Important point
In a case of wrongful withholding of property of a company, where the erstwhile or former employee is himself not in occupation of the premises either on account of the fact that he is dead or he is living elsewhere, in such cases all those who have come in possession of the premises with the express or implied consent of the employee and have not vacated the premises would be withhold­ing the delivery of the property to the company and, therefore, they are liable to be prosecuted under Section 630 of the Compa­nies Act.

Judgment

G.P. Mathur, J.—Leave granted.

2. This appeal has been preferred against the judgment and order dated January 18, 2002 of High Court of Bombay by which the petition preferred by the appellants under Section 482 Cr. P.C. and Article 227 of the Constitution was dismissed. The matter has been referred to a three-Judge Bench in view of the apparent conflict in the two decisions of this Court in Abhilash Vinodkumar Jain v. Cox & Kings (India) Ltd. & Ors., 1995 (3) SCC 732 and J.K. (Bombay) Ltd. v. Bharti Matha Mishra & Ors., 2001 (2) SCC 700.

3. Bombay Gas Co. Ltd., respondent No. 1, had taken on lease a flat in a building known as "Hari Bhavan", 64, Pedder Road, Bombay. Shri N.K. Jalan, in his capacity as Director of the Company, was allotted the said flat. Ashok Kumar Jalan (accused No. 1 and respondent No. 2 in the present appeal) is son of Shri N.K. Jalan. Appellant No. 1, Smt. Lalita Jalan (accused No. 2) is wife of Ashok Kumar Jalan and appellant No. 2, Siddharth Jalan (accused No. 3) is his son. Shri N.K. Jalan died in 1967. The company purchased the flat and became owner thereof in April, 1991. It filed a criminal complaint under Section 630 of the Companies Act, 1956 (hereinafter referred to as 'the Act') against Ashok Kumar Jalan, Smt. Lalita Jalan and Siddharth Jalan on March 16, 1994. The proceedings of the complaint case were stayed in a company petition and finally sometime in the year 2001, the learned Magistrate issued process against the accused. The appellants moved an application for recall of the process issued against them and for their discharge, which was rejected by the Metropolitan Magistrate, 14th Court, Girgaum, Mumbai by order dated December 1, 2001. Thereafter, the appellants preferred a petition under Section 482 Cr. P.C. and Article 227 of the Constitution in the High Court of Bombay, which was dismissed by the impugned order dated January 18, 2002.

4. Shri Ashok Desai, learned senior counsel for the appellants, has submitted that in view of the plain language used in Section 630 of the Act, the said provision can apply only to an officer or employee of the company. The flat was given to Shri N.K. Jalan for his residence but he died when he was still functioning as Director of the company. The appellants, are neither officers nor employees of the company and, therefore, they cannot be prosecuted under the aforesaid provision and the complaint filed against them is an abuse of the process of the Court which is liable to be quashed. Shri Abhishek Singhvi, learned senior counsel for the respondent, Bombay Gas Company Ltd., has submitted that the appellants are family members of Late Shri N.K. Jalan and it is they who are wrongfully ­withholding the property of the company. In these circumstances they are fully liable to be pro­secuted under Section 630 of the Act and there is absolutely no ground for either quashing the complaint or the process issued against them.

5. In order to examine the contentions raised by learned counsel for the parties, it will be convenient to set out the provisions of Section 630 of the Companies Act, 1956, which read as under :

"630. Penalty for wrongful withholding of property—(1) If any officer or employee of a company–

(a) wrongfully 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 authorized 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."

6. The question which requires consideration is