Vinod K. Sharma, J. - (1.) THE petitioners seek quashing of the complaint dated February 14, 2006, annexure PI, filed under Section 630 of the Companies Act, 1956 (for short "the Act") and the summoning order dated February 15, 2006, passed by the learned Judicial Magistrate First Class, Ludhiana, annexure P2, and all consequential proceedings arising therefrom in the interest of justice, equity and fair play.
(2.) ON the complaint filed by the Ludhiana Colonizers P. Ltd., a company registered under the Act, learned Judicial Magistrate First Class, Ludhiana has been pleased to summon the petitioners under Section 630 of the Act by passing the following order: 1. The complainant Ludhiana Colonizers P. Ltd., through its director C.L. Chandok and Vimal Kumar have filed this complaint under Section 630 of the Companies Act suing Aradhana Gupta and Smt. Veena Yadav on the allegations that the complainant is a duly incorporated company. The complainants C.L. Chandok and Vimal Kumar are its directors. Accused Nos. 1 and 2 were taken as directors of the complainant company on March 15, 2004. Accused No. 1 continued to be director of the company while accused No. 2 ceased to be its director because she was not holding qualified share in the company and as such she is an ex -director of the company. The complainant company held its annual general meeting (AGM) on September 6, 2004, which was presided over by accused No. 1. At the time when the record of company and its property was under the control and possession of both the accused, who conducted annual general meeting and filed the annual report along with the audited accounts of the company with the Registrar of Companies after filing of the statutory documents, both the accused retained the record of the society as well as the movable and immovable properties and despite repeated demands by its board of directors, they have failed to hand over the record of the company and are illegally withholding the property of the company, which amounts to wrongful retention of property of the complainant company punishable under Section 630(1)(a) of the Companies Act, 1956. Hence, the present complaint. 2. For the purpose of summoning the accused, the complainant C.L. Chandok himself appeared and submitted this affidavit exhibit PA in which he reiterated the contents of his complaint and closed his evidence. I have heard learned Counsel for the complainant and have, also gone through the evidence on record, which remains unrebutted, perusal of the memorandum and articles of association exhibit P2 makes out that accused No. 2 was also one of the directors of the company but as she was not holding the qualified shares as required under Section 283 of the Companies Act hence, she ceased to be a director of the company but, nevertheless, at the time of holding the annual general meeting on September 6, 2004, both the accused conducted its proceedings. Perusal of the balance -sheet dated March 31, 2002, exhibit P7 confirms that it was filed by the complainant company under the signatures of both the accused on July 26, 2004. Similarly, statement of fixed assets exhibit P8 and notes forming part of the account for the year ending March 31, 2004, exhibit P9 and auditor report dated July 26, 2004, exhibit P10 and photo copy of the annual return exhibit P12 makes out that both accused were running the affairs of the company and as per unrebutted evidence led by the complainant, after conducting proceedings of the annual general meeting on September 6, 2004, they filed the annual report along with audited accounts with the Registrar of Companies but afterwards they failed to return the record of the society as well as its property to its board of directors. As per Section 630(i)(a)(b) it is an offence to wrongfully obtain possession of the property of the company. It is also an offence to withhold the property of the company once it comes into possession of any officer or employee of the company Section 2(30) defines "officer" to include any director, etc., also Hon 'ble apex court in Employees' State Insurance Corporation v. Apex Engineering P. Ltd. reported in : [1998] 1 SCC 86, has laid down that a managing director of an incorporated company, who had been entrusted by its board of directors with specified functions for a specified annual remuneration was an employee and not the principal employer in another such judgment in Lalita Jalan v. Bombay Gas Co. Ltd. reported in : [2003] 114 Comp Cas 515 : [2003] 6 SCC 107, the Hon 'ble Supreme Court of India has laid down that retaining the flat of company by legal heirs of its director comes within the mischief of Section 630 as such as despite demand, accused have retained the property of the complainant company, which include its record and movable and immovable property, hence, they are liable to be penalised under Section 630 of the Companies Act. A prima facie case is made out to summon both accused to face the present trial under the said section. 3. The petitioners seek quashing of the complaint, summoning order and subsequent proceedings on the ground that the complaint filed is in violation of the provisions of Section 630 of the Act as under the said provisions the complaint can only be filed by the company or any creditor or contributory. The contention of Shri Anand Chhibbar, learned Counsel appearing on behalf of the petitioners is that the complaint on behalf of the company can only be filed if there is a resolution passed in favour of the person by the board of directors of the company.
(3.) THIS contention of learned Counsel for the petitioners cannot be accepted in view of the fact that the complaint, annexure PI specifically mentions that the board of directors of the company in their meeting held on January 13, 2006, have authorised Shri C.L. Chandok and Vimal Kumar to file a criminal complaint under Section 630 of the Act. Copy of the resolution has been attached as annexure C with the complaint. Whether the resolution passed was valid or not or any meeting was held on January 13, 2006, is a question of evidence and proceedings cannot be quashed on the plea that the resolution passed in favour of the persons representing the company was not valid.;