Dr. Hirak Ghosh vs Tata Iron and Steel Co. Ltd.

H. Suresh J.

By a letter dated June 20, 1968, issued at Jamshedpur, the petitioner was appointed as an assistant medical officer at teh Tata Main Hospital, Jamshedpur, which is run by the Tata Iron and Steel Co. Ltd. The petitioner was given residential quarters by the company. After 17 years of service, on October 3, 1985, by a letter of the same date, issued at Jamshedpur, the services of the petitioner were terminated abruptly. The petitioner has challenged his termination in the Labour Court at Jamshedpur. The said proceedings are pending. In the meanwhile, the company wanted him to vacate the residential quarters. He has refused to do so. In 1986, the company filed an eviction suit in the Munsiff''s Court at Jamshedpur and sought possession and mesne profits. The said suit in the Munsiff''s Court is being contested and is pending.

In the meanwhile, sometime in une, 1988, the company was advised to file a Criminal Case No. 54/S/88 in the court of the Additional Chief Metropolitan Megistrate, 33rd Court, Ballard Pier, Bombay, u/s 630 of the companies Act and section 406 of the Indian Penal Code, when apparently there was no justification for filing such a complaint in Bombay. Nothing has happened in Bombay and nothing has to be done by the petitioner in Bombay, nor is the property situated in Bombay, the sole justification being that the company has its registered office in Bombay. Hence, this petition for quashing the process issued on the ground of want of territorial jurisdiction. But the legal ingenuity with which it is pursued and persisted makes it nothing but an abuse of the process of the court.

Now, for some more details. In the complaint, after setting out the facts relating to the petitioner''s employment and allotment of residential quarters, the company proceeds to set out as to how the petitioner has no right of occupation of the staff quarters as his services have been terminated. I will have a detailed analysis of this complaint done, a little later. But, in the meanwhile, the basis on which the present complaint was filed in the Magistrate''s court finds its place in para 8 of the complaint, which is as follows :

"The complainant states that the premises belong to the complainant- company and the remuneration and emoluments of the officers and employees are also accounted for in the head office of the complainant-company in Bombay along with the assets and liabilities of the company. In short, all accounting of income and losses, assets and liabilities including the remuneration and emoluments of the officers and of the company are maintained in Bombay on the basis of which the balance-sheet and profit and loss accounts are made at Bombay. For the purpose of assessment of assessable income of the company for taxation purposes, accounts are maintained at the head office of the complainant-company. The complainant submits that all accountability within the meaning of section 181(4) of the Criminal Procedure Code arises at Bombay alone."

It is well-settled that the venue of an enquiry or a trial of a case like the present one is primarily to be determined by the averments contained in the complaint (see State of Madhya Pradesh v. K. P. Ghiara AIR 1957 SC 196. But, before any definite finding on the territorial jurisdiction can be given, if the averments are not clear and the facts stated in the complaint are to be proved or disproved, the High Court will not exercise its jurisdiction u/s 482, Criminal Procedure Code, as it is for the learned Magistrate to decide such a question, on evidence.

Mr. Baldota submitted that the company seeks to have filed this case in Bombay, mainly on the basis that the company has its registered office in Bombay and that the files of the company are kept in Bombay and that all accounting of income and lossess, assets and liabilities are done in Bombay and is accountable in Bombay. He submitted that the draftsman of the complaint thinks that the charge of section 406, Indian Penal Code, can be brought home at a place where the accused has to "account for" u/s 181(4), Criminal Procedure Code, meaning thereby where the "account of the accused is maintained by the company". This is what the company says in the complaint. He submitted that the words "accounted for" will have no application to a case of this type, where it is alleged that the accused has not returned the very property which is entrusted to him. He submitted that wherever the allegation is that the propety has not been returned in specie, that would be covered by the words "any part of the property which is the subject of the offence was received or retained, or was required to be returned", as provided u/s 181(4) of the Code of Criminal Procedure. But it is possible, where the property is converted into money or where money is entrusted for a particular purpose and is misappropriated, to say that the words "accounted for " u/s 181(4). Criminal Procedure Code, would apply. That is not the case here.

Mr. Lahiri would not meet the argument of Mr. Baldota straight. The theme of his song is that the question of territorial jurisdiction and also the question of accountability are mixed questions of law and fact, and that, therfore, I cannot intervene u/s 482, Criminal Procedure Code. He cited a number of cases in support of his contention that it is for the trial court to decide all mixed questions of fact and law (see Delhi Municipality v. Ram Pratap Singh, AIR 1976 SC 2301 , Debabrata Gupta Vs. S.K. Ghosh, ; Ramesh Chandra Vs. State of U.P., , and Kanailal Jatia and Others Vs. Ramkrishnadas Gupta, . I have no quarrel with these propositions. But it always depends on the facts of each case.

At the outset, I may say that while it is possible for the company to contend that the withholding of the property or failure to return the property might attract section 630 of the Companies Act, I cannot understand how, having regard to the averments made in the complaint, there can ever be a charge u/s 406 of the Indian Penal Code. In para 3 of the complaint, it is pleaded that the officers and employees are given accommodation and they are entitled to such accommodation only as far as it is part of the conditions of service and as one of the facilities made available to them. Then the complaint in the said para says : "The complainant submits that consequently the right of occupation stands automatically terminated when the relationship between the company and the officer/employee concerned comes to an end, that is, when his service with the company is terminated or he is retired from the services of the company. The complainant submits that all the properties in question regard-less of where they are situate, vest in the company which is a juridical person and which is functioning from its registered office at Bombay." In para 4 of the complaint, what is pleaded is that the accused was only a licensee, and the relevant portion is as follows : "The complainant submits that the accused was no more than a licensee of the said premises at the direction and will of the company for a period of time coterminous with his services with the company on a nominal payment of Rs. 17 per mensem." In para 5 of the complaint, it is stated that the entrustment was for a specific purpose and for a specified prescribed period and that the accused had dominion over the property and was never permitted to convert the same to his own use. In para 6 of the complaint, the company to deliver vacant and peaceful possession of the said premises. Since the accused did not comply with the same , the company submits that "the accused with dishonest intention, wrongfully withheld the possession of the said premises and thereby wrongfully deprived the company of the use of the premises for its ohter working employees reulting in loss of money in the form of allowing house rent allowance to other employees entitled to the said premises." Needless to say, if these submissions are carried to its logical end, in every case of leave and licence or in every case of service occupantc, if the occupant does not vacate, but asserts a right, it becomes a criminal breach of trust. I am pointing this out only to show that these submissions are as absurd as what has been submitted in para 8 of the complaint. Realising that the substance of the company''s case is withholding possession of the premises for which the court in Bombay would have had no jurisdiction, the draftsman had to necessrily, but artificially, plead what is et out in para 8 of the complaint. If what is pleaded therein is accepted as true, there is not even a plea that the accused has to account for withholding the premises, in Bombay. What is pleaded is the company''s liability to account form in Bombay. But there is nothing that accused has to account for, in Bombay, When I asked Mr. Lahiri whether there is no difference between the words "retained" or "required to be returned" and the words "accounted for " as appearing in section 181(4), Criminal Procedure Code, he would not answer the same. The only answer is that accountability is a question of fact and the learned Magistrate will decide the same.

Mr. Lahiri referred to the objects and reasons of the amended provision of section 181(4) of the Code of Criminal Procedure, the relevant portion of which is as follows :

"(i) The Law Commission in its forty-first report had commented thus on section 18192) corresponding to this provision : ''15.15. As defined in section 405, Indian Penal Code, the offence of breach of trust may be one of two types ... The place of commission of the offence in the first type is the place where the accused dishonestly misappropriated the property or converted it to his use, and in th second type it is the place where he dishonestly used or disposed of the property in violation of the law or contract. Doubt exists in many cases as to the exact manner, point of time and place where the dishonest misapporpriation, conversion, use of disposal was effected. Since, these matters are within the special knowledge of the accused, the complainant is unable to adopt the jurisdiction within which the offence has been committed. Though no such doubts ordinarily arise in regard to th place or places where the property in question ws received or retained by the accused, these places are not always suitable for launching the prosecution....The question has, accodingly, arisen in a number of reported cases whether these offences can be inquired into or tried by a court within whose jurisdiction the accused was bound, by law or contract, to render accounts or to return the entrusted property but failed to discharge the obligation....15.24. In view of the conflicting decisions of various High Courts, we recommend that sub-section (2) of section 181 (now sub-section(4)) be amended thus - (same as sub-section(4)). We do not think it necessary to limit the additional alternative venue, namely, the local area where the property was required (by law or contrant) to be returned or accounted for by the accused person, to cases where there is no evidence of the offence ohter than the failure to return or account for the property."

I do not understand how this would help the company in the present case. There is no plea in the present case that the residential quarters are required, by law or contract, to be returned or accounted for the propert. In the present case, the withholding or retaining of the property itself is evidence of the offence. This has taken place at Jamshedpur. It is there where the property has been retained. When that is so, there is no question of the accused becoming liable to "account for" in section 181(4), Criminal Procedure Code, would apply only where there is no evidence of the offence other than failure to return or accounted for the property in any local area, so as to invoke the jurisdiction of the courts in that area. Any other interpretation would suffer from the vice of tautology rendering teh words used in the statute redundant.

The initial inspiration for the draftsman of the complaint must have come from judgment of a single judge of the Calcutta High Court in the case of T. S. Satyanath v. J. Thomas and Co. [1985] 57 Com Cas 648. In that case, in a similar situation, while the premises were in Cochin, a case u/s 630(1)(b) of the Companies Act, was filed in Calcutta. When the accused filed a petition u/s 482, Criminal Procedure Code, for quashing the proceedings on the ground of want of territorial jurisdiction, as also on anohter ground, it was argued across the Bar, on behalf of the complainant company that the accused could have delivered possession by sending a note posted at Calcutta or that the he could have delivered possession by sending a note posted at Calcutta or that he could perhaps send the key of the property to the head office at Calcutta . The learned judge, however, does not decide any to these questions, but he leaves this question open, granting liberty to the petitioner to reagitate these points after evidence has been adduced at the trial. Therefore, this case is no authority for determining the question of jurisdiction within the meaning of section 181(4), Criminal Procedure Code. Mr. Lahiri, however, being the same line as counsel for the company in the above case did, submitted that the complainant can deman that the property be given to the company in Bombay, though he could not spell out whether that could be done by sending the key or a note. Again, why should it be in Bombay ? Mr. Lahiri says that it is because the company can receive its property only at its registered office ? Why not Kashmir ? Why not kanyakumari ? Therfore, the company can as well deman at any provision of law, common sense and not suitable subterfuges which have the effect of subverting a judicial process, should be the guiding factor. The essence of the offence both u/s 630(1)(b) of the Companies Act, and u/s 406 of the Indian Penal Code, is the wrongful withholding or retention of the property. The offence is complete when such retention takes place. It is at Jamshedpur where the retention has taken place and it is but natural that the case be filed at Jamshedpur.

Mr. Bhonsale submitted that u/s 179, Criminal Procedure Code, when an act is an offence by reason of anything which has been done and of a consequence within whose local jurisdiction such thing has been done or such consequence has ensued. What is the consequence here ? There is no answer. Mr. Bhonsale submitted that the company has suffered loss in Bombay, consequent upon the accused having refused to vacate, as the company is unable to accommodate their other employees who have to be accommodated on the accused vacating the residential quarter and that those employees who are in the waiting list will have to be given their allowances for accommodation. Mr. Bhonsale submitted that the accounts of such employees have been maintained in Bombay. THerfore, the consequences can be said to have ensued in Bombay and that, therfore, this court has jurisdiction to entertain such a case. I am afraid that this involved argument can have no basis for invoking the jurisdiction u/s 179, Criminal Procedure Code. In fact, the company has lost sight of the fact that the company has itself filed a suit in the Munsiff''s court at Jamshedpur and apart from asking for possession in that suit, the company has also asked for mense profits in that suit. The company can as well claim further damages if the same has any nexus to the accused retaining the prmises. But how does that become a criminal offence ? In fact, the following passages from the Full Bench judgement of our own High Court Jivandas v. Savchand, In re [1931] 32 CLJ 331 : AIR 1930 Bom 490 will be a complete answer to what Mr. Bhonsale has been contending. The facts are somewhat identical to the facts of the case before me, in so far as it relates to the question of jurisdiction. The learned Chief Justice Beaumont, while explaining the scope of section 176, Criminal Procedure Code, says (at page 492 of AIR) :

"What it provides is that when a person is accused of the commission of any offence by reason of two things, by reason first of anything which has been done, and, secondly, of any consequence which has ensued, then jurisdiction is conferred on the court where the act has been done or the consequence has ensued. But, the offence must be charged by reason of those two things, the act done and the consequence which ensued. If that is so, the consequence is necessarily part of the offence. It does not matter whether you say, as others of the courts have said, that it is a necessary ingredient of the offence, the point is that the consequence has ensued. When you look at the illustrations, they sho clearly the meaning of the section. Take the firs illustrations, they show clearly the meaning of the section. Take the fires illustration. A is wounded within the local limits of the juridiction of court,X, and dies within the local limits of the jurisdiction of court Z. The offence of capable homicide of A may be inquired into or tried by X or Z. In that case, the offence charged is capable homicide. The mere act done of wounding is not by itself enough to constitute a charge of culpable homicide. I t may, no doubt, be a ground for another charge, but that is immaterial. It does not constitute a charge of culpable homicide, unless it is followed by the consequence of death. So that, taking section 179 alone and reading it without the help of any authority, I should have thought it was plain that the consequence referred to is a consequence which forms part of the offence, and a consequence which does not from part of the offence, does not attract jurisdiction u/s 179."

Again at page 493 :

"What is the natural and grammatical meaning of the word ''consequence ?'' per se ; the question is : What is the natural and grammatical meaning of the word ''consequence'' in the context in which it appears in section 179 ? and as I have already pointed out, in my view, having regard to the context there, the consequence is to be part of the offence."

Thereafter, dealing with the contention that the accused is to render accounts in Bombay, the learned Chief Justice says (at page 494) :

"I can see nothing in section 405, Indian Penal code, to justify the contention that when a man in Rangoon delivers false accounts in Bombay, he is thereby making a dishonest use in Bombay of money of property which has never left Rangoon. If the principle contended for is sound, it might have in his hands moneys belonging to thousands of customers of clients, and he may deliver false accounts to those customers or clients in a hundred different towns in which he has delivered false accounts. That would be a very serious inroad upon the general provision of section 177 which requires offences to be tried by a court within the local limits of whose jurisdiction they were committed. I think that the general provision is one which is found on considerations of principle and expediency, and that courts ought not to be astute om finding reason for assuming jurisdiction to deal with crimes committed outside their jurisdiction."

Again at page 494 :

"Now, the accounts were really falsified by the accused in Ragoon, but Mr. Velinkar says that the false accounts were sent from Rangoon to the head office in Bombay with the intention that they would be, and in effect that they were, written into the accounts at the head office, and therfore, the falsification of the accounts in Rangoon and the sending of them to Bombay with th intention that they should be used to falsify the accounts in Bombay amount itself to a falsification of accounts in Bombay, and for that proposition he relies on the English case, Rex v. Oliphant [1905] 2 KB 67 : 74 LJKB 591: 21 Cox. C. C. 192 2 TLR 416 ; 53 :R 556 ; 94 LT 824 ; 69 JP 230. That was a case which turned on the construction of an English Act, and can be no authority on the construction of the Criminal Procedure Code ; but, apart from that I do not find in the complaint any allegation that the accounts were falsified in Rangoon for the purpose of procuring a falsification of the accounts in Bombay, i.e., that the accounts in Bombay were flasified. That being so, I think that that point also is not open to the complainant."

The other two learned judges Madgavkar J. and Baker J. agree with the learned Chief Justice when they sey that where the consequential loss is not a part of that offence, section 179 has no application, but rather section 177 and section 181, sub-section (2),and, of course, presently section 181, sub-section(4).

Mr. Bhonsale also argued that wrongful loss is also a matter of evidence and I should not exercise my discretion u/s 482, Criminal Procedure Code. But surprisingly Mr. Bhonsale also sought to invoke section 462, Criminal Procedure Code, to submit that no finding, sentence or order of any criminal court shall be set aside merely on the ground that the inquiry, trial or other proceedings in the course of which it was arrived at or passed, took place in wrong sessions division, district, sub-division or other local area, unless it appears that such error has, in fact, occasioned a failure of justice. This is a strange argument. In one breath, they say that the question of territorial jurisdiction should not be decided now. At the same time, in the other breath, they say that even if the court has no territorial jurisdiction (sic), do not set aside the order unless it has resulted in injustice. I wonder whether section 462, Criminal Procedure Code, can be invoked in the present case. In my view, the very act of filing of the complaint against the petitioner-accused, when no offence whatsoever has taken place within Bombay, in a court which has no jurisdiction whatsoever and then have the process issued itself, is nothing but judicial oppression which cannot be obviated by resorting to section 462, Criminal Procedure Code.

Mr. Bhonsale relied on th case of Smt. Raj Kumari Vijh Vs. Dev Raj Vijh, , to show that there are two types of jurisdiction of a criminal court, namely, (1) the jurisdiction with respect to the power of the court to try particular kinds of offences, and 92) its territorial jurisdiction. While the former goes to the root of the matter and any transgression of it makes the entire trial void, the latter is not of a peremptory character and curable u/s 531 (equivalent to section 462, Criminal Procedure Code.)

I need not deal with this authority, as , in my view, this authority does not lay down the proposition that whatever be the offence and wherever it might be committed, the complainant can choose a court of his choice and summon the accused to that court, and take shelter u/s 462. Ordinarily, if the court lacks inherent jurisdiction to try an offence, the entire proceedings become null and void. But, otherwise, if the court, has power to try an offenc, it may not be possible to set aside it sorders, unless the accused can show that it has resulted in injustice. But, that does not mean that the complainant can choose, with impunity, a court of his choice and drag the accused to that court, and, in the present case, all on the basis of a specious plea that the company has its registered office, in Bombay. The plea of want of territorial jurisdiction has been taken at the very beginning of the case and in such a case, it becomes th duty of the court to go into this question, as continuance of the proceedings any further, if the court has no jurisdiction whatsoever itself, becomes an abuse of the process of the court.

In the reult, I pass the following order :

Order

I quash the process issued in Case NO. 54/S of 1988, now pending in the Court of the Additional Chief Metropolitan Magistrate, 33rd Court, Ballard Pier, Bombay.

Rule is made absolute accordingly.