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TMI Blog2009 (2) TMI 465X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether the proceedings under the said provision would cover within its purview only the employee of the company or also the persons claiming a right through him or under him. 3. In order to answer the aforesaid issue it would be necessary to set out the facts leading to filing of the case in which the aforesaid issue was raised and came to be considered : Mr. Chandra Bhushan Saran (since deceased) father of appellant No. 1 and maternal grandfather of appellant No. 2 was allotted third floor residential premises of the building "Devenshire House", Westfield Estate, at Bhulabhai Desai Road, Mumbai (hereinafter referred to as "suit premises") since he was appointed as a Director and Technical Advisor of one M/s. Automobile Products of India Ltd. (for short "API Ltd."). Subsequently he was appointed as Managing Director of the said company. The suit premises was owned by Her Highness Vijaya Raje Scindia, Maharani of Gwalior and was taken on lease by the API Ltd. for the residential needs of its employee. However, Mr. C.B. Saran resigned as Managing Director and later on also as its Director. Subsequent to his resignation as Managing Director, he was appointed as the Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad executed a sub-tenancy in favour of her mother and Mr. C.B. Saran was inducted in the suit premises as a tenant by API Ltd. in or about June, 1968 on a monthly rental of Rs. 1,400. In the later suit status quo order was passed which was extended subsequently. 7. The respondent No. 1 instituted a proceeding on 4-3-2004 under section 630 of the Act which was numbered as CC No. 74/SS/2005 against the present appellants and mother of appellant No. 1. The Additional Chief Metropolitan Magistrate vide order dated 26-6-2007 found the appellants guilty under section 630 of the Act and a sentence of Rs. 5,000 was imposed on each of the accused-appellant with default stipulation of simple imprisonment for 15 days. The appellants were directed to vacate the suit premises within 4 months from the date of said order and in default to suffer simple imprisonment for 4 months. 8. Being aggrieved by the said order the appellants filed a criminal appeal before the Sessions Judge which was dismissed. As the mother of appellant No. 1 died on 29-11-2007 her appeal stood abated. Against the said dismissal the two appellants preferred a criminal revision application before the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rongfully obtains possession of any property of a company; or ( b )having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act; he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to ten thousand rupees. (2) The Court trying the offence may also order such officer or employee to deliver up or refund, within a time to be fixed by the Court, any such property wrongfully obtained or wrongfully withheld or knowingly misapplied, or in default, to suffer imprisonment for a term which may extend to two years." 13. The main purpose to make action an offence under section 630 is to provide a speedy and summary procedure for retrieving the property of the company where it has been wrongly obtained by the employee or officer of the company or where the property has been lawfully obtained but unlawfully retained after termination of the employment of the employee or the officer. From the bare reading of the section, it is apparent that sub-section (1) is in two parts. Clauses ( a ) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitlement of the officer or employee to the allotted property of the company is contingent upon the right and capacity of the officer or the employee by virtue of his employment to continue in possession of the property belonging to the company, under authority of the company and the duration of such right is coterminous with his/her employment." (p. 738) In para 14 this Court further laid down the scope and ambit of section 630 : "Thus, inescapably it follows that the capacity, right to possession and the duration of occupation are all features which are integrally blended with the employment, and the capacity and the corresponding rights are extinguished with the cessation of employment and and obligation arises to hand over the allotted property back to the company. Where the property ofthe company is held back whether by the employee, past employee or anyone claiming under them, the retained possession would amount to wrongful withholding of the property of the company actionable under section 630 of the Act. The argument ofthe learned counsel for the appellants that since the provisions of section 630 of the Act are penal in nature the same must be strictly construed and, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been introduced. We are in respectful agreement with the above view and are of the opinion that the legal representatives or the heirs of the deceased employee or officer would squarely fall within the ambit of section 630 of the Act. To exclude them by giving a restrictive interpretation to the provisions would defeat the very object of the provision which declares the wrongful withholding of the property of the company to be an offence. It is immaterial whether the wrongful withholding is done by the employee or the officer or the past employee or the past officer or the heirs of the deceased employee or the officer or anyone claiming their right of occupancy under such an employee or an officer. It cannot be ignored that the legal heirs or representatives in possession of the property had acquired the right of occupancy in the property of the company, by virtue of being family members of the employee or the officer during the employment of the officer of the employee and not on any independent account. They, therefore, derive their colour and content from the employee or the officer only and have no independent or personal right to hold on to the property of the company. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (1) of section 630 should be interpreted to mean not only the present officers and employees of the company but also to include past officers and employees of the company. It was held that a narrow construction should not be placed upon sub-section (1) of section 630, which would defeat the very purpose and object with which it had been introduced but should be so construed so as to make it effective and operative. The Court held as under in para 7 of the Report: (SCC p. 366) 7. The beneficent provision contained in section 630 no doubt penal, has been purposely enacted by the Legislature with the object of providing a summary procedure for retrieving the property of the company ( a ) where an officer or employee of a company wrongfully obtains possession of property of the company, or ( b ) where having been placed in possession of any such property during the course of his employment, wrongfully withholds possession of it after the termination of his employment. It is the duty of the court to place a broad and liberal construction on the provision in furtherance of the object and purpose of the legislation which would suppress the mischief and advance the remedy. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the court, the possession of the property is not returned to the company, the question of imposing penalty will arise. Similar provisions are available even under the Code of Civil Procedure. In execution of a decree for recovery of money or enforcement of an injunction, the judgment-debtor can be committed to a prison. Such a provision by itself will not convert the civil proceeding into a criminal one. Even assuming that the said provision is criminal in nature, the penalty will be attracted in the event of not complying with the demand of the recovery of the possession or pursuant to an order made thereof. The possession of the property by an employee or any one claiming through him of such property is unlawful and recovery of the same on the pain of being committed to a prison or payment of fine cannot be stated to be unreasonable or irrational or unfair so as to attract the rigour of article 21 of the Constitution. If the object of the provision of section 630 of the Act is borne in mind, the expansive meaning given to the expression employee or anyone claiming through him will not be unrelated to the object of the provision nor is it so far- fetched as to become u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty acquire the right of occupancy in the property of the company, by virtue of being family members of the employee or the officer during the employment of the employee or the officer and not on any independent account. They, therefore, derive their colour and content from the employee or the officer only and have no independent or personal right to hold on to the property of the company. 18. The case in hand is the one which falls under the first part of clause ( b ) of sub-section (1) of section 630. The suit premises was allotted to Mr. C.B. Saran, the predecessor-in-interest of the appellants, in his capacity as a Managing Director of the respondent-company. The appellants herein had no direct relationship with the respondent-company. Both of them came in possession of the suit premises through the original allottee of the said premises, namely, Mr. C.B. Saran, who has since died. The company has every right and jurisdiction to preserve its property and to see that the same is not used for purposes other than the one expressed or directed in the articles of association of the company. On a careful reading of the ratio of the decisions in Abhilash Vinodkumar Jain s case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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