{"id":54398,"date":"2009-02-13T00:00:00","date_gmt":"2009-02-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/gopika-chandrabhushan-saran-anr-vs-ms-xlo-india-ltd-anr-on-13-february-2009"},"modified":"2018-11-28T13:53:13","modified_gmt":"2018-11-28T08:23:13","slug":"gopika-chandrabhushan-saran-anr-vs-ms-xlo-india-ltd-anr-on-13-february-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/gopika-chandrabhushan-saran-anr-vs-ms-xlo-india-ltd-anr-on-13-february-2009","title":{"rendered":"Gopika Chandrabhushan Saran &amp; Anr vs M\/S Xlo India Ltd.&amp; Anr on 13 February, 2009"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Gopika Chandrabhushan Saran &amp; Anr vs M\/S Xlo India Ltd.&amp; Anr on 13 February, 2009<\/div>\n<div class=\"doc_author\">Author: . M Sharma<\/div>\n<div class=\"doc_bench\">Bench: S.B. Sinha, Mukundakam Sharma<\/div>\n<pre>                              IN THE SUPREME COURT OF INDIA\n                  CRIMINAL APPELLATE JURISDICTION\n\n                   CRIMINAL APPEAL NO.295 OF 2009\n               (arising out of SLP (Crl.) No. 4685 of 2008)\n\n\nGopika Chandrabhushan Saran &amp; Anr.                     ...Appellants\n\n                                    Versus\n\nM\/s. XLO India Ltd. &amp; Anr.                             ...Respondents\n\n\n                               JUDGMENT\n<\/pre>\n<p>Dr. Mukundakam Sharma, J.\n<\/p>\n<\/p>\n<p>1. Leave Granted.\n<\/p>\n<\/p>\n<p>2. The issue that arises for our consideration in the present appeal is<\/p>\n<p>  with regard to the scope of and ambit of the provisions of Section<\/p>\n<p>  630 of the Companies Act, 1956 (hereinafter referred to as the<\/p>\n<p>  &#8220;Act&#8221;), more specifically, as to whether the proceedings under the<\/p>\n<p>  said provision would cover within its purview only the employee of<\/p>\n<p>  the company or also the persons claiming a right through him or<\/p>\n<p>  under him.\n<\/p>\n<p>3. In order to answer the aforesaid issue it would be necessary to set<\/p>\n<p>   out the facts leading to filing of the case in which the aforesaid issue<\/p>\n<p>   was raised and came to be considered:\n<\/p>\n<p>      Mr. Chandra Bhushan Saran (since deceased) father of appellant<\/p>\n<p>no. 1 and maternal grandfather of appellant no. 2 was allotted third<\/p>\n<p>floor residential premises of the building &#8220;Devenshire House&#8221;, Westfield<\/p>\n<p>Estate, at Bhulabhia Desai Road, Mumbai (hereinafter referred to as<\/p>\n<p>&#8220;suit premises&#8221;) since he was appointed as a Director and Technical<\/p>\n<p>Advisor of one M\/s Automobile Products of India Ltd. (for short &#8220;API<\/p>\n<p>Ltd.&#8221;). Subsequently he was appointed as Managing Director of the said<\/p>\n<p>company. The suit premises was owned by Her Highness Vijaya Raje<\/p>\n<p>Scindia Maharani of Gwalior and was taken on lease by the API Ltd. for<\/p>\n<p>the residential needs of its employee.\n<\/p>\n<\/p>\n<p>      However, Mr. C. B. Saran resigned as Managing Director and later<\/p>\n<p>on also as its Director.   Subsequent to his resignation as Managing<\/p>\n<p>Director, he was appointed as the Managing Director of Ex-Cello Ltd.,<\/p>\n<p>respondent No. 1 herein. Mr. C. B. Saran made a representation to the<\/p>\n<p>then Chairman of the API Ltd., that as a Managing Director of the<\/p>\n<p>respondent No. 1 company he was entitled to rent free accommodation<\/p>\n<p>and for the sake of convenience the API Ltd. may execute a licence<\/p>\n<p><span class=\"hidden_text\">                                Page 2 of 19<\/span><br \/>\nagreement in respect of the suit premises in favour of respondent no. 1,<\/p>\n<p>who in turn may permit him to occupy the suit premises.<\/p>\n<p>      The request of Mr. C.B. Saran was considered favourably in the<\/p>\n<p>Board Meeting dated 12.06.1968 in which Mr. Saran was also present as<\/p>\n<p>a Director.   Accordingly, Mr. C. B. Saran along with his family, which<\/p>\n<p>consisted of his wife, son and daughter, continued to occupy the said<\/p>\n<p>premises.\n<\/p>\n<\/p>\n<p>      Mr. C. B. Saran expired in Germany on 16.07.1980 and on his<\/p>\n<p>demise his son Mr. Sanjay Saran, who was Joint Managing Director<\/p>\n<p>became the Managing Director of the respondent no. 1 company. By<\/p>\n<p>virtue of his employment with respondent No. 1 the suit premises was<\/p>\n<p>allotted in his favour and the appellant no. 1 being sister of Mr. Sanjay<\/p>\n<p>Saran and appellant no. 2 being his nephew continued to stay in the suit<\/p>\n<p>premises.\n<\/p>\n<\/p>\n<p>4. It is pertinent to mention here that in the year 1976 API Ltd. filed a<\/p>\n<p>   suit before Ld. Small Causes Court against the respondent no. 1 and<\/p>\n<p>   Mr. C. B. Saran being suit no. 206\/519 of 1976 disputing the tenancy<\/p>\n<p>   right in relation to the suit property. After the demise of Mr. C. B.<\/p>\n<p><span class=\"hidden_text\">                               Page 3 of 19<\/span><br \/>\n  Saran his legal heirs, including the appellant No. 1, were substituted<\/p>\n<p>  in the said suit.\n<\/p>\n<\/p>\n<p>5. On 20.03.2002 the respondent no. 1 also issued a letter to Mr.<\/p>\n<p>  Sanjay Saran stating that they are in need of the premises and the<\/p>\n<p>  suit premises should be vacated.      In terms of the said letter Mr.<\/p>\n<p>  Sanjay Saran vacated the premises but however the appellants<\/p>\n<p>  continued to hold the possession of the said premises and refused to<\/p>\n<p>  surrender the possession. On the other hand, the present appellants<\/p>\n<p>  along with Smt. Minal Saran (since deceased), mother of appellant<\/p>\n<p>  No.1 and Mr. Sanjay Saran challenged the right of respondent No. 1<\/p>\n<p>  &#8211; company to demand possession of the suit premises.<\/p>\n<p>6. The appellants also filed a suit before the Small Causes Court being<\/p>\n<p>  R.A.D Suit No. 502\/2004. Another suit was filed by the appellants<\/p>\n<p>  before the Small Causes Court being R.A.D. Suit No. 1495\/2007<\/p>\n<p>  against API Ltd. and Her Highness Vijaya Raje Scindia, Maharani of<\/p>\n<p>  Gwalior, alleging that Mr. C. B. Saran had executed a sub-tenancy in<\/p>\n<p>  favour of her mother and Mr. C. B. Saran was inducted in the suit<\/p>\n<p>  premises as a tenant by API Ltd. in or about June, 1968 on a<\/p>\n<p>  monthly rental of Rs. 1400\/-. In the later suit status quo order was<\/p>\n<p>  passed which was extended subsequently.\n<\/p>\n<p><span class=\"hidden_text\">                              Page 4 of 19<\/span>\n<\/p>\n<p>7. The respondent no. 1 instituted a proceeding on 04.03.2004 under<\/p>\n<p>  section 630 of the Act which was numbered as CC No. 74\/SS\/2005<\/p>\n<p>  against the present appellants and mother of appellant     no. 1. The<\/p>\n<p>  Additional Chief Metropolitan Magistrate vide order dated 26.06.2007<\/p>\n<p>  found the appellants guilty under Section 630 of the Act and a<\/p>\n<p>  sentence of Rs. 5,000\/- was imposed on each of the accused-<\/p>\n<p>  appellant with default stipulation of simple imprisonment for 15 days.<\/p>\n<p>  The appellants were directed to vacate the suit premises within 4<\/p>\n<p>  months from the date of said order and in default to suffer simple<\/p>\n<p>  imprisonment for 4 months.\n<\/p>\n<\/p>\n<p>8. Being aggrieved by the said order the appellants filed a criminal<\/p>\n<p>  appeal before the Sessions Judge which was dismissed.          As the<\/p>\n<p>  mother of appellant No. 1 died on 29.11.2007 her appeal stood<\/p>\n<p>  abated. Against the said dismissal the two appellants preferred a<\/p>\n<p>  criminal revision application before the High Court of Bombay. The<\/p>\n<p>  learned Single Judge heard the parties on merits and dismissed the<\/p>\n<p>  appeal. The learned Single Judge while upholding the order of the<\/p>\n<p>  courts below held that the appellants were liable to be convicted<\/p>\n<p>  under Section 630 of the Act as they withhold the delivery of the<\/p>\n<p>  property of respondent No. 1 &#8211; company. In terms of the prayer<\/p>\n<p><span class=\"hidden_text\">                               Page 5 of 19<\/span><br \/>\n  made by the learned counsel appearing for the appellants, the<\/p>\n<p>  learned Single Judge granted stay of eight weeks to approach the<\/p>\n<p>  higher court, subject to an undertaking that in the event of their<\/p>\n<p>  failing before the higher court, they shall vacate and hand over<\/p>\n<p>  vacant and peaceful possession of the suit premises to respondent<\/p>\n<p>  no. 1.\n<\/p>\n<\/p>\n<p>9. It is against the said order that the appellants have approached this<\/p>\n<p>  Court. We have heard the leaned senior counsel appearing for the<\/p>\n<p>  parties and also scrutinised the documents on record.<\/p>\n<p>10.Mr. Colin Gonsalves, learned senior counsel appearing for the<\/p>\n<p>  appellants mainly contented before us that no proceeding could have<\/p>\n<p>  been initiated under section 630 of the Act, as the provision of the<\/p>\n<p>  said section is applicable only to the employee or officer of the<\/p>\n<p>  company and no action could have been initiated under said section<\/p>\n<p>  against any other person other than the said employee or officer.<\/p>\n<p>  He, however, also made an averment to the effect that the mother of<\/p>\n<p>  the appellant No. 1 was a sub-tenant in the suit premises, in respect<\/p>\n<p>  to which a suit is pending before the Small Causes Court in which<\/p>\n<p>  status quo order has been granted, and therefore, this Court should<\/p>\n<p><span class=\"hidden_text\">                              Page 6 of 19<\/span><br \/>\n  await the decision in the aforesaid suit pending before the Small<\/p>\n<p>  Causes Court.\n<\/p>\n<\/p>\n<p>11. Mr. Dushyant Dave, learned senior counsel appearing for the<\/p>\n<p>  respondent   company    on   the   other    hand   submitted   that   the<\/p>\n<p>  judgments passed by the courts below need no interference.            He<\/p>\n<p>  strenuously relied on the decision of this court in <a href=\"\/doc\/1569287\/\">Lalita Jalan and<\/p>\n<p>  Another v. Bombay Gas Co. Ltd. and others<\/a> reported in (2003) 6 SCC<\/p>\n<p>  107.   He also submitted that the appellants illegally continued to<\/p>\n<p>  occupy the said premises, and therefore, they are liable to vacate the<\/p>\n<p>  suit premises immediately.\n<\/p>\n<\/p>\n<p>12.In order to examine the contentions raised by learned counsel for<\/p>\n<p>  the parties, it will be convenient to set out the provisions of Section<\/p>\n<p>  630 of the Companies Act, 1956, which read as under:<\/p>\n<p>     &#8220;630. Penalty for wrongful withholding of property.\n<\/p>\n<p>     &#8212;\n<\/p>\n<p>     (1) If any officer or employee of a company&#8211;\n<\/p>\n<blockquote><p>           (a) wrongfully obtains possession of any property of<br \/>\n           a company; or\n<\/p><\/blockquote>\n<blockquote><p>           (b) having any such property in his possession,<br \/>\n           wrongfully withholds it or knowingly applies it to<br \/>\n           purposes other than those expressed or directed in<br \/>\n           the articles and authorised by this Act;\n<\/p><\/blockquote>\n<p><span class=\"hidden_text\">                               Page 7 of 19<\/span><\/p>\n<p>     he shall, on the complaint of the company or any creditor<br \/>\n     or contributory thereof, be punishable with fine which may<br \/>\n     extend to ten thousand rupees.\n<\/p>\n<p>     (2) The court trying the offence may also order such officer<br \/>\n     or employee to deliver up or refund, within a time to be<br \/>\n     fixed by the court, any such property wrongfully obtained<br \/>\n     or wrongfully withheld or knowingly misapplied, or in<br \/>\n     default, to suffer imprisonment for a term which may<br \/>\n     extend to two years.&#8221;\n<\/p>\n<\/p>\n<p>13.The main purpose to make action an offence under Section 630 is to<\/p>\n<p>  provide a speedy and summary procedure for retrieving the property<\/p>\n<p>  of the company where it has been wrongly obtained by the employee<\/p>\n<p>  or officer of the company or where the property has been lawfully<\/p>\n<p>  obtained but unlawfully retained after termination of the employment<\/p>\n<p>  of the employee or the officer. From the bare reading of the section,<\/p>\n<p>  it is apparent that sub-section (1) is in two parts. Clauses (a) and (b)<\/p>\n<p>  of sub-section (1) create two different and separate offences. Clause<\/p>\n<p>  (a) contemplates a situation wherein an officer or employee of the<\/p>\n<p>  company wrongfully obtains possession of any property of the<\/p>\n<p>  company during the course of his employment to which he is not<\/p>\n<p>  entitled whereas clause (b) contemplates a case where an officer or<\/p>\n<p>  employee of the company having any property of the company in his<\/p>\n<p>  possession, wrongfully withholds it or knowingly applies it to<\/p>\n<p>  purposes other than those expressed or directed in the articles and<\/p>\n<p>  authorised by the company. Under this provision, it may be that an<\/p>\n<p><span class=\"hidden_text\">                               Page 8 of 19<\/span><br \/>\n  officer or an employee may have lawfully obtained possession of any<\/p>\n<p>  property during the course of his employment, still it is an offence if<\/p>\n<p>  he wrongfully withholds it after the termination of his employment.<\/p>\n<p>  Clause (b) also makes it an offence, if any officer or employee of the<\/p>\n<p>  company having any property of the company in his possession<\/p>\n<p>  knowingly applies it to purposes other than those expressed or<\/p>\n<p>  directed in the articles and authorised by the Act. In terms of sub-<\/p>\n<p>  section (2) the court is empowered to impose a fine on the officer or<\/p>\n<p>  employee of the company if found in breach of the provision of<\/p>\n<p>  Section 630 of the Companies Act and further to issue direction if the<\/p>\n<p>  court feels it just and appropriate for delivery of the possession of<\/p>\n<p>  the property of the company and to impose a sentence of<\/p>\n<p>  imprisonment when there is non-compliance with the order of the<\/p>\n<p>  court regarding delivery or refund of the property of the company.<\/p>\n<p>14. <a href=\"\/doc\/1277489\/\">In Abhilash Vinodkumar Jain v. Cox &amp; Kings (India) Ltd.,<\/a> (1995) 3<\/p>\n<p>  SCC 732 this Court had occasion to deal with scope and ambit of the<\/p>\n<p>  provisions of Section 630 of the Act. This Court analyzed Section 630<\/p>\n<p>  and drew a logical deduction in para 13, which is as follows:<\/p>\n<p>     &#8220;13. The logical deduction of the analysis of Section 630 of<br \/>\n     the Act in the light of the law laid down by this Court is that:<\/p>\n<p>        (i) Clause (a) of the section is self-contained and<br \/>\n            independent of clause (b) with the capacity of creating<\/p>\n<p><span class=\"hidden_text\">                               Page 9 of 19<\/span><br \/>\n             penal liability embracing the case of an existing<br \/>\n             employee or an officer of the company and includes a<br \/>\n             past officer or a past employee of the company;<\/p>\n<p>          (ii)Clause (b) is equally independent and distinct from<br \/>\n              clause (a) as regards penal consequences and it<br \/>\n              squarely applies to the cases of past employees or<br \/>\n              officers;\n<\/p>\n<\/p>\n<p>          (iii)the entitlement of the officer or employee to the<br \/>\n               allotted property of the company is contingent upon<br \/>\n               the right and capacity of the officer or the employee<br \/>\n               by virtue of his employment to continue in possession<br \/>\n               of the property belonging to the company, under<br \/>\n               authority of the company and the duration of such<br \/>\n               right is coterminous with his\/her employment.<\/p>\n<p>In para 14 this Court further laid down the Scope and ambit of Section<\/p>\n<p>630:\n<\/p>\n<blockquote><p>       14. Thus, inescapably it follows that the capacity, right to<br \/>\n       possession and the duration of occupation are all features<br \/>\n       which are integrally blended with the employment, and the<br \/>\n       capacity and the corresponding rights are extinguished with<br \/>\n       the cessation of employment and an obligation arises to<br \/>\n       hand over the allotted property back to the company. Where<br \/>\n       the property of the company is held back whether by the<br \/>\n       employee, past employee or anyone claiming under them,<br \/>\n       the retained possession would amount to wrongful<br \/>\n       withholding of the property of the company actionable under<br \/>\n       Section 630 of the Act. The argument of the learned counsel<br \/>\n       for the appellants that since the provisions of Section 630 of<br \/>\n       the Act are penal in nature the same must be strictly<br \/>\n       construed and, the parties which have not been expressly<br \/>\n       included by the legislature in Section 630(1) of the Act,<br \/>\n       cannot by any interpretative extension be included in the<br \/>\n       said provision, ignores the situation that by a deeming<br \/>\n       fiction, the legal representatives or heirs of a past employee<br \/>\n       or officer, in occupation of the property of the company,<br \/>\n       would continue to enjoy the personality and status of the<br \/>\n       employee or the officer only. An argument quite similar in<\/p>\n<p><span class=\"hidden_text\">                                Page 10 of 19<\/span><br \/>\nnature was raised in Baldev Krishna Sahi case (1987) 4 SCC<br \/>\n361 also while resisting the extension of the provisions of<br \/>\nSection 630 of the Act to the past employee or past officer<br \/>\nand rejecting the same, this Court opined: (SCC pp. 365-\n<\/p><\/blockquote>\n<p>66, para 6)<\/p>\n<p>   &#8220;The first and foremost argument of learned counsel<br \/>\n  for the petitioner is that the provision contained in<br \/>\n  Section 630 of the Act is a penal provision and<br \/>\n  therefore must be subject to a strict construction and<br \/>\n  there is no room for intendment. It is submitted that<br \/>\n  on a true construction, the scope and effect of the<br \/>\n  section was limited to such property of the company<br \/>\n  which was wrongfully obtained by an officer or<br \/>\n  employee of the company. Emphasis was placed upon<br \/>\n  the words `any such property&#8217; in clause (b) of sub-<br \/>\n  section (1) for the contention that clause (b) does not<br \/>\n  stand by itself but is interconnected with clause (b)<br \/>\n  (sic) and therefore both clauses (a) and (b) must be<br \/>\n  read together. In essence, the submission is that sub-<br \/>\n  section (1) of Section 630 of the Act makes it an<br \/>\n  offence where any officer or employee of a company<br \/>\n  wrongfully withholds possession of such property of<br \/>\n  the company. Secondly, it is contended that the<br \/>\n  legislature never intended to include past officers and<br \/>\n  employees of a company within the ambit of Section<br \/>\n  630 of the Act which provides for prosecution of an<br \/>\n  officer or employee of a company for wrongfully<br \/>\n  withholding the property of the company inasmuch as<br \/>\n  it has used different languages where it was so<br \/>\n  intended, namely, in Sections 538 and 545. The entire<br \/>\n  argument of the learned counsel is based upon the<br \/>\n  judgment of the High Court of Calcutta in Amritlal<br \/>\n  Chum case [(1987) 61 Comp Cas 211 (Cal)]. We are<br \/>\n  afraid, we find it difficult to subscribe to the narrow<br \/>\n  construction placed by the High Court of Calcutta on<br \/>\n  the provision contained in sub-section (1) of Section<br \/>\n  630 of the Act which defeats the very purpose and<br \/>\n  object with which it had been introduced.&#8221;\n<\/p>\n<p>\nWe are in respectful agreement with the above view and are<br \/>\nof the opinion that the legal representatives or the heirs of<br \/>\nthe deceased employee or officer would squarely fall within<br \/>\nthe ambit of Section 630 of the Act. To exclude them by<\/p>\n<p><span class=\"hidden_text\">                        Page 11 of 19<\/span><br \/>\n     giving a restrictive interpretation to the provisions would<br \/>\n     defeat the very object of the provision which declares the<br \/>\n     wrongful withholding of the property of the company to be<br \/>\n     an offence. It is immaterial whether the wrongful<br \/>\n     withholding is done by the employee or the officer or the<br \/>\n     past employee or the past officer or the heirs of the<br \/>\n     deceased employee or the officer or anyone claiming their<br \/>\n     right of occupancy under such an employee or an officer. It<br \/>\n     cannot be ignored that the legal heirs or representatives in<br \/>\n     possession of the property had acquired the right of<br \/>\n     occupancy in the property of the company, by virtue of<br \/>\n     being family members of the employee or the officer during<br \/>\n     the employment of the officer or the employee and not on<br \/>\n     any independent account. They, therefore, derive their<br \/>\n     colour and content from the employee or the officer only<br \/>\n     and have no independent or personal right to hold on to the<br \/>\n     property of the company. Once the right of the employee or<br \/>\n     the officer to retain the possession of the property, either on<br \/>\n     account of termination of services, retirement, resignation<br \/>\n     or death, gets extinguished, they (persons in occupation)<br \/>\n     are under an obligation to return the property back to the<br \/>\n     company and on their failure to do so, they render<br \/>\n     themselves liable to be dealt with under Section 630 of the<br \/>\n     Act for retrieval of the possession of the property.<\/p>\n<p>15. The ratio of Abhilash Vinodkumar Jain (supra) was reiterated by<\/p>\n<p>  another larger bench in Lalita Jalan (supra), wherein it laid down the<\/p>\n<p>  main ingredients of Section 630 in para 6 and 7, the same are<\/p>\n<p>  extracted hereunder:\n<\/p>\n<p>\n     &#8220;6. The question which requires consideration is whether<br \/>\n     the appellants, having not vacated the flat after the death of<br \/>\n     Shri N.K. Jalan to whom it was allotted in his capacity as<br \/>\n     director of the company, come within the ambit of Section<br \/>\n     630 of the Act. The main ingredient of the section is<br \/>\n     wrongful withholding of the property of the company or<br \/>\n     knowingly applying it to purposes other than those<br \/>\n     expressed or directed in the articles and authorised by the<\/p>\n<p><span class=\"hidden_text\">                              Page 12 of 19<\/span><br \/>\nAct. The dictionary meaning of the word &#8220;withholding&#8221; is to<br \/>\nhold back; to keep back; to restrain or decline to grant. The<br \/>\nholding back or keeping back is not an isolated act but is a<br \/>\ncontinuous process by which the property is not returned or<br \/>\nrestored to the company and the company is deprived of its<br \/>\npossession. If the officer or employee of the company does<br \/>\nany such act by which the property given to him is<br \/>\nwrongfully withheld and is not restored back to the<br \/>\ncompany, it will clearly amount to an offence within the<br \/>\nmeaning of Section 630 of the Act. The object of enacting<br \/>\nthe section is that the property of the company is preserved<br \/>\nand is not used for purposes other than those expressed or<br \/>\ndirected in the articles of association of the company or as<br \/>\nauthorised by the provisions of the Act. On a literal<br \/>\ninterpretation of Section 630 of the Act the wrongful<br \/>\nwithholding of the property of the company by a person who<br \/>\nhas ceased to be an officer or employee thereof may not<br \/>\ncome within the ambit of the provision as he is no longer an<br \/>\nofficer or employee of the company. <a href=\"\/doc\/1536419\/\">In Baldev Krishna Sahi<br \/>\nv. Shipping Corpn. of India Ltd.<\/a> (1987) 4 SCC 361 the Court<br \/>\nwas called upon to consider the question whether the words<br \/>\n&#8220;officer or employee&#8221; existing in sub-section (1) of Section<br \/>\n630 should be interpreted to mean not only the present<br \/>\nofficers and employees of the company but also to include<br \/>\npast officers and employees of the company. It was held<br \/>\nthat a narrow construction should not be placed upon sub-<br \/>\nsection (1) of Section 630, which would defeat the very<br \/>\npurpose and object with which it had been introduced but<br \/>\nshould be so construed so as to make it effective and<br \/>\noperative. The Court held as under in para 7 of the Report:<br \/>\n(SCC p. 366)<\/p>\n<p>  &#8220;7. The beneficent provision contained in Section 630<br \/>\n  no doubt penal, has been purposely enacted by the<br \/>\n  legislature with the object of providing a summary<br \/>\n  procedure for retrieving the property of the company\n<\/p>\n<p>  (a) where an officer or employee of a company<br \/>\n  wrongfully obtains possession of property of the<br \/>\n  company, or (b) where having been placed in<br \/>\n  possession of any such property during the course of<br \/>\n  his employment, wrongfully withholds possession of it<br \/>\n  after the termination of his employment. It is the duty<br \/>\n  of the court to place a broad and liberal construction<br \/>\n  on the provision in furtherance of the object and<br \/>\n  purpose of the legislation which would suppress the<br \/>\n  mischief and advance the remedy.&#8221;\n<\/p>\n<p>7.     The Court went on to observe that it is only the<br \/>\npresent officers and employees who can secure possession<br \/>\nof any property of a company and it is possible for such an<br \/>\nofficer or employee to wrongfully take away possession of<\/p>\n<p><span class=\"hidden_text\">                        Page 13 of 19<\/span><br \/>\n     any such property after termination of his employment.\n<\/p>\n<p>     Therefore, the function of clause (a) though it primarily<br \/>\n     refers to the existing officers and employees, is to take<br \/>\n     within its fold an officer or employee who may have<br \/>\n     wrongfully obtained possession of any such property during<br \/>\n     the course of his employment, but wrongfully withholds it<br \/>\n     after the termination of his employment. It was further held<br \/>\n     that Section 630 plainly makes it an offence if an officer or<br \/>\n     employee of the company who was permitted to use any<br \/>\n     property of the company during his employment, wrongfully<br \/>\n     retains or occupies the same after the termination of his<br \/>\n     employment and that it is the wrongful withholding of the<br \/>\n     property of the company after the termination of the<br \/>\n     employment, which is an offence under Section 630(1)(b) of<br \/>\n     the Act&#8221;.\n<\/p>\n<p>\nThis Court further laid down in paras 22 and 23 as follows:<\/p>\n<blockquote><p>     &#8220;22. The view expressed in J.K. (Bombay) Ltd. (2001) 2<br \/>\n     SCC 700 runs counter to the view expressed in Abhilash<br \/>\n     Vinodkumar Jain (1995) 3 SCC 732 wherein it has been<br \/>\n     clearly held that the object of Section 630 of the Act is to<br \/>\n     retrieve the property of the company where wrongful<br \/>\n     holding of the property is done by an employee, present or<br \/>\n     past, or heirs of the deceased employee or officer or anyone<br \/>\n     claiming the occupancy through such employee or officer.<\/p><\/blockquote>\n<p>     The view expressed in Abhilash Vinodkumar Jain (1995) 3<br \/>\n     SCC 732 clearly subserves the object of the Act which is to<br \/>\n     the effect of recovering the possession of the property<br \/>\n     belonging to the company. If it is held that other members<br \/>\n     of the family of the employee or officer or any person not<br \/>\n     connected with the family who came into possession through<br \/>\n     such employee would not be covered by Section 630 of the<br \/>\n     Act, such a view will defeat the quick and expeditious<br \/>\n     remedy provided therein. The basic objection to this view is<br \/>\n     that the aforesaid provision contained in Section 630 of the<br \/>\n     Act is penal in nature and must be strictly construed and<br \/>\n     therefore the actual words used should not be given any<br \/>\n     expansive meaning. A provision of this nature is for the<br \/>\n     purpose of recovery of the property and if, in spite of<br \/>\n     demand or subsequent order of the court, the possession of<br \/>\n     the property is not returned to the company, the question of<br \/>\n     imposing penalty will arise. Similar provisions are available<br \/>\n     even under the Code of Civil Procedure. In execution of a<br \/>\n     decree for recovery of money or enforcement of an<br \/>\n     injunction, the judgment-debtor can be committed to a<br \/>\n     prison. Such a provision by itself will not convert the civil<br \/>\n     proceeding into a criminal one. Even assuming that the said<br \/>\n     provision is criminal in nature, the penalty will be attracted<br \/>\n     in the event of not complying with the demand of the<br \/>\n     recovery of the possession or pursuant to an order made<br \/>\n     thereof. The possession of the property by an employee or<\/p>\n<p><span class=\"hidden_text\">                              Page 14 of 19<\/span><br \/>\n     anyone claiming through him of such property is unlawful<br \/>\n     and recovery of the same on the pain of being committed to<br \/>\n     a prison or payment of fine cannot be stated to be<br \/>\n     unreasonable or irrational or unfair so as to attract the<br \/>\n     rigour of Article 21 of the Constitution. If the object of the<br \/>\n     provision of Section 630 of the Act is borne in mind, the<br \/>\n     expansive meaning given to the expression &#8220;employee or<br \/>\n     anyone claiming through him&#8221; will not be unrelated to the<br \/>\n     object of the provision nor is it so far fetched as to become<br \/>\n     unconstitutional. Therefore, with profound respects the view<br \/>\n     expressed in J.K. (Bombay) Ltd. (2001) 2 SCC 700 in our<br \/>\n     opinion is not correct and the view expressed in Abhilash<br \/>\n     Vinodkumar Jain (1995) 3 SCC 732 is justified and should be<br \/>\n     accepted in interpreting the provision of Section 630 of the<br \/>\n     Act.\n<\/p>\n<p>     23. If an erstwhile or former employee is prosecuted under<br \/>\n     Section 630 of the Act on account of the fact that he has not<br \/>\n     vacated the premises and continues to remain in occupation<br \/>\n     of the same even after termination of his employment, in<br \/>\n     normal circumstances it may not be very proper to<br \/>\n     prosecute his wife and dependent children also as they are<br \/>\n     bound to stay with him in the same premises. The position<br \/>\n     will be different where the erstwhile or former employee is<br \/>\n     himself not in occupation of the premises either on account<br \/>\n     of the fact that he is dead or he is living elsewhere. In such<br \/>\n     cases all those who have come in possession of the<br \/>\n     premises with the express or implied consent of the<br \/>\n     employee and have not vacated the premises would be<br \/>\n     withholding the delivery of the property to the company and,<br \/>\n     therefore, they are liable to be prosecuted under Section<br \/>\n     630 of the Act. This will include anyone else who has been<br \/>\n     inducted in possession of the property by such persons who<br \/>\n     continue to withhold the possession of the premises as such<br \/>\n     person is equally responsible for withholding and non-<br \/>\n     delivery of the property of the company&#8221;.\n<\/p>\n<\/p>\n<p>16. The capacity, right to possession and the duration of occupation are<\/p>\n<p>  all features which are integrally blended with the employment. Once<\/p>\n<p>  the right of the employee or the officer to retain the possession of<\/p>\n<p>  the   property,   either   on    account        of   termination   of   services,<\/p>\n<p>  retirement, resignation or death, gets extinguished, they (persons in<\/p>\n<p><span class=\"hidden_text\">                                  Page 15 of 19<\/span><br \/>\n   occupation) are under an obligation to return the property back to<\/p>\n<p>   the company and on their failure to do so, they render themselves<\/p>\n<p>   liable to be dealt with under Section 630 of the Act for retrieval of<\/p>\n<p>   the possession of the property.\n<\/p>\n<\/p>\n<p>17. The ratio laid down in the above said two cases makes it explicitly<\/p>\n<p>   clear that Section 630 of the Act will cover within its ambit not only<\/p>\n<p>   the employee or officer but also the past employee or the past officer<\/p>\n<p>   or the heirs of the deceased employee or anyone claiming under<\/p>\n<p>   them in possession of the property. The legal heirs or representatives<\/p>\n<p>   in possession of the property acquire the right of occupancy in the<\/p>\n<p>   property of the company, by virtue of being family members of the<\/p>\n<p>   employee or the officer during the employment of the employee or<\/p>\n<p>   the officer and not on any independent account. They, therefore,<\/p>\n<p>   derive their colour and content from the employee or the officer only<\/p>\n<p>   and have no independent or personal right to hold on to the property<\/p>\n<p>   of the company.\n<\/p>\n<\/p>\n<p>18. The case in hand is the one which falls under the first part of clause<\/p>\n<p>   (b) of sub-section (1) of Section 630. The suit premises was allotted<\/p>\n<p>   to Mr. C. B. Saran, the predecessor-in-interest of the appellants, in<\/p>\n<p>   his capacity as a Managing Director of the respondent company. The<\/p>\n<p><span class=\"hidden_text\">                               Page 16 of 19<\/span><br \/>\n  appellants herein had no direct relationship with the respondent<\/p>\n<p>  company.    Both of them came in possession of the suit premises<\/p>\n<p>  through the original allottee of the said premises, namely, Mr. C. B.<\/p>\n<p>  Saran, who has since died.        The company has every right and<\/p>\n<p>  jurisdiction to preserve its property and to see that the same is not<\/p>\n<p>  used for purposes other than the one expressed or directed in the<\/p>\n<p>  articles of association of the company. On a careful reading of the<\/p>\n<p>  ratio of the decisions in Abhilash Vinodkumar Jain (supra) and Lalita<\/p>\n<p>  Jalan (supra), it is explicitly clear that they are squarely applicable to<\/p>\n<p>  facts of the present case.     When the legal representatives of the<\/p>\n<p>  original allottee withhold the property wrongfully the company is<\/p>\n<p>  entitled to invoke the provisions of Section 630 of the Act so as to<\/p>\n<p>  retrieve the property being withheld wrongfully. The above quoted<\/p>\n<p>  decisions have also laid down that all those who have come in<\/p>\n<p>  possession of the premises with the express or implied consent of the<\/p>\n<p>  employee and have not vacated the premises would be withholding<\/p>\n<p>  the delivery of the property to the company and, therefore, they are<\/p>\n<p>  liable to be prosecuted under Section 630 of the Act as is done in the<\/p>\n<p>  present case.\n<\/p>\n<\/p>\n<p>19. We may also mention that the averment of the learned senior<\/p>\n<p>  counsel appearing for the appellants that the proceedings under<\/p>\n<p><span class=\"hidden_text\">                               Page 17 of 19<\/span><br \/>\n  Section 630 should have been stayed as the civil suit was pending, is<\/p>\n<p>  without any merit in the light of the decision of this Court in <a href=\"\/doc\/21852\/\">Atul<\/p>\n<p>  Mathur v. Atul Kalra,<\/a> reported in (1989) 4 SCC 514, wherein it was<\/p>\n<p>  held that stay of proceedings by the criminal court under Section 630<\/p>\n<p>  of the Act, whenever a suit has been filed would not only lead to<\/p>\n<p>  miscarriage of justice but also render ineffective the salutary<\/p>\n<p>  provisions of Section 630. the said observations are extracted herein<\/p>\n<p>  below:\n<\/p>\n<p>\n     &#8220;16&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..Merely because Respondent      1    had<br \/>\n     schemingly filed a suit before tendering his resignation, it<br \/>\n     can never be said that the civil court was in seisin of a bona<br \/>\n     fide dispute between the parties and as such the criminal<br \/>\n     court should have stayed its hands when the company filed<br \/>\n     a complaint under Section 630. If a view is mechanically<br \/>\n     taken that whenever a suit has been filed before a complaint<br \/>\n     is laid under Section 630, the criminal court should not<br \/>\n     proceed with the complaint, it would not only lead to<br \/>\n     miscarriage of justice but also render ineffective the salutary<br \/>\n     provisions of Section 630.&#8221;\n<\/p>\n<\/p>\n<p>20. Considering the facts and circumstances of the present case, we hold<\/p>\n<p>  that the respondent company was within its jurisdiction to get the<\/p>\n<p>  suit premises vacated under the provisions of Section 630 of the Act.<\/p>\n<p>  We also hold that the learned courts below were justified in arriving<\/p>\n<p>  at a finding that the provisions of Section 630 of the Act are<\/p>\n<p>  applicable to the facts and circumstances of the present case.<\/p>\n<p>  Consequently the courts below also acted within their power and<\/p>\n<p><span class=\"hidden_text\">                              Page 18 of 19<\/span><br \/>\n  jurisdiction in directing for vacation of the suit premises by the<\/p>\n<p>  appellants.   While upholding the said order of the courts below, we<\/p>\n<p>  however observe that the proceedings were initiated in the Small<\/p>\n<p>  Causes Court by filing a suit which is pending as of now. There was<\/p>\n<p>  an interim order passed in the said suit directing for maintenance of<\/p>\n<p>  status quo. Since we have held that the provisions of Section 630 of<\/p>\n<p>  the Act are applicable to the present case, we hold that the directions<\/p>\n<p>  of the court below in this case would be implemented subject to the<\/p>\n<p>  condition that if the aforesaid suit is decided in favour of the<\/p>\n<p>  appellants, the appellants shall be entitled to a order of restitution, if<\/p>\n<p>  so directed, in accordance with law and that such an order shall be<\/p>\n<p>  given effect to in accordance with law.\n<\/p>\n<\/p>\n<p>21.In terms of the aforesaid observations and directions, the present<\/p>\n<p>  appeal is dismissed.\n<\/p>\n<p>                                                          &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..J.\n<\/p>\n<p>                                                                [S.B. Sinha]<\/p>\n<p>                                                        &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;J.\n<\/p>\n<p>                                                    [Dr. Mukundakam<br \/>\nSharma]<\/p>\n<p>New Delhi<br \/>\nFebruary 13, 2009<\/p>\n<p><span class=\"hidden_text\">                               Page 19 of 19<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Gopika Chandrabhushan Saran &amp; Anr vs M\/S Xlo India Ltd.&amp; Anr on 13 February, 2009 Author: . M Sharma Bench: S.B. Sinha, Mukundakam Sharma IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO.295 OF 2009 (arising out of SLP (Crl.) No. 4685 of 2008) Gopika Chandrabhushan Saran &amp; [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-54398","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Gopika Chandrabhushan Saran &amp; Anr vs M\/S Xlo India Ltd.&amp; Anr on 13 February, 2009 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/gopika-chandrabhushan-saran-anr-vs-ms-xlo-india-ltd-anr-on-13-february-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gopika Chandrabhushan Saran &amp; 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