2000-(001)-CLJ -0238 -MP Companies Act Judgements

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2000-(001)-CLJ -0238 -MP

MOHD. ZAMEEL HUSSAIN v. ASST. LABOUR COMMISSIONER, JABALPUR AND OTHERS.

Writ Petition No. 1218 of 1998, decided on March 31, 1999.

IN THE HIGH COURT OF MADHYA PRADESH

A. C. DHANDE, Advocate, for the petitioner.

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R. MENON, Advocate, for the respondent.

ORDER

S. K. KULSHRESTHA, J. – By this petition, the petitioner has challenged the order, dated 10.3.1990 passed by the learned Chief Judicial Magistrate, Damoh (respondent No. 4), by which application filed on behalf of respondent Nos. 2 and 3 under section 630 (2) of the Companies Act, has been entertained by the said Chief Judicial Magistrate. The petitioner was appointed by the respondent No. 3 on 16.9.1996 as an operator in the quarry on probation for a period of 6 months. On the charges of misbehaviour, a charge sheet, dated 14.3.1997 was issued to him and after a domestic enquiry, the petitioner was awarded punishment of dismissal from service by order, dated 11.6.1997. It is not disputed that the petitioner was allotted a quarter by the company and on cessation of his employment on account of his dismissal from services, he was directed to vacate the same.

2. The case of the petitioner, in short, is that he was victimised on account of his union activities, and against the termination of his service, he had raised a dispute before the Assistant Labour Commissioner (respondent No. 1) and had made an application for retention of the quarter; but despite knowledge of the pending proceedings before the respondent No. 1, the employers (respondent Nos. 2 and 3) filed an application under section 630 of the Companies Act before the Chief Judicial Magistrate, Damoh, for restoration of the possession of the said quarter to the company. On receipt of the notice, the petitioner raised preliminary objection about the jurisdiction of the respondent No. 4 to entertain the said application during pendency of the proceedings before the respondent No. 1, but the respondent No. 4, rejecting the objection, passed order dated 10.3.1998 (Annexure-P/9) directing the petitioner to vacate the quarter.

3. Respondent Nos. 2 and 3 have filed their returns in which the respondents have pointed out that the quarter in question was allotted to the petitioner by virtue of the contract of service with the result, on termination of his service, the petitioner was required to vacate the same and hand over its possession to the company. The respondents have pointed out that after termination of the petitioner’s services on 11.6.1997, application under section 630 of the Companies Act was filed before the Chief Judicial Magistrate on 17.11.1997 with the result, the proceedings for conciliation initiated on 20 November, 1997, could otherwise not have been a bar. The respondents have asserted that pendency of a dispute does not take away the right of the company to make such an application before the Chief Judicial Magistrate and, therefore, the order passed by the respondent No. 4 does not call for any interference.

4. Learned counsel for the petitioner has referred to section 33(1) of the Industrial Disputes Act, and has urged that during the pendency of any conciliation proceedings before a conciliation officer, there is a statutory injunction against the employer restraining the employer from altering to the prejudice of the workman, the conditions of service applicable to him immediately before the commencement of such proceeding, save with the permission in writing of the authority before which the proceeding, is pending. Learned counsel has, therefore, contended that the respondent No. 4 on being apprised of this legal position, ought not to have proceeded with the matter and should have either dismissed the application or have kept the proceedings in abeyance till conclusion of the proceedings initiated before the respondent No. 1. Learned counsel for the respondent Nos. 2 and 3 has, however, submitted that a liability to vacate the quarter being coterminous with the employment, the same did not amount to any alteration of the condition of service during the pendency of the conciliation proceedings which had admittedly been initiated after the petitioner had been dismissed from service. Learned counsel for the respondents has also pointed out that in any case, the proceedings under section 630 of the Companies Act had been initiated even before any application was made before the respondent No. 1 with the result, the proceedings before the respondent No. 1 could not be said to be pending when the said application was made before the respondent No. 4.

5. The short question that arises is as to whether, in the present case, the application filed under the provisions of section 630 (2) of the Companies Act was maintainable before the respondent No. 4. Section 630 provides for penalty for wrongful withholding of property and lays down that if any officer or employee of a company wrongfully obtains possession of any property of a company or having any such property in his possession wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by the 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. Sub-section (2) of section 630 of the Companies Act empowers the court trying an offence to order such officer or employee to deliver up or refund any such property wrongfully obtained or wrongfully withheld or in default to suffer imprisonment for a term which may extend to 2 years. The question, however, is whether the jurisdiction of the court empowered to take cognisance under section 630 of the Companies Act is suspended during the pendency of the proceedings under section 33 of the Industrial Disputes Act, 1947. Section 33 of the Industrial Disputes Act, 1947 reads as under :

“Section 33. Conditions of service, etc., to remain unchanged under certain circumstances during pendency of proceedings – (1) During the pendency of any conciliation proceeding before a conciliation officer or a Board or of any proceeding before (an arbitrator or) a Labour Court or Tribunal or National Tribunal in respect of an industrial dispute, no employer shall, –

(a) In regard to any matter connected with the dispute, alter, to the prejudice of the workman concerned in such dispute, the conditions of service applicable to them immediately before the commencement of such proceeding; or

(b) For any misconduct connected with the dispute, discharge or punish, whether by dismissal or otherwise, any workman concerned in such dispute save with the express permission in writing of the authority before which the proceeding is pending.

(2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute (or, where there are no such standing orders, in accordance with the terms of the contract, whether express or implied, between him and the workman), –

(a) alter, in regard to any matter not connected with the dispute, the conditions of services applicable to that workman immediately before the commencement of such proceeding; or

(b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise, that workman :

Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.

(3) Notwithstanding anything contained in sub-section (2), no employer shall, during the pendency of any such proceeding in respect of an industrial dispute, take any action against any protected workman concerned in such dispute –

(a) by altering, to the prejudice of such protected workman, the conditions of service applicable to him immediately before the commencement of such proceeding; or

(b) by discharging or punishing whether by dismissal or otherwise, such protected workman, save with the express permission in writing of the authority before which the proceeding is pending.

Explanation. – For the purpose of this sub-section, a ‘protected workman’, in relation to an establishment, means a workman who, being (a member of the executive or other office bearer) of a registered trade union connected with the establishment, is recognised as such in accordance with rules made in this behalf.

(4) In every establishment, the number of workmen to be recognised as protected workmen for the purposes of sub-section (3) shall be one per cent of the total number of workmen employed therein subject to a minimum number of five protected workmen and a maximum number of one hundred protected workmen, and for the aforesaid purpose, the appropriate Government may make rules providing for the distribution of such protected workmen among various trade unions, if any, connected with the establishment and the manner in which the workmen may be chosen and recognised as protected workmen.

(5) where an employer makes an application to a conciliation officer, Board, (an arbitrator), Labour Court, Tribunal or National Tribunal under the proviso to sub-section (2) for approval of the action taken by him, the authority concerned shall, without delay, hear such application and pass (within a period of three months from the date of receipt of such application) such order in relation thereto as it deems fit,

Provided that where any such authority considers it necessary or expedient so to do, it may, for reasons to be recorded in writing, extend such period by such further [period ?] as it may think fit;

Provided further that no proceedings before any such authority shall lapse merely on the ground that any period specified in this sub-section had expired without such proceedings being completed.”

6. On a plain reading of the provisions, it is clear that the section contemplates alteration of conditions during the pendency of any conciliation proceeding before a conciliation officer or a Board. In the present case, it is not disputed that the quarter had been allotted to the petitioner by virtue of his employment and the petitioner was not entitled to retain the same on termination thereof. Learned counsel for the respondents has invited attention to a Division Bench decision of this court in L. S. Nair v. Hindustan Steel Ltd., Bhilai (AIR 1980 MP 106) wherein the case of an employee allotted a quarter by the management subject to the conditions that on termination, he shall not be allowed to retain the quarter for a period exceeding one month from the date, the proceedings were initiated under the Public Premises (Eviction of Unauthorised Occupants) Act, on failure of the employee to vacate the quarter. The employee had challenged the maintainability of the proceedings on the ground that the validity of the order of termination was pending adjudication in the Labour Court. It was held that there was nothing to indicate that the Estate Officer will have no jurisdiction to evict a person from a quarter until the dispute relating to termination of services was finally decided by the Labour Court. The observation contained in paragraph 8 of the said judgment read as follows :

“8. It was then contended by the learned counsel that the definition of the expression ‘unauthorised occupation’ as contained in the Public Premises Act must be so construed as not to cover a person, the validity of the order of termination of whose employment is pending adjudication in the Labour Court. We have already stated that the petitioner was allotted the quarter, being an employee of the company. The petitioner’s employment was terminated. According to the rules relating to the allotment of quarters, the petitioner ceased to have any right to occupy the quarter from the date of the termination of his employment. The order of termination passed against an employee has to be treated as valid until it is set aside by the Labour Court. The Estate Officer functioning under the Public Premises Act has no jurisdiction to decide upon the validity of the termination of services of an employee. He has to proceed upon the footing that the termination of services is valid until set aside by the Labour Court. There is nothing in the definition of unauthorised occupation to which references has already been made which may indicate that in such cases, the Estate Officer will have no jurisdiction to evict a person from a quarter until the dispute relating to termination of service is finally decided by the Labour Court. We have already stated that the order of termination of services passed against the petitioner suffered from the defect that it was passed by an authority lower in rank to the appointing authority, and thereby contravened the requirements of certified standing orders. Even as it would be open to the Labour Court to uphold the order if it is justified on the material collected in the domestic enquiry R. K. Nair v. C. M., Bhilai Steel Plant 1977 Lab LC 1079 (MP) (supra). The order of termination cannot, therefore, be ignored as void and inoperative. As earlier stated by us, the termination is to be treated as valid and effective until it is set aside. The petitioner has, therefore, no authority to occupy that quarter till the order of termination is in force.”

7. In the present case also, the position is no different except that the proceedings have been initiated by the respondents under the provisions of section 630 of the Companies Act. Section 630 is a penal provision for a wrongful act of obtaining possession, or wrongfully withholding any property. Sub-section (2) creates an independent offence if the direction of the court to deliver the property, is not obeyed. Pendency of conciliation proceeding under section 33 of the Industrial Disputes Act, much less the proceedings which were initiated after the initiation of proceedings under section 630 of the Companies Act, does not, therefore, create a bar to the jurisdiction of the court to deal with the complaint under section 630 of the Companies Act. References may also be made to a decision of the Bombay High Court in Chandragupta Gupta v. Padmanabha Subramani (1989) 65 Comp Cas 190 (Bom) in which it has been observed that the fact that there is a dispute between the petitioner and the company as to whether the services have been properly terminated, does not in any way affect the continuation of the trial and decision of the criminal case. It therefore, clearly follows that pendency of conciliation proceedings before a conciliation officer cannot arrest or suspend the jurisdiction of the court to deal with the complaint under section 630 of the Companies Act.

8. The court by the impugned order has exercised the jurisdiction under section 630 (2), and, as discussed above, the jurisdiction was not taken away by the pendency of the proceedings before the respondent No. 1. The petition has, therefore, no merit. Accordingly, this petition is dismissed with no order as to costs.

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