meetings has to be gone into by the civil court and it is, a complicated question, which can be decided by the civil court only is not appealing to me. 

14. In the result, both the petitions are dismissed. Consequently, Crl. M.P. Nos. 3564 of 1998, 3014 of 1998 and 5780 of 1998 are closed.