A binding promise for property transfer cannot be inferred without a concluded contract; retention of company property post-employment is a criminal offense under Companies Act, 1956.

1. This proceeding is reminiscent of the allegoric reference to the proverbial serpent that attempted to sting the hand that was feeding it milk. Harsh as this may seem, a narration of the facts would indicate how appropriate the analogy is, the central issue canvassed in the case being one that is customarily pleaded as a defence in prosecution under S.630 of the Companies Act, 1956 , the law on the point requires to be settled. It has almost become routine in this class of litigation, for a contention to be adopted by the defence, that a promise was made to the accused ex - employee by or on behalf of the Company that the premises in question would be sold to the employee at book value or, in other words, for a fraction of the real market value or, in the case of rented premises, that the tenancy would be surrendered in favour of the occupant. This contention is pleaded in all seriousness and it is contended that the accused is entitled to enforce his rights by insisting on specific performance by the Company and that, consequently, the ingredient of wrongful retention or withholding of the premises is absent. Litigations are commenced in the Civil Courts for a declaration that the accused should be declared tenant or that he is entitled to enforce the sale at book value to himself for a totally unreal consideration on the ground that he is an intending purchaser, apart from other parallel proceedings in various Courts, and the criminal persecution instituted by the Company is sought to be stayed on the ground that the accused has raised issues which are within the exclusive jurisdiction of a Civil Court where the accused can confidently assure himself that the first round of litigation will not be over for at least two decades if the requisite dilatory tactics are resorted to.

2. The Courts in this country, and in particular the apex Court, have held with consistent regularity that S.630 of the Companies Act is a penal provision and that it is intended to provide an expedient and sure fire remedy for recovery of Company property that is wrongfully withheld, the term "property" being inclusive of residential premises retained by employee or ex - employees, who undoubtedly would use every available means to retain the property for so long as possible and to even appropriate it wherever the situation permits. The application of the law against such wrong - doers is not to be in a weak, long - drawn out insipid action which would have the effect of encouraging dishonesty, but the approach has to be strong, vigorous and efficient if there is to be respect for the rule of law. The Courts have hitherto interpreted S.630 of the Companies Act and have crystallised the position. That the remedy prescribed by the Section is required to be speedy, that it is required to be effective and that, consequently, it must necessarily yield the desired result is how the Section has been interpreted. What is, in fact, happening in the proceedings is exactly the reverse and it is, therefore, necessary to ensure that the law is given effect to and not put into cold - storage.

3. To state the central point in this proceeding, which briefly is that the accused was allotted and is in occupation of residential flat No. 32 on th