TMI Blog2003 (4) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... lding the delivery of the property to the company and, therefore, they are liable to be prosecuted under section 630 of the Act. This will include anyone else who has been inducted in possession of the property by such persons who continue to withhold the possession of the premises as such person is equally responsible for withholding and non-delivery of the property of the company. - CRIMINAL APPEAL NO. 574 OF 2003 - - - Dated:- 16-4-2003 - S. RAJENDRA BABU, DR. A.R. LAKSHMANAN AND G.P. MATHUR, JJ. Ashok H. Desai, Pratik Jalan, Atul Dayal and K.R. Sasiprabhu for the Appellant. Dr. Abhishek Manu Singhvi, Gaurab Banerjee, R.N. Karanjawala, Ms. Nandini Gore, Ms. Meghna Mishra, Mrs. Manik Karanjawala, Arun Pednekar, S.S. Shinde and V.N. Raghupathy for the Respondent. JUDGMENT G.P. Mathur, J. - Leave granted. 2. This appeal has been preferred against the judgment and order dated January 18, 2002 of High Court of Bombay by which the petition preferred by the appellants under section 482 Cr.P.C. and Article 227 of the Constitution was dismissed. The matter has been referred to a three Judge Bench in view of the apparent conflict in the two decisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ully liable to be prosecuted under section 630 of the Act and there is absolutely no ground for either quashing the complaint or the process issued against them. 5. In order to examine the contentions raised by learned counsel for the parties, it will be convenient to set out the provisions of section 630 of the Companies Act, 1956, which read 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 in the articles and authorised 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, 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." 6. The question w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re an officer or employee of a company wrongfully obtains possession of property of the company, or ( b ) where having been placed in possession of any such property during the course of his employment, wrongfully withholds possession of it after the termination of his employment. It is the duty of the court to place a broad and liberal construction on the provision in furtherance of the object and purpose of the legislation which would suppress the mischief and advance the remedy." 7. The Court went on to observe that it is only the present officers and employees who can secure possession of any property of a company and it is possible for such an officer or employee to wrongfully take away possession of any such property after termination of his employment. Therefore, the function of Clause ( a ) though it primarily refers to the existing officers and employees, is to take within its fold an officer or employee who may have wrongfully obtained possession of any such property during the course of his employment, but wrongfully withholds it after the termination of his employment. It was further held that section 630 plainly makes it an offence if an officer or employee of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of para 26 of the report : ". . . we are of the view that the offence under this section is not such as can be said to have consummated once for all. Wrongful withholding, or wrongful obtaining possession and wrongful application of the Company s property, that is, for purposes other than those expressed or directed in the articles of the company and authorised by the Companies Act, cannot be said to be terminated by a single act or fact but would subsist for the period until the property in the offender s possession is delivered up or refunded. It is an offence committed over a span of time and the last act of the offence will control the commencement of the period of limitation and need be alleged. The offence consists of a course of conduct arising from a singleness of thought, purpose of refusal to deliver up or refund which may be deemed a single impulse. Considered from another angle, it consists of a continuous series of acts which endures after the period of consummation on refusal to deliver up or refund the property. It is not an instantaneous offence and limitation begins with the cessation of the criminal act, i.e. with the delivering up or refund of the property. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, by virtue of being family members of the employee or the officer during the employment of the officer or the employee and not on any independent account. They, therefore, derive their colour and content from the employee or the officer only and have no independent or personal right to hold on to the property of the company. Once the right of the employee or the officer to retain the possession of the property, either on account of termination of services, retirement, resignation or death, gets extinguished, they (persons in occupation) are under an obligation to return the property back to the company and on their failure to do so, they render themselves liable to be dealt with under section 630 of the Act for retrieval of the possession of the property." (p. 739) 11. Shri Ashok Desai, learned senior counsel for the appellant has tried to distinguish Smt. Abhilash Vinodkumar Jain s case ( supra ) on the ground that the same related to the case of heirs of a deceased employee. It is urged that in accordance with Hindu Succession Act, Shri Ashok Kumar Jalan, who is the son of late Shri N.K. Jalan would be his legal heir and not the appellants and, therefore, the principle l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been launched and is pending. After taking note of the earlier decisions of this court, which we have referred to above, the Bench recorded its conclusion in the following manner : "We are of the firm opinion that all the family members of an alive "officer" or "employee" of a company cannot be proceeded with and prosecuted under section 630 of the Act. The order impugned does not suffer from any illegality, requiring our interference." 12. The ratio of this case clearly is that the position of legal heirs of a deceased employee who are in possession of the property and are wrongfully withholding the same is different from that of family members of a former or past employee, who is alive and against whom prosecution has also been launched. The view taken is that if a former or erstwhile employee of the company is in possession of the property and is wrongfully withholding to deliver the same to the company after cessation of his employment and a prosecution against him is launched under section 630 of the Act, then his other family members cannot be prosecuted. This case, in our opinion, is not an authority for the propos- ition that such family members of a deceased employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion used by the Legislature in order to carry out the intention of the Legislature. The contention is that section 630 of the Act refers to an officer or employee of a company and being a penal provision, it will be against all canons of interpretation of Statutes to include family members of a former or deceased employee within its fold. Learned counsel has also submitted that the fact that an enactment is a penal provision is in itself reason for hesitating before ascribing to phrases used in it a meaning broader than that they would ordinarily bear and the same should be construed strictly. In view of the contention raised it becomes necessary to examine whether section 630 of the Act is really a penal provision. 15. Section 630 of the Act is in two parts. Clause ( b ) of sub-section (1) thereof lays down that if any officer or employee of a company having any property of the 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, he shall, on the complaint of the company or any creditor or contributory thereof, be punishable with fine which may extend to Rs. 10, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individual. Murder injures primarily the particular victim, but its blatant disregard of human life puts it beyond a matter of mere compensation between the murderer and the victim s family. Those who commit such acts are proceeded against by the State in order that if convicted, they may be punished. Civil wrongs such as breach of contract or trespass to land are deemed only to infringe the rights of the individual wronged and not to injure society in general and consequently the law leaves it to the victim to sue for compensation in the courts. English law, however, has certain features which prevent us drawing a clear line between these two kinds of wrong. First, there are some wrongs to the state and therefore public wrongs, which are nevertheless by law regarded as civil wrongs. A refusal to pay taxes is an offence against the state, and is dealt with at the suit of the state, but it is a civil wrong for all that, just as a refusal to repay the money lent by a private person is a civil wrong. . . ." 17. The purpose of criminal justice is to award punishment. It is a method of protecting society by reducing the occurrence of criminal behaviour. It also acts as a deterren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate was bound to order confiscation of the conveyance used in commission of the offence. Similarly, in State of Maharashtra v. Natwarlal Damodardas Soni AIR 1980 SC 593, with reference to section 135 of the Customs Act and Rule 126-H(2)( d ) of Defence of India Rules, the narrow construction given by the High Court was rejected on the ground that they will emasculate these provisions and render them ineffective as a weapon for combating gold smuggling. It was further held that the provisions have to be specially construed in a manner which will suppress the mischief and advance the object which the Legislature had in view. The contention raised by learned counsel for the appellant on strict interpretation of the section cannot therefore be accepted. 19. Even otherwise as shown earlier, the wrongful withholding of property of the company has been made punishable with fine only. A substantive sentence or imprisonment can be awarded only where there is a non-compliance of the order of the Court regarding delivery or refund of the property. Obviously, this order would be passed against a specific person or persons whether an employee, past employee or a legal heir or family mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mental rights of the citizens under article 19(1). What the judicial decision purports to do is to decide the controversy between the parties brought before the Court and nothing more. If this basic and essential aspect of the judicial process is borne in mind, it would be plain that the judicial verdict pronounced by Court in or in relation to a matter brought before it for its decision cannot be said to affect the fundamental rights of citizens under article 19(1)." (p. 11) 21. In Smt. Triveniben v. State of Gujarat [1989] 1 SCC 678, a Constitution Bench while considering the validity of death sentence, held that it is well- settled that a judgment of Court can never be challenged under Article 14 or 21 of the Constitution and, therefore, a judgment of the Court awarding the sentence of death is not open to challenge as violating Articles 14 and 21 of the Constitution and the only jurisdiction which could be sought to be exercised by a prisoner for infringement of his rights can be to challenge the subsequent events after the final judicial verdict is pronounced and it is because of this that on the ground of long or inordinate delay, the condemned petitioner could approa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated to be unreasonable or irrational or unfair so as to attract the rigour of Article 21 of the Constitution. If the object of the provision of section 630 of the Act is borne in mind, the expansive meaning given to the expression employee or anyone claiming through him will not be unrelated to the object of the provision nor is it so far fetched as to become unconstitutional. Therefore, with profound respects the view expressed in J.K. (Bombay) Ltd. s case ( supra ), in our opinion is not correct and the view expressed in Smt. Abhilash Vinodkumar Jain s case ( supra ) is justified and should be accepted in interpreting the provision of section 630 of the Act. 23. If an erstwhile or former employee is prosecuted under section 630 of the Act on account of the fact that he has not vacated the premises and continues to remain in occupation of the same even after termination of his employment, in normal circumstances it may not be very proper to prosecute his wife and dependent children also as they are bound to stay with him in the same premises. The position will be different where the erstwhile or former employee is himself not in occupation of the premises either on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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