G RANGASWAMY Vs. COIMBATORE PIONEER MILLS THE JOINT STOCK COMPANY REGISTERED UNDER THE COMPANIES ACT AND HAVING REGISTERED OFFICE AT NO 1 PIONEER MILL ROAD PEELAMEDU COIMBATORE

JUDGEMENT

(1.) THE revision petitioner has suffered an order under section 630 of the Companies Act in S.T.C.No.594 of 1995 on the file of learned Judicial Magistrate No.6, Coimbatore, which was affirmed in C.A.No.96 of 1996 on the file of the Principal Sessions Judge, Coimbatore. That order came to be passed on a complaint filed under section 630 of the Companies Act by the respondent herein. Heard Mr.T.R.Rajagopalan learned senior counsel appearing for the revision petitioner and Mr.V.Gopinath learned senior counsel appearing for the respondent. (1) THE following are the five items mentioned in the said complaint, which according to the complainant, the accused was wrongfully holding. FUGI Automatic Gas Analyser (2) Compaq Note Book Computer Sl.No.7326HG 54819 (3) ORTEM Computer LX 05 PC with built-in-software Sl.No.A03135 (4) Hindustan Contessa Car bearing Regn.No.PY 01B 7155 with tools and Registration Certificate (5) Diesel Generator of 62.5 KVA Kirloskar make with Alternator and Standard Panel Board, Fuel Tank & with accessories. THEre is no dispute that these five items of properties described in the schedule to the plaint belong to the company called "Coimbatore Pioneer Mills Limited" which is a public limited company. It is also not in dispute that the revision petitioner was one of the two Managing Directors of that company and he ceased to be the Managing Director with effect from 01.10.1994. THE complainant company is represented by the Chairman Cum Managing Director of the said Coimbatore Pioneer Mills Limited. THE defence to the claim was that the accused neither wrongfully obtained possession of the property of the complainant company nor is he wrongfully withholding any property of the company. In sustaining this defence, the accused projected primarily two documents namely, Exs.D.1 and D.2. THE Chairman Cum Managing Director of the complainant company examined himself as P.W.1, besides marking Exs.P.1 to P.10 on his side. THE accused examined himself as D.W.1 and examined another witness on his side as D.W.2. Exs.D.1 and D.2 had come to be marked on his side. Among the documents filed on behalf of both the sides before the court below, in my considered opinion, three documents alone need be looked into at this stage, besides the oral evidence, to decide whether the order under challenge could be sustained or not. THEy are: Ex.P.9 dated 29.09.1994 Ex.D.1 dated 12.07.1994 and Ex.D.2 dated 15.03.1995 Ex.P.9 is an agreement entered into between Coimbatore Pioneer Mills Limited represented by it's Managing Director and Chandra Textiles Limited, a company registered under the Companies Act, represented by it's Managing Director. Ex.D.1 is the Memorandum of Understanding signed by One Devarajan on the one hand and Rangaswamy on the other hand. Ex.D.2 is the proceedings of an arbitrator.

(2.) MR.T.R.Rajagopalan learned senior counsel submitted that on the basis of these three documents, there is definitely a bona fide dispute of a civil nature between the parties concerned and when one such dispute is shown to exist, then the Magistrate would have no jurisdiction at all to decide the righteousness in the same. In other words, according to the learned senior counsel, once a bona fide dispute of a civil nature is shown to exist between the parties, then the civil court would be the most appropriate forum and no remedy is available under section 630 of the Companies Act. MR.V.Gopinath learned senior counsel opposing the above arguments would contend that Ex.D.1 is not binding on the parties to the complaint, because the company namely, Coimbatore Pioneer Mills Limited and Chandra Textiles Limited are not parties to it. According to the learned senior counsel, if a company is to be bound by any action of it with reference to it's property, then the company must be represented in those proceedings. Inasmuch as the company is not a party to Ex.D.1, the learned senior counsel would contend that Ex.D.1 cannot be pressed into service at all to defeat the very object of section 630 of the Companies Act. As far as Ex.D.2 is concerned, it is the contention of the learned senior counsel for the complainant that inasmuch as the said document had not reached it's finality by both parties affixing their signature of acceptance, it cannot be admitted in evidence as a binding document between the parties to it.

(3.) AS far as the car mentioned as Item No.4 at the foot of the complaint is concerned, there is some reference to it in Ex.D.2. But as contended by Mr.V.Gopinath learned senior counsel, it is true that Ex.D.2 had not seen the light of the day. But however, I am referring to the terms of Ex.D.2, only to find out whether the possession of the car by the accused is wrongful or it is in bona fide exercise of his rights. When the parties to the complaint were at logger heads, the Memorandum of Understanding was brought into existence. Clause 20 of the Memorandum of Understanding contains the following: