ORDER
M.Y. Eqbal, J.
1. In this application filed under Section 482 Cr PC the petitioner has prayed for quashing the entire criminal proceedings and the order dated 16.3.2001 passed by Judicial Magistrate Jamshedpur in C.I. No. 1152 of 2000 whereby he has taken cognizance under Section 630 of the Company’s Act against the petitioner.
2. The brief facts of the case is that petitioner was in the service of opposite party No. 2 Company and while he was in service he was extended the facility of residential accommodation since 1993. Petitioner’s service was terminated by the Company with effect from 6.10.99. The Company thereafter asked the petitioner to vacate the residential quarter since he ceased to be in employment of the Company Inspite of notice and reminders, petitioner did not vacate the premises and thereby he alleged to have committed offence under Section 630 of the Companies Act by wrongfully withholding the said premises which is the property of the Company.
3. Learned counsel for the petitioner assailed the criminal proceeding and the order of cognizance as being illegal and wholly without jurisdiction. Learned counsel submitted that when the services of the petitioner was terminated, he moved before the appropriate government for referring the dispute to the Labour Court under Section 10 of the Industrial Disputes Act and the Government finally referred the disputes to the Labour Court vide notification dated 17.11.2000 being Reference Case No. 61/2000/. Learned counsel submitted that since termination of service of the petitioner was illegal, the Government referred the dispute to the Labour Court for adjudication and as such under these circumstances the criminal prosecution against the petitioner under Section 630 of the Companies Act is an abuse of process of the Court.
4. Section 630 of the Companies Act reads as under :
“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 to 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, knowingly misapplied or in default to suffer imprisonment for a term which may extend to two years.”
5. From bare perusal of the aforesaid provision, it is manifest that if any employee of a company wrongfully obtains illegal possession of any property of a company or having in possession of such property wrongfully withholding the same, is liable to be prosecuted and punished.
6. Having regard to the submission made by the learned counsel, the only question that falls for consideration is whether an officer or employee of a company whose services has been terminated can be brought under the mischief of the provision of Companies Act. In other words whether any employee or the officer of a company whose service has been, terminated can not be prosecuted under the aforesaid section merely because the order of termination is challenged before a Court of law. This question came for consideration before the Supreme Court in the case of Baldev Krishna Sahi v. Shipping Corporation of India Ltd., (1987) 4 SCC 361. It was held that such an employee or officer whose services has been terminated also come within the mischief of the provision of Section 630 of the said Act. Their Lordships observed :
“Section 630 of the Act which makes the wrongful withholding of any property of a company by an officer or employee of the company a penal offence, is typical of the economy of language which is characteristic of the draughtsman of the Act. The section Is in two parts. Sub-section (1) by Clauses (a) and (b) creates two distinct and separate offences. First of these Is the one contemplated by Clause (a), namely, where an officer of employee of a company wrongfully obtains possession of any property of the company during the course of his employment to which he is not entitled. Normally, it is only the present officers and employees who can secure possession of any property of a company. It is also possible for such an officer or employee after termination of his employment to wrongfully take away possession of any such property. This is the function of Clause (a) and although it primarily refers to the existing officers and employee, it may also take in past officers and employee. In contrast, Clause (b) contemplates a case where an officer or employee of a company having any property of a company in his possession wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by the Act. It may well be that an officer or employee may have lawfully obtained possession of any such property during the course of his employment but wrongfully withholds it after the termination of his employment. That appears to be one of the functions of Clause (b). It would be noticed that Clause (b) also make It an offence if any officer or employee of a company having any property of the company in his possession knowingly applies It to purposes other than those expressed or directed in the articles and authorised by the Act, that would primarily apply to the present officers and employees and may also include past officers and employees. There is therefore no warrant to give a restrictive meaning to the term “officer or employee” appearing in Sub-section (1) of Section 630 of the Act. It is quite evident that Clauses (a) and (b) are separated by the word ‘or’ and therefore are clearly disjunctive.”
7. It is, therefore, clear that if an officer or employee of the Company was permitted to occupy any property of the company during his employment and remain in wrongful occupation of the same after termination of his employment commits an offence under Section 630 of the said Act.
8. Similar view has been taken in the case of Lalita Jalan v. Bombay Gas Company Ltd., (2003) 6 SCC 107, where their Lordships held :
“The question which require consideration is whether the appellants, having not vacated the flat after the death of Sri N.K. Jalan to whom it was allotted in his capacity as director of the company, come within the ambit of Section 630 of the Act. The main ingredient of the section is wrongful withholding of the property of the company or knowingly applying it to purposes other than those expressed or directed in the articles and authorized by the Act. The dictionary meaning of the word “withholding” is to hold back; to keep back; to restrain or decline to grant. The holding back or keeping back is riot an isolated act but is a continuous process by which the property is not returned or restored to the company and the company is deprived of its possession. If the officer or employee of the company does any such act by which the property given to him is wrongfully withheld and is not restored back to the company, it will clearly amount to an offence within the meaning of Section 630 of the Act. The object of enacting the section is that the property of the company is preserved and is not used for purposes other than those expressed or directed in the articles of association of the company or as authorized by the provisions of the Act. On a literal interpretation of Section 630 of the Act the wrongful withholding of the property of the company by a person who has ceased to be an officer or employee thereof may not come within the ambit of the provisions as he is no longer an officer or employee of the company.”
9. Coming back to the instant case, admittedly service of the petitioner was terminated in 1999 and thereafter he ceased to be in the employment of the Company. Consequently, possession of the quarter allotted to the petitioner became wrongful possession. This is a different thing when the termination of service of the petitioner is declared illegal and he is reinstated in service but so long as the order of termination subsist the petitioner cannot be held to be in the employment of the company and possession of the premises allotted to him while he was in service cannot be held to be legal and valid possession. In that view of the matter initiation of criminal proceeding under Section 630 of the Companies Act cannot be held to be without jurisdiction.
10. For the aforesaid reasons. I do not find any merit in the application, which is accordingly dismissed.