Madhya Pradesh High Court
Beharilal Gupta And Anr. vs Binod Mills Ltd. on 1 October, 1987
Equivalent citations: [1988]64COMPCAS117(MP)
JUDGMENT K.L. Srivastava, J.
1. This is an application under Section 482 of the Criminal Procedure Code, 1973, for quashing the criminal complaint under Section 630 of the Companies Act, 1956, filed against the present petitioners and one Rampal Gupta (Vide Criminal Case No. 1845 of 1987 of the C. J. M. Ujjain).
2. Circumstances giving rise to this petition are these. The said Rampal Gupta, who is the uncle of petitioner No. 1 and the husband of petitioner No. 2, was the executive director of the non-applicant-company. In that capacity he had been allotted the bungalow in question situate at Ujjain. After he had resigned from that office, the aforesaid complaint under Section 630 of the Companies Act, 1956, has been filed on the ground that he did not vacate the bungalow even after the acceptance of his resignation.
3. The contention of the petitioners' learned counsel is that Section 630 of the Companies Act in terms permits filing of a complaint by the company only against the office-bearer or employee, and as the present petitioners are only relatives of the erstwhile executive director, the complaint against them is misconceived in law.
4. The contention of learned counsel for the non-applicant is that the present petitioners are actively abetting the commission of the offence by Rampal Gupta and can be proceeded against under Section 630 of the Companies Act.
5. The point for consideration is whether the application deserves to be allowed.
6. Section 630 of the Companies Act is in these terms :
"630. 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 one 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."
7. Learned counsel for the petitioners contended that a plain perusal of the provision extracted above shows that a person who is not an an officer or an employee, whatsoever be the nature of the offence, cannot be subjected to prosecution thereunder by the company.
8. Shri Chitale's contention is that Section 630 of the Companies Act has to be so interpreted as not to defeat the very purpose behind it and, therefore, those abetting the offence under Section 630 of the Act must be held liable for prosecution thereunder along with the officer or the employee concerned.
9. On a careful consideration, I find that in view of the express terms of the provision extracted above, the contention of the non-applicant's learned counsel is wholly devoid of merit.
10. As the provision embodied in Section 630 of the Companies Act does not contemplate prosecution of the petitioners thereunder, the proceedings in question so far as they relate to them deserves to be dropped and in exercise of the inherent powers under Section 482 of the Criminal Procedure Code, 1973, are accordingly ordered to be dropped.