JUDGMENT
F.I. Rebello, J.
1. Respondent No. 1, as the Administrative Officer of M/s. Mahindra and Mahindra Limited, filed a complaint against the petitioner herein before the Court of the Metropolitan Magistrate, 59th Court, Vile Parle, Bombay, being Case No. 4/S/95 (38/S/85). It was the case of the respondent No. 1 that the petitioner was in possession of premises belonging to the company and though he ceased to be an employee, he had refused to hand over possession of the premises and consequently the complaint. Process in the case was issued on 29th August, 1988. There was one more accused who was discharged by order dated 27th July, 1994 and charge under Section 630 of the Companies Act and 406 of the Indian Penal Code was framed against the petitioner herein. In the complaint, the complainant set out that the petitioner was initially employed on probation by appointment letter dated 9th October, 1953. He was confirmed on 27th April, 1954 and his resignation was accepted as and on July, 14, 1972. In letter dated 22.1.1964 some of the terms and conditions of the employment were set out. One of the conditions was that the petitioner would be entitled to free unfurnished flat subject to the condition that the lease would be in the name of the company. In fact the premises were taken on leave and licence/lease basis. The first such agreement is dated 15th April, 1959 entered between Mr. B.N. Madon and Mrs. F.B. Madon and Mahindra and Mahindra Limited. On the acceptance of the petitioner’s resignation the petitioner was given letter dated May 12, 1972 whereby the petitioner was informed that as and from July, 15, 1972 the petitioner would be paid retainership of Rs. 1,000/-. It was further set out that the petitioner will be permitted to stay in the office flat in Sputnik subject to the condition that the petitioner would surrender the flat to the company on securing alternative accommodation or leaving out of Bombay or on termination of the retainership whichever is earlier. It was further set out that the arrangement was expected to continue until the petitioner reaches the age of superannuation of 60 years subject to the termination by either side by one month’s notice. On 6th August, 1973 the petitioner and the company entered into an agreement whereby the petitioner was treated as an employee and allowed to reside in the premises. The licence fee for the premises was to be deducted from the emoluments. There were some other clauses which need not be adverted to. The company addressed a letter dated July 29, 1983, setting out therein that as per the records of the company he would be completing 60 years on October 2, 1983 as his date of birth as per the company’s record was October 3, 1923 and his retainership would stand terminated on that date and to hand over the vacant possession of the premises. There was subsequent correspondence by the company.
2. The petitioner chose not to vacate the premises. It was his contention that in fact he was the licensee/tenant of the premises and that the agreement between the company and the landlord was only entered into as it was required by the landlord. Such a defence was raised for the first time by the petitioner by his letter dated September 21, 1983. The petitioner has thereafter filed a Rent Declaratory Suit No. 2594 of 1988 in the Court of Small Causes at Bombay, which is pending wherein the petitioner has sought relief of declaration that he is the tenant of the landlord and in the alternative a declaration that he is a deemed tenant or protected licensee. The petitioner is depositing the licence fees in respect of the premises in the Court of Small Causes.
An additional fact may also be noted that the company herein also filed a suit being T.E.C. No. 101/121/91 wherein they have sought the relief of eviction against the petitioner herein.
3. By judgment dated 22nd April, 1996 the petitioner was convicted under Section 630(1) of the Companies Act and Section 406 of I.P.C. He was also sentenced to pay fine of Rs. 1,000/-, in default to suffer S.I. for 10 days for each default i. e. for the aforesaid period of 150 months and continue to pay same fine amount of Rs. 1,000/- in default to suffer S.I. for 10 days each upto the date of actual delivery of possession to the company. A direction was issued under Section 630(2) of the Companies Act to hand over possession of the disputed premises and in default that the petitioner would undergo sentence of 2 years simple imprisonment. There is a further direction that if the amount is paid a sum of Rs. 1,25,000/- out of it be paid to the company as compensation. No sentence was imposed under Section 406 of the Indian Penal Code.
The petitioner aggrieved by the said sentence preferred an Appeal before the Sessions Court for Greater Bombay being Criminal Appeal No. 61 of 1996. By judgment dated 18th September, 1998 the Appeal was partly allowed. The conviction and sentence under Section 406 was set aside. The conviction under Section 630 was however, upheld. The direction regarding the payment of compensation was also maintained. It is against this order that the present Revision Application has been preferred by the petitioner herein.
4. At the hearing of the petition the principal contentions raised are as under:- (1) the provisions of Section 630 were not attracted as the petitioner was not an officer or employee within the meaning of Section 630 of the Companies Act; (2) that the case involves a question of Civil Law and, therefore, cannot be gone into in proceedings under Section 630 of the Companies Act; (3) on the face of the petitioner’s case it could not be said that the defence was not bonafide or that the suit was filed in scheming manner. It is further contended that the judgment in Kannankadi Gopal Krishnan Nair v. Prakash Chunder Juneja and Anr. 1994 Co. Cases 104 requires reconsideration insofar as concept of continuing wrong and fine imposed.
On behalf of the respondents it is contended that there is no error which could be corrected in Revision and consequently the Revision Application should be rejected.
Both parties have relied on judgments which will be referred to later.
5. With the above background let me first deal with the first contention raised on behalf of the petitioner herein that he is not an employee or officer within the contemplation of Section 630 of the Companies Act and consequently his conviction under Section 630 has to be quashed and set aside. Section 630 of the Companies Act provides that if any officer or employee wrongfully obtains possession of any property of the company or having any such property in his possession, wrongfully withholds it, he shall on a complaint of the company be punishable with fine which may extend to one thousand rupees. Sub-section (2) of Section 630 provides that 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 to suffer imprisonment which may extend to two years. It is, therefore, clear that for the application of Section 630 the person in possession of the property must be an officer or employee of the company. That an ex-employee or ex-officer would also come within this purview of Section 630 is no longer res Integra as the matter stands concluded that Section 630 of the Companies Act will also apply to persons who have ceased to be officers or employees. The contention of the petitioner, however, is that on his retirement fresh agreement was entered into between the petitioner on the one hand and the company on the other which is Exhibit “O” to this Application. The contention is that on the petitioner retiring from the employment of the company the petitioner by a contract was retained by the company and as a part of that retainership he was also allowed Lo occupy the premises. It is contended that this occupation, therefore, is not occupation by an ex-officer or ex-employee, or by an officer or employee but in a different capacity altogether and there being no master and servant relationship inasmuch as the company has no control either disciplinary or otherwise on the work of the petitioner. This must necessarily lead to the conclusion that the ingredients of Master and Servant relationship are not existing and/or missing. The learned Counsel for that purpose has taken me through the judgment of the Apex Court in the case of Laxminarayan Ramgopal and Sons Ltd. v. Government of Hyderabad . In that case the Apex Court had to consider the distinction between relations of master and servant and a principal and agent. The Apex Court noted that between a principal and agent the principal has the right to direct what work the agent has to do, but the master has the further right to direct how the work is to be done. There is some further discussion as to how an agent is to be distinguished on the one hand from a servant and on the other an independent contractor. A servant acts under the direct control and supervision of his master and is bound to conform to all reasonable orders given to him in the course of his work. An independent contractor on the one hand, is entirely independent of any control or interference. In the case of Shiv Nandan Sharma v. The Punjab National Bank Ltd again the expression master, servant and independent contractor came up for consideration. That was a matter under the Industrial Disputes Act, 1947. The Apex Court noted that the master is one who not only prescribed to the workman the kind of work, but directs or at any moment may direct the manner in which the work has to be done; whereas an independent contractor is one who undertakes to produce a given result but in the actual execution of the work he Is not under the order or the control of the person for whom he does it, and may use his own discretion to do the work. Reliance was also placed on the judgment in the case of Ram Prashad v. The Commissioner of Income Tax, New Delhi . That was a case where the question arose whether the Managing Director could be said to be an employee. The issue arose out of the provisions of the Income Tax Act.
To my mind though the said judgments have defined relationship of master and servant they are of no consequence while deciding the issue arising in this case. It is an admitted position that the petitioner was an employee of the company. The documentary evidence on record which were relied upon by the Courts below show that the licence agreement for the premises was between the company and the landlords. The petitioner was not a party to the agreement. On his retirement the petitioner was retained by the company on certain terms and conditions by letter of May 12, 1972. The proposal by the petitioner to retire as Senior Engineer and retain him as an Advisor on a part time basis and to allow to retain the company’s flat was accepted under certain terms and conditions. Subsequent to this letter by the company, an agreement was entered into between the petitioner and the company for the purpose of retaining the flat. By the agreement the petitioner was deemed to be an employee and allowed to continue to reside in the premises as an employee with a condition that such occupation would cease on his employment being terminated or leaving such employment or on his transfer away from Bombay or on his death whichever is earlier. The execution of this document is not denied. Therefore on the date the agreement was entered into the petitioner as an ex-employee on his request was allowed to continue in the premises on certain terms and conditions. The mere fact that the petitioner was being paid retainership fees cannot, in my view, make any difference insofar as the status of an employee is concerned. A request of an ex-employee to continue in occupation of the flat for some time and payment of retainership fees cannot alter the status between the petitioner and the company. The petitioner when he entered into the premises was an employee. He is an ex-employee in occupation of the premises. The letter dated May 12, 1972 and/or the agreement dated 6th August, 1973 do not create or spell out any other relationship between the petitioner and the company. On the contrary in terms of the agreement he was designated as an employee. In the light of that the first contention on behalf of the petitioner must be rejected.
6. That brings to the second and third contentions namely that the case involves bonafide dispute and as the matter is before the Civil Court and as suits have been filed both by the petitioner and the company the complaint ought to be rejected. Once I hold that the petitioner is in occupation as an ex-employee the question whether because of pendency of the Civil Suit the complaint should be rejected itself has to be rejected. However, since the learned Counsel has drawn my attention to some judgments of the Apex Court and has argued the matter considerably on that point, I will dispose of the said contention. In the case of Damodar Das Jain v. Krishna Charan Chakraborti and Anr. the Apex Court was considering an appeal by the occupant on a complaint filed by the company. It was the case of the company there that they took on licence the said flat from the owner on the basis of a paying guest agreement and permitted the respondent No. 1 to stay therein. The employees refused to vacate the flat whereupon a complaint was filed and the respondent was convicted. The appeal filed before the Sessions Judge was allowed and the judgment of the Magistrate was reversed. The appeal before the High Court was dismissed. The High Court took the view that the questions whether the company could be said to be a tenant as contemplated under the Bombay Rent, Hotel and Lodging House Rates Control Act, 1947 and whether after the written agreement of licence in favour of the company has expired, could it be said that the company was licensee of the said flat. The Court observed that there were complicated questions of Civil law and the Magistrate’s Court has no jurisdiction to decide the same. The High Court felt that the disputes raised were bonafide. In view of those findings recorded by the High Court the Apex Court rejected the appeal holding that these are questions which could not be decided by the Magistrate, but by the Civil Court. The next judgment referred to is in the case of Atul Mathur v. Atul Kalra and Anr. . This judgment has been relied upon by the Sessions Court as also by the Magistrate. In Atul Mathur (supra) the complaint was filed under Section 630 of Cr.P.C.A civil suit was filed by the employee claiming that he was entitled to the premises in his own right. There was a leave and license agreement in favour of the company entered into by the accused acting as agent of the company, contemporaneously execution of affidavit and writing of letter of licenser accepting the company to be licensee. The accused there claimed right to continue in possession of the premises as licensee based on two letters written by Junior Officer of the company. The Apex Court noted that merely because the accused had schemingly filed a suit in Civil Court it can never be said that the Civil Court was in seisin of a bonafide dispute between the parties and as such the Criminal Court should have stayed its hands when the company filed complaint under Section 630 of the Act. Thus whether the dispute is bonafide or not will depend on the facts of each case. The mere fact that a suit has been filed by itself cannot be said to be a bonafide dispute.
In the plaint the plaintiff has prayed for declaration that he is a tenant of the landlords or a deemed tenant. At no point of time during his continuance in the premises did the petitioner challenge the agreement between the company and the landlords. Evidence on record shows that the rents were also being paid by the company to the landlords. The petitioner has not sought any declaration in respect of the agreement dated 6th August, 1973 wherein he agreed to be in occupation of the premises as an employee and vacate the same on termination of that employment. The said agreement again was pursuant to letter of May 12, 1972. Even otherwise prima facie it is impossible to accept that the petitioner has a bonafide claim to continue to reside in the premises. He by the agreement had agreed to continue to reside in the premises as an employee subject to terms and conditions, one of them being reaching the age of superannuation. The company permitted him to continue to reside till superannuation. The petitioner cannot be allowed to go back written agreement which has not been chellenged anywhere. In the face of this evidence on record, it is not possible to contend that the Criminal Court had to stay its hands in these proceedings and leave it to the Civil Court to decide the issues arising therein. Even otherwise as held by the Apex Court in the case of V.M. Shah v. State of Maharashtra and Anr. . findings by the Criminal Court can be displaced on a decision by the Civil Court. It is not, therefore, a case where a party would be left without a remedy at law or legal rights impaired on account of the order passed in the complaint. In the light of that I find no merits in the second and third contentions which are also rejected.
7. The last contention which was raised by the petitioner was that the judgment of this Court in K.G.K. Nair (supra) requires reconsideration on the ground that it does not lay down the correct law. The substance of the argument is that the penal provisions must be strictly construed. It is contended that nowhere in Section 630 is the offence treated as a continuing offence in respect of which the fine can be imposed as laid down by the learned Single Judge of this Court in the case of K.G.K. Nair (supra). It is pointed out Section 630 is a departure from the ordinary law whereby instead of filing a suit for recovery of possession the company is permitted recovery of possession by filing a complaint. In other words the normal Civil procedure has been dispensed with and a speedier remedy has been provided for. It is pointed out that these proceedings cannot be converted into proceedings for recovery of damages. For all purposes this is what follows from the view taken by the learned Single Judge in K.G.K. Nair (supra). The company, it is pointed, if it wants to recover damages from its employees must file a suit and lead such evidence warranting the Court awarding damages. Section 630, it is pointed out, is no shortcut for such a procedure being followed. The language of Section 630 is that the person can be punished with fine which may extend to Rs. 1,000/-. It is further pointed out that suppose there is a bonafide dispute and because of the judicial delays there is no judgment in the matter must a party who has a substantial defence which is bona fide be punished by imposing fine for each day that he continues in occupation. If it is each day, why not every minute or for that matter every second and what is the measure of damage. This issue ought to have been decided. However, from a suggestion from the Court to the company as to whether they were pressing for sustaining that part of the order Trial Court and the Appellate Court, on behalf of the company, their learned Counsel makes a statement that the company would leave that to the Court.
8. Considering the circumstances on record the orders of the Trial Court is confirmed by the Appellate Court is confirmed insofar as eviction of the petitioner is concerned. In so far as the fine is concerned the same is reduced to Rs. 1,000/- only. The fine as ordered by the Trial Court and confirmed by the Sessions Court with direction for payment of compensation to the respondent No. 1 consequently is set aside. The amount of fine deposited less the amount of Rs. 1,000/- be returned to the petitioner.
9. The petitioner at this stage seeks stay of the order in order to pursue legal remedies available to him. Considering that the petitioner is an old person and it is difficult to get premises in Bombay the order of this Court insofar as handing over possession of the premises is stayed upto 28th February, 1999. It is made clear that in the event the petitioner wants to move for interim relief in any Special Leave Petition he may file he shall give notice to the respondent No. 1.
In the circumstances of the case each party to bear their own costs.