1988 (1) TMI 278 - SC - Companies Law

Penalty for wrongful with holding of property - Held that - Grant the respondents time till June 30, 1988, to vacate the premises subject to their furnishing the usual undertaking in this court within four weeks from today. If there is failure on the part of the respondents to comply with these conditions, namely, failure to file the said undertaking and/or to vacate the premises within the time allowed, the cases against them, i.e. , Complaint Case No. 1053 of 1983 in the Court of IIIrd Additional Judicial Magistrate, Alipore, 24 Parganas, and Complaint Case No. 2788 of 1984 in the Court of the Special Divisional Judicial Magistrate, Alipore, 24 Parganas, shall continue.

Summary

Issues: Interpretation of section 630 of the Companies Act, 1956 regarding the scope and effect of the term "officer or employee" and the wrongful retention of company property after termination of employment.

In the judgment delivered by the Supreme Court, the court considered the interpretation of section 630 of the Companies Act, 1956, specifically focusing on the term "officer or employee" and the wrongful retention of company property after the termination of employment. The court referred to the recent judgment in Baldev Krishna Sahi v. Shipping Corporation of India Ltd. and emphasized that the term "officer or employee" in section 630 includes both present and past officers and employees of a company. The court clarified that retaining or occupying company property after employment termination constitutes an offense under section 630(1)(b) of the Act. The judgment in Baldev Krishna Sahi's case overruled the judgment of the Calcutta High Court in Amrit Lal Chum v. Devi Ranjanjha and upheld the consistent view taken by the High Court of Bombay in previous cases. The court concluded that the construction placed in Baldev Krishna Sahi's case is the only possible interpretation of the provision, rejecting a restrictive meaning of the term "officer or employee" to exclude past employees.

The appeals before the court were allowed, and the judgment of the High Court, which had allowed applications under section 482 of the Code of Criminal Procedure, 1973, was set aside. The court granted time to the respondents to vacate the premises they were occupying, setting a deadline of June 30, 1988, subject to them furnishing an undertaking within four weeks. Failure to comply with these conditions would result in the continuation of the cases against them in the respective courts. The court directed the Magistrates to proceed with the trial expeditiously if the respondents failed to file the undertaking and vacate the premises by the specified deadline, ensuring the cases are disposed of no later than October 31, 1988. Additionally, an intervention application filed by Tata Iron and Steel Co. Ltd. was not pursued in the proceedings.