JUDGMENT
V.B. Bansal J.
1. Mr. Ramesh G. Bhatia, petitioner, has by way of this petition under article 227 of the Constitution of India, read with section 482 of the Code of Criminal Procedure, prayed that the proceedings against him pending in the court of the Additional Chief Metropolitan Magistrate, Delhi, in complaint Gopal Gases (P.) Ltd. v. Ramesh G. Bhatia under section 630 of the Companies Act may be quashed.
2. The material facts necessary for the disposal if this petition contained in the aforesaid complaint are as under :
The complainant is a private limited company with its registered office at 38, Rajendra Park, Pusa Road, New Delhi, and Panna Lal Bhatia, one of the directors was authorised by the company to file the said complaint. Ramesh G. Bhatia, the accused, has been one of the directors if this company. This company was incorporated on February 26, 1990, with the object to produce gases like oxygen, acetylene, liquid oxygen, etc., and the factory is situated at Mandi Govind Garh at Punjab. The petitioner was required to involve in the day-to-day working of this factory and so was appointed as supervisor. He was made in charge of the factory and the whole work of this factory was running under his supervision. All the books of account were required to be kept in the factory premises and were not required to be removed from there. It has further been alleged that the petitioner-accused taking advantage of his physical presence at Mandi Govind Garh removed books of account, machinery parts and gas cylinders valued at Rs. 30,00,000 from the factory premises without having any authority. It has also been alleged that the accused-petitioner had withdrawn huge amounts from the company accounts and in this way he has committed an offence under section 630 of the Companies Act.
3. I have heard Shri Daljit Singh, learned counsel for the petitioner and Shri K. K. Jain, learned counsel for respondent No. 2. I have also carefully gone through the records.
4. Learned counsel for the petitioner has submitted that merely because the head office of the company is situated at Delhi, it cannot be considered to be a ground vesting jurisdiction in Delhi courts to try the complaint under section 630 of the Companies Act, against the petitioner. He has also submitted that as per the case of the complainant, the records of machinery parts and the accounts were maintained at Mandi Govind Garh which were removed by the petitioner unauthorisedly from the factory premises and in this way the cause of action having arisen at Mandi Govind Garh, the courts at that place alone could have the jurisdiction to try this complaint. It has, thus, been submitted that the Court of the Additional Chief Metropolitan Magistrate, Delhi, had no jurisdiction to take cognizance of this complaint and, thus, a prayer has been made that the same may be quashed.
5. Learned counsel for respondent No. 2 has, on the other hand, submitted that admittedly the head office of the company is situated at Delhi and all the accounts and other matters of the company are required to be controlled and handled at Delhi. He has, thus submitted that the relevant provisions applicable in the instant case would be section 181(4) of the Code of Criminal Procedure. It has, thus been submitted that the Additional Chief Metropolitan Magistrate has rightly taken cognizance of the complaint and it cannot be said that the courts at Delhi have no jurisdiction. Prayer has been made that the petition be dismissed.
6. Before considering these submissions, it would be appropriate at this stage to refer to the relevant following provisions :
Section 4 of the Code of Criminal Procedure, is as under :
“Trial of offences under the Indian Penal Code and other laws. –
(1) All offences under the Indian Penal Code (45 of 1860) shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained.
(2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences.”
“177. Ordinary place of inquiry and trial. – Every offence shall ordinarily be inquired into and tried by a court within whose local jurisdiction it was committed.”
“179. Offence friable where act is done or consequence ensues. – When an act is an offence by reason of anything which has been done and of a consequence which has ensued, the offence may be inquired into or tried by a court within whose local jurisdiction such thing has been done or such consequence has ensued.”
“181. Place of trial in case of certain offences. – … (4) Any offence of criminal misappropriation or of criminal breach of trust may be inquired into or tried by a court within whose local jurisdiction the offence was committed or any part of the property which is the subject of the offence was received or retained or was required to be returned or accounted for, by the accused person.”
Section 2(11) of the Companies Act defines the court as under :
“the court means –
(a) with respect to any matter relating to a company (other than any offence against against this Act), the court having jurisdiction under this Act with respect to that matter relating to the company, as provided in section 10;
(b) with respect to any offence against this Act, the Court of a Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having jurisdiction to try such offence;”
Section 10 of the Companies Act is as under :
“10. Jurisdiction of courts. – (1) The court having jurisdiction under this Act shall be –
(a) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any District Court or District Courts subordinate to the High Court in pursuance of sub-section (2); and
(b) where jurisdiction has been so conferred, the District Court in regard to matters falling within the scope of the jurisdiction conferred, in respect of companies having their registered offices in the District.”
Section 621 of the Companies Act provided that :
“621. Offences against Act to be cognizable only on complaint by Registrar, Shareholder or Government. – (1) No court shall take cognizance of any offence against this Act (other than an offence with respect to which proceedings are instituted under section 545), which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of (the Registrar, or of a shareholder of the company) or of person authorised by the Central Government in that behalf :
Provided that nothing in this sub-section shall apply to a prosecution by a company of any of its officers.”
“630. Penalty for wrongful 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 with-holds it or knowingly applies it to purposes 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.”
7. From a perusal of the provisions of the Companies Act (hereinafter called “the Act”), referred to above it is clear that the High Court has jurisdiction except to the extent to which jurisdiction has been conferred on any district court subordinate to the High Court for dealing with the matters under the Act. No procedure has, thus, been provided under the Companies Act for trial of an offence by a criminal court. In these circumstances, the provisions of the Code of Criminal Procedure have to govern the matters relating to the place of trial for an offence under section 630 of the Act. Thus the place of jurisdiction for an offence under section 630 of the Act shall be decided with reference to the provisions contained in Chapter 13 of the Code of Criminal Procedure. The basic principle as contained in section 177 of the Code of Criminal Procedure is that every offence shall ordinarily be inquired into and tried by a court within whose jurisdiction it was committed. It is the admitted case of respondent No. 2 that the books of account, machinery and the management of its factory were to be looked after by the petitioner at Mandi Govind Garh, the place where its factory is situated. According to the allegations contained in the complaint, the petitioner has removed the books of account, machinery and the gas cylinders from the premises of the company and he has also withdrawn cash from the account of the company besides getting the amount of the company received from others credited in his own account. It is, thus, clear that all these acts having been done by the petitioner at Mandi Govind Garh the courts at the place would have the jurisdiction. A perusal of the complaint indicates that the only ground urged about the courts of Delhi having jurisdiction is the location of the registered office of the company at 38, Rajindra Park, New Delhi.
8. Submission of learned counsel for respondent No. 2 has been that the petitioner has to render the accounts at Delhi, the place where the head office of the company is situated and in view of the provisions contained in section 188(4) the courts at Delhi have jurisdiction. I have given my due consideration to this submission but have not been able to persuade myself to agree with the same. The offence under section 630(1) of the Act is complete the moment a person in possession wrongfully withholds or wrongfully applies it to a purpose other than expressed or directed in the articles and otherwise authorised by the company. As per the allegations in the complaint the petitioner has acted against the directions of the company and removed the books of account and the machinery and the utilised of the amount of the company for his own use. In these circumstances, I have no hesitation in coming to the conclusion that accountability is not an ingredient for the commission of the offence under section 630(1) of the Act. It is not open to learned counsel for respondent No. 2 to urge that the Magistrate having jurisdiction at Mandi Govind Garh while trying the offence under section 630(1) cannot order the delivery of the aforesaid articles to the company. Merely because such an order could be passed by the Delhi courts would not be sufficient to confer jurisdiction on the courts at Delhi even for trial of an offence under section 630 when the cause of action has arisen at Mandi Govind Garh.
9. It would be appropriate at this stage to refer to the case State v. Dhulaji Bavaji, . In the said case, the appellant was found lying on a public road in a state of intoxication. He was not in a position to take care of himself and the medical report and other tests confirmed that he had taken liquor. He was charged with the offence under sections 85(1) and 66(1)(b) of the Bombay Prohibition Act, 1949. The trial Magistrate came to the conclusion that the accused was found in an intoxicated state on the public road and was not liable to be convicted under section 85(1)(i) or section 85(1)(iii). He also came to the conclusion that the prosecution had failed to establish that the accused had taken liquor at a place within the jurisdiction of his court. So the accused was not convicted in respect of the offence under section 66(1)(b) of the said Act.
10. In order to prove the commission of an offence under section 66(1)(b) it was incumbent on the prosecution to prove that the accused had consumed the liquor within the area under the jurisdiction of the trial court and it was not sufficient to prove that the accused was found having already consumed the liquor. The mere fact that a person was found intoxicated at a place would not be sufficient to raise a presumption that liquor was consumed at that very place when there is no provision for raising such a presumption. Dealing with sections 177 and 179 of the Code of Criminal Procedure it was observed that if the offence is complete in itself by reason of the act having been done and the consequence a mere result of it not essential for the commission of offence then section 179 cannot apply. The High Court, thus, convicted the appellant under section 85 since he was found on a public road under intoxication and unable to take care of himself. He was, however, not convicted of the offence under section 66(1)(b) since the prosecution was not able to prove that the appellant had consumed the liquor in the jurisdiction of the trial court. This judgment, thus, clearly indicates that if the offence is complete in itself by reason of an act having been done the consequence is a mere result of it not essential for the completion of the offence. The offence under section 630 of the Act is complete the moment property is removed and the question about the return of the property to the company is an independent act not connected with the ingredients of the offence aforesaid.
11. Reliance was placed by learned counsel for the respondent on the case of Madho Surendra Sahai v. Gobardhan Lal, AIR 1933 Oudh 215. This judgment in my view is not of any help in the instant case. In the said case it was held that where a bogus cheque is drawn at a place on a bank at another place, where the drawee incurs loss owing to the cheque being dishonoured the courts at the place where the loss is incurred would have jurisdiction to try the case even though the offence of cheating is complete at the place where the cheque is drawn, since the loss at the place by the drawee of that place is an inevitable and necessary consequence of the bogus cheque. In the instant case, the offence already having been completed there was no question of any consequence so as to confer jurisdiction on the courts at Delhi.
12. A reference has also been made to the case of Hanuman Prasad Gupta v. Hiralal [1970] 40 Comp Case 1058 (SC) to indicate that the courts at Delhi would have the jurisdiction since the accounts of the company will have to be settled at Delhi, the place where the office of the company is situated. It was a case relating to the payment of dividend to shareholders by the company. A complaint was filed by the complainant against the director-in-charge of Iron Traders (P.) Ltd. in the court of a Magistrate at Meerut. The allegations made in the complaint were that the dividend declared by the company had not been paid to him within the prescribed period. It was held that under section 207 of the Act, the offence is committed when the dividend is either not paid or the cheque or warrant in respect thereof has not been posted within the time prescribed therefore and that once the dividend warrant is posted at the registered address of the shareholder dividend is deemed to have been paid. It was held that the section makes the failure to post within the prescribed period and not the non-receipt of the warrant by the shareholder an offence and that since the obligation to post the warrant arose at the registered office of the company, failure to discharge the obligation also arose at the registered office of the company and, thus, the Magistrate at Meerut had no jurisdiction to try the complaint. It was, thus, a separate offence and this judgment cannot be of any help to respondent No. 2. Similarly the case Upendra Kumar Joshi v. Manik Lal Chatterjee [1982] 52 Comp Case 177 (Pat), cannot be of any help in this case since it relates to the offence of non-payment of dividend to a shareholder. It was held that such an offence is committed at the place of the company’s registered office and not where the dividend or warrant was to be sent.
13. Reliance has also been placed on the case of T. S. Satyanath v. J. Thomas and Co. [1985] 57 Comp Case 648 (Cal). This case related to a complaint under section 630(1)(b) of the Companies Act, filed against the petitioner by J. Thomas and Co. (P.) Ltd. having its head office at Calcutta.
14. The petitioner was occupying premises No. 181, Fort Road, Cochin. He was the managing director of this company but subsequently his services were engaged as an advisor. He was allowed to remain in possession of the premises at Cochin during the period he was working as an advisor. After the termination of his services, the petitioner failed to hand over possession to the company and so a complaint was filed in the courts at Calcutta. There was an objection by the petitioner that the courts at Calcutta has no jurisdiction since the property was located at Cochin and so the petition was filed in the High Court thereby challenging the cognizance of the case by the Metropolitan Magistrate at Calcutta of the complaint against the petitioner. It was held that the petitioner was appointed as an adviser by a letter from the head office and was in correspondence with the company in this regard at Calcutta. It was further held that the petitioner could hand over the possession of the premises to the company at Calcutta even by handing over key at that place. It was held that such an offence was to be tried by the court within whose local jurisdiction the offence was committed and that was ordinarily meant except as otherwise provided in the Criminal Procedure Code. It was observed that merely because the petitioner was put to inconvenience caused by filing of a complaint at Calcutta when he was residing at Cochin, could not be a ground which was insurmountable so as to debar the Metropolitan Magistrate at Calcutta from taking cognizance.
15. The complaint filed by respondent No. 2 against the petitioner in the Court of the Additional Chief Metropolitan Magistrate does not disclose any material to the effect that any act was committed by the petitioner within its jurisdiction and the mere fact of the head office being situated within its jurisdiction does not give jurisdiction to the said court to proceed further with the complaint. The return of the property was not an ingredient of the offence under section 630 of the Act. Jurisdiction about the return of the property vests with the High Courts as provided under section 10 of the Act.
16. In these circumstances, the complaint, Gopal Gases Pvt. Ltd., having its registered office at 38, Rajendra Park, Pusa Road, New Delhi, through its director, Panna Lal Bhatia v. Shri Ramesh G. Bhatia, under section 630 of the Companies Act, pending in the Court of the Additional Chief Metropolitan Magistrate, stands quashed.
