JAGDISH CHANDRA NIJHAWAN Vs. S K SARAF

JUDGEMENT

(1.) This appeal arises out of the judgment and order passed by the High Court of Calcutta allowing Criminal Revision No. 624 of 1986 and setting aside the order of discharge passed by the Court of Judicial Magistrate, Alipur, in Criminal Case No. C/194/1985. The learned Magistrate had discharged the appellant on the ground that the complaint filed by the respondent and the material-on-record disclose that the dispute is really of a civil nature.

(2.) Sometime before 29-4-1983, the appellant retired as a Chairman and Managing Director of Andrew Yule and Co. Ltd. ABC Products Ltd. (for short 'ABC') desired to employ him as its President and put him in overall charge of management. It, therefore, entered into an agreement with the appellant on 29-4-1983 and appointed him as the President. Under the agreement, the appellant was to be provided with rent-free furnished flat described in the Schedule to that agreement. ABC Consultants (P) Ltd., stated to be a sister concern of ABC, was the lessee of that flat. As the ABC wanted to employ the appellant as President, it requested ABC Consultants (P) Ltd. to grant to it and the appellant permission to use and occupy the said flat. On 29th April, 1983 ABC Consultants (P) Ltd. granted that permission with a condition that the appellant was allowed to use it till he remained with ABC. The appellant joined ABC on 16-5-1983 and was put in possession of the said flat. On 1-11-1983, ABC passed a Resolution appointing the appellant as Managing Director of the Company. The terms and conditions of appointment were as mentioned in the draft agreement prepared in that behalf. The appellant's term under the said draft agreement was for a period of 5 years from 1-11-1983. On 21-1-1985, the Company Law Board approved the appointment of the appellant as Managing Director not for the full term of 5 years but for 11 months only. The decision of the Company Law Board was communicated to the appellant on 5-2-1985. On 11-3-1985 he was again informed by ABC that in view of further limited extension of his term by the Company Law Board, he is treated as having ceased to be the Managing Director of the Company w.e.f. 1-10-1984 and as his employment thus stood terminated, he was called upon to hand over possession of the flat to it. As the appellant did not comply with the request, ABC lodged a complaint on 12-7-1985 through its Commercial Manager - Mr. Saraf - against the appellant for offences punishable under Section 630 of the Companies Act and Sections 406, 408 and 409 of the Indian Penal Code. ABC also filed a suit on 9-12-1985 against the appellant for recovery of possession of the flat. On 6-1-1986 the learned Magistrate discharged the appellant holding that the dispute between the parties is of a civil nature. It was against that order that ABC filed a revision petition before the High Court.

(3.) The High Court held that the material- on-record discloses a prima facie case under Section 630 of the Companies Act and, therefore, the learned Magistrate acted illegally in discharging the accused. As regards the charge under Sections 408 and 409, IPC, the High Court was of the view that prima facie the Company has not made out any case of criminal misappropriation or criminal breach of trust, warranting framing of a charge under Sections 406, 408 and 409, IPC. With this observation, it has left that question open for consideration by the learned Magistrate. Taking this view, the High Court allowed the revision application, quashed the order of discharge and remanded the case back to the learned Magistrate for disposal in accordance with law.