1988 JTR(SC) 61
1988 AIR(SC) 733 ; 1988 2 CalLT(SC) 6 ; 1988 2 CLR 360 ; 1988 63 CompCas 839 ; 1988 CriLR 122 ; 1988 CriLR(Cal) 64 ; 1988 1 Crimes(SC) 596 ; 1988 EastCrC(SC) 299 ; 1988 1 JT 218 ; 1988 1 LLJ 421 ; 1988 1 LLN 939 ; 1988 PLJR(SC) 62 ; 1988 1 RCR(Cri) 618 ; 1988 RLR 170 ; 1988 1 Scale 213 ; 1988 2 SCC 269 ; 1988 SCC(Cri) 339 ; 1988 2 SCR 783 ; 1988 1 SLR 153
SUPREME COURT OF INDIA
A.P. SEN AND E.S. VENKATARAMIAH AND L.M. SHARMA, JJ.
Amrit Lal Chum, Appellant
Versus
Devoprasad Dutta Roy, Respondent.
Criminal Appeals Nos. 368 with 251-252 of 1986,
D/- 20-1-1988.
WITH
Amrit Lal Chum, Appellant
Versus
Debi Ranjan Jha and another, Respondents.
Advocates Appeared
Dr. Y. S. Chitale, Sr. Advocate and Mr. H. K. Puri, Advocate with him, for Appellant: Mr. Parijat Sinha, Advocate for Respondent in Crl. A. No. 368 of 1986 Mr. S. K. Kapur Sr. Advocate, Mr. Ranjan Dev and Mrs. Indra Sawhney, Advocates with him, for Respondents in Crl A. Nos 251-252 of 1986, Mr. Tapas Roy, Sr. Advocate and Mr. D. K. Sinha, Advocate with him, for the State of Bengal, Mr. D. K. Sinha, Mr. K. R. Nambiar, Ms. Reba Roy, Mr. K. K. Lahiri and Mr. Apsi Ditta, Advocates, for Interveners.
Act Referred :COMPANIES ACT : S.630(1)(b)
(A) Section 630(1)(b) of the Companies Act, 1956, was interpreted in light of a prior apex court ruling that expands the definition of "officer or employee" to encompass both serving and former officers or employees. The provision addresses the wrongful retention or occupation of any property of the company after the termination of employment. The court emphasized that the phrase "any such property" modifies "any property of company," reinforcing that the offense is complete upon the wrongful withholding of company assets post-employment.
(B) Key legal principles include a broad interpretation of officer or employee to include past personnel, the focus on the wrongful retention of property rather than its initial taking, and the precedence of a benevolent construction to ensure corporate accountability.
Facts of the case:
The appeals challenged an order dismissing complaints regarding the retention of company property after the termination of employment.
Findings of Court:
The court held that the learned counsel's arguments were not persuasive and reaffirmed the broad interpretation of officer or employee, concluding that the offenses alleged were made out by the evidence.
Issues:
Whether past officers or employees fall within the scope of Section 630(1)(b) and whether the wrongful retention of property after termination constitutes an offense.
Ratio Decidendi:
The wrongful retention or occupation of company property by a former officer or employee after the termination of their employment is an offense under Section 630(1)(b), irrespective of their status at the time of the alleged offense.
Result:
The appeals are allowed, the High Court orders are set aside, and respondents are granted time to vacate the premises subject to filing an undertaking.
(A) Section 630(1)(b) of the Companies Act, 1956, was interpreted in light of a prior apex court ruling that expands the definition of "officer or employee" to encompass both serving and former officers or employees. The provision addresses the wrongful retention or occupation of any property of the company after the termination of employment. The court emphasized that the phrase "any such property" modifies "any property of company," reinforcing that the offense is complete upon the wrongful withholding of company assets post-employment.
(B) Key legal principles include a broad interpretation of officer or employee to include past personnel, the focus on the wrongful retention of property rather than its initial taking, and the precedence of a benevolent construction to ensure corporate accountability.
Facts of the case:
The appeals challenged an order dismissing complaints regarding the retention of company property after the termination of employment.
Findings of Court:
The court held that the learned counsel's arguments were not persuasive and reaffirmed the broad interpretation of officer or employee, concluding that the offenses alleged were made out by the evidence.
Issues:
Whether past officers or employees fall within the scope of Section 630(1)(b) and whether the wrongful retention of property after termination constitutes an offense.
Ratio Decidendi:
The wrongful retention or occupation of company property by a former officer or employee after the termination of their employment is an offense under Section 630(1)(b), irrespective of their status at the time of the alleged offense.
Result:
The appeals are allowed, the High Court orders are set aside, and respondents are granted time to vacate the premises subject to filing an undertaking.
APSI DITTA, D.K.SINHA, H.K.PURI, Indra Sawhney, K.K.LAHRI, K.R.NAMBIAR, PARIJAT SINHA, RANJAN DEVI, REBA ROY, S.K.KAPOOR, TAPAS RAY, Y.S.Chitale
Judgment
ORDER:- After hearing Shri S. K Kapoor, learned counsel appearing for respondent No. 1 in Criminal Appeals Nos. 251-252 of 1986 at quite some length, we are not persuaded to take a view different from the one expressed by this Court in the recent judgment in Baldev Krishna Sahi v. Shipping Corpn. of India, Ltd., (1987) 4 SCC 361 : (AIR 1987 SC 2245) overruling the judgment of the Calcutta High Court in Amrit Lal Chum v. Devi Ranjan Jha, (1987) 61 Com Cas 211 as to the scope and effect of subs. (1) of S. 630 of the Companies Act, 1956. The Court in Baldev Krishna Sahis case has placed a beneficent construction on the provisions contained in sub-s. (1) of S. 630 of the Act and according to it the term officer or employee in sub-s. (1) of S. 630 must be interpreted to mean not only the present officers and employees of a company but also to include the past officers and employees of the Company. It has also taken the view that the words any such property in cl. (b) thereof qualify the words any property of Company appearing in cl. (a). As observed in Baldev Krishna Sahis case, S. 630 of the Act plainly makes it an offence if an officer or employee of a company who was permitted to use the property of the company during his employment, wrongfully retains or occupies the same after the termination of his employment. It is the wrongful withholding of such property, meaning the property of the company after termination of the employment, which is an offence under S. 630(1)(b) of the Act. The construction placed by this Court in Baldev Krishna Sahis case is the only construction possible. There is therefore no warrant to give a restrictive meaning to the term officer or employee appearing in sub-s. (1) of S. 630 of the Act as meaning only the existing officers and employees and not those whose employments have been terminated. The Court in Baldev Krishna Sahis case has expressly overruled the judgment of the Calcutta High Court in Amrit Lal Churn v. Devi Ranjan Jha, (supra) against which these appeals have been filed and upheld the consistent view to the contrary taken by the High Court of Bombay in a series of cases. See Harkishin Lakhimal Gidwani v. Achyut Kashinath Wagh, (1982) 52 Com Cas 1 Govind T. Jagtani v. Sirajuddin S. Kazi, (1984) 56 Com Cas 329.
2. Accordingly, these appeals must succeed and are allowed with costs. The judgment of the High Court allowing the applications under S. 482 of the Code of Criminal Procedure, 1973 are set aside.
3. Shri S. K. Kapoor, learned counsel appearing for respondent No. 1 in Criminal Appeals Nos. 251-252 of 1986 and Shri Parijat Sinha, learned counsel for respondent No. 1 in Criminal Appeal No. 368 of 1986 pray for time to vacate the premises in their occupation. We 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 a 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. 1053/83 in the Court of IIIrd Additional Judicial Magistrate, Alipore 24 Paraganas and Complaint Case No. 2788/84 in the Court of Special Divisional Judicial Magistrate, Alipore 24 Paragana shall continue. In the event of respondents failure to file the undertaking and/or vacate the premises within the time specified, the learned Magistrate shall proceed with the trial of these cases and dispose them of as expeditiously as possible and in any event, not later than October 31, 1988.
4. The intervention application filed by Tata iron and Steel Company Limited is not pressed.
Appeals allowed.
For Citation : AIR 1988 SC 733