The central legal point established in the judgment is that an employee cannot be held liable for wrongful withholding of company property if the company fails to fulfill its obligation to pay gratuity as per the standing order.

( 1 ) THIS writ petition is filed seeking for issuance of a writ, order or direction to quash the order dated 23/01/2001 (annexure-6) passed by Special Judicial Magistrate, respondent No. 2. By the said order, the learned Magistrate rejected the petitioners application whereby she had prayed for quashing the order taking cognizance of the offence under Section 630 of the Companies Act, M/s. Sir Shadi Lal Enterprises Limited, respondent No. 3 filed a complaint alleging that the petitioner was a nurse-cum-midwife in Upper Doab Sugar Mills and on retirement from service did not vacate the companys quarter allotted to her in spite of notice and reminders issued from time to time. So withholding of possession of the quarter by the petitioner being an offence punishable under Section 630 of Indian Companies Act, she is liable for punishment as provided therein. The learned Magistrate took cognizance of the said offence and issued process against the petitioner, whereupon she moved the Court below praying to recall the said order contending inter alia that she having not paid her gratuity amount by the company, she will be deemed to be an employee and therefore, is not liable to vacate the quarter as long as the amount remains unpaid. That prayer having been rejected, she moved the revisional Court which did not yield desired result. Hence, she has filed present writ petition seeking the relief as aforesaid.

( 2 ) SECTION 630 of the Companies Act reads 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 authorised by this Act; he shall, on the complaint of the company or any creditor or contributory hereof, be punishable with fine which may extend to one 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. "

( 3 ) THE case of the respondent No. 2 as stated earlier is that the petitioner after having retired from Companys service was issued with a notice to hand over physical possession of the Companys quarter allotted to her which she did not. Question therefore, arises whether in view of such factual position she could be said to have wrongfully withheld the property of the company so as to be liable for punishment as provided under Section 630 of the Companies Act. The petitioner has filed the copy of the Companys relevant standing order, annexure-5 in clause -8 whereof it is stated that the company will pay the gratuity to a retired employee upon receipt of no dues certificate from the store and on payment of the gratuity the employee shall vacate the quarter and so long as the gratuity amount is not paid, the employee shall be deemed to be in service. In the counter affidavit, respondent No. 3 in paragraph 6 (ii) has stated that the Company has duly deposited the entire amount of gratuity to the tune of Rs. 67,793. 00 payable to the petitioner before the controlling authority on 3-10-2000 and accordingly, informed her that she can withdraw the same on furnishing the clearance certificate as provided in the Standing Order. The stand of respondent No. 3 as borne out from the affidavit is that the petitioner did not produce no dues certificate for payment of gratuity and illegally withheld possession of the quarter on flimsy ground. A copy of the letter dated 30-9-2000 addressed to the controlling authority under the Payment of Gratuity Act has been annexed as CA-2 to the counter affidavit. The said letter clearly discloses the intention of the company that the gratuity amo