ION Special Leave A Petition CRL  No 1765 of 1987 From the Judgment and order dated 8971987 of the Bombay High Court in WP No 332 of 1987
VN Ganpule for the Petitioner
Soli J Sorabjee KJ John and AK Desai for the Respondents
The Judgment of the Court was delivered by SEN J
The by section 630 enacts 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 D 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 F 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
 The only question involved in this special leave petition is as to the scope and effect of sub section
1 of section 630 of the Act
The controversy is as to the meaning of the term officer or employee  used in sub s1 of section 630 and as to the meaning of the words any such property  in cl
b thereof and there is a conflict of opinion between the High Courts of Calcutta and Bombay on the question
On a literal construction of the term officer or employee  occurring in sub section
1 of section 630 of H 172 the Act the High Court of Calcutta in Amritlal Chum vs Devi Ranjan Jha  Anr held that it refers only to the existing officers and employees of a company
It also held that the words any such property  in section 630lb relate to property specified in cl
a viz property of a company wrongfully taken possession of by a present officer or employee of the company
The High Court of Bombay on the other hand has placed a beneficent construction on the provisions contained in section 630 and according to it the term officer or employee  in sub section
1 of section 630 must be interpreted to mean not only the present officers and employees of a company but also to include past officers and employees of the company
It is also of the view that the words any such property  in ck b qualify the words any property of a company  appearing in cl
That has been the consistent view taken by the High Court of Bombay in a series of cases
See Harkishan Lakhimal Gidwani vs Achyut Kashinath Wagh  Anr  Govind T Jagtiani vs Sirajuddin section Kazi  Anr  which have since been followed in a series of cases referred to by the learned Single Judge Ashok Agarwal J
The issues involved in the special leave petition are of considerable importance to the corporate sector as many of the business organisations both in the public as well as the private sector are required to provide residential accommodation to their officers and employees as a condition of their service to attract better talent and have of necessity to purchase residential flats in multi storeyed buildings in large cities and towns for the use of such officers and employees during the course of their employment and the question is whether the provisions contained in sub section
1 of section 630 which provide for the launching of a prosecution against an officer or employee of a company for wrongful possession of such property under cls
a and b of sub section
1 of section 630 and for the recovery of such property by the issue of process under sub section 2 also extends to past officers and employees of the company and whether the Court trying the offence has the power to issue a process under sub section
2 against such officer or employee
At the conclusion of the hearing we had by a short order dismissed the special leave petition and held that the view expressed by the learned Single Judge following the earlier decisions of the High Court in Harkishan Lakhimal Gidwani and reiterated in Govind T Jagtiani was to be preferred to the view to the contrary expressed by the High Court of Calcutta in Amritlal Chum
As the respondent Shipping Corporation of India a public sector undertakings was in dire need of the flat in question which is situate in a posh locality like the Cuffe Parade in 173 Bombay for the use of its senior executive we could not accede to the request of the learned counsel for the petitioner to refer the case to a bench of three judges and heard learned counsel for the parties at quit some length on August 271987 and dismissed the special leave petition
The reasons therefor follow
At the very threshold it is necessary to set out a few facts
The petitioner Baldev Krishan Sahi was an Under Secretary to the Government of India in the Ministry of Shipping  Transport and on May 21 1974 accepted employment as Joint Manager in the Mogul Line Limited a Government of India undertaking after obtaining release from government service
He was first allotted a service quarter
In 1975 the company purchased a spacious flat being flat No 151 in Jolly Maker Apartment III at 119 Cuffe Parade and the petitioner being the senior most executive was allotted the flat for his residence
The petitioner retired from the service of the company on or about September 30 1984
Prior to that ie On September 26 1984 he addressed a letter requesting the company to permit him to continue to live in the company s premises during the period of his accumulated leave after his retirement ie for a period of six months undertaking to vacate the flat as early as possible
It appears that the company on humanitarian grounds acceded to this request and permitted the petitioner to stay on in the company s flat for six months after his retirement and in accordance with the company s rules he was required to pay compensation for the use of the premises
After the expiry of the said period of six months the company addressed a letter dated April 26 1985 requesting the petitioner to vacate the premises stating that if he failed to do so he would be liable to pay higher compensation as per the company s rules
Since the petitioner failed to vacate the flat the company initiated proceedings for his eviction under the Public Premises Eviction of Unauthorised occupants Act 1971
The Estate officer by order dated December 2 1985 directed the eviction of the petitioner
The petitioner carried an appeal to the City Civil  Sessions Court Bombay but the same was dismissed by the Principal Judge City Civil Court by his order dated January 16 1986
He then preferred a revision to the High Court and the High Court by its order dated January 28 1986 allowed the same set aside the eviction order and directed the Estate officer to give a personal hearing to the petitioner
Instead of availing of that opportunity the petitioner on March 3 1986 moved the High Court by a petition under article 226 of the Constitution and obtained ad interim stay of the proceedings before the Estate officer
A few days thereafter ie On March 7 1986 the petitioner instituted a suit being Civil Suit No 174 138286 in Small Causes Court Bombay seeking a declaration that he was a tenant of the disputed flat which is now pending
In view of this the company was constrained to lodge a complaint against the petitioner under section 630 of the Act in the Court of the Additional Chief Metropolitan Magistrate 37th Court Esplanade Bombay alleging that he was wrongfully withholding the flat in question which had been given to him for his residence during the period of his employment and and thereby committed an offence punishable under section 630
The learned Magistrate by his order dated May 22 1986 took cognizance of the complaint against the petitioner and directed issue of process
On June 30 1986 the company merged with the Shipping Corporation of India and all its assets and liabilities were taken over by the Corporation
The Corporation in the counter affidavit interalia has pleaded that there is acute shortage of housing accommodation in the Metropolitan City of Bombay and it becomes necessary for the Corporation with a view to attract good talent to provide suitable housing accommodation to its officers and employees and that due to acute financial liquidity it is not possible for the Corporation to buy property in Bombay for this purpose
It is further pleaded that the petitioner was given the flat for his residence during the period of his employment and that he was bound to vacate the same after his retirement
It is asserted that the petitioner with a dishonest intention is wrongfully with holding the flat and has instituted false and frivolous proceedings with the ulterior object of protracting and delaying the eviction proceedings
We are informed that the petitioner has been deliberately and dishonestly withholding the flat covering an area of 1750 square feet in Cuffe Parade which is a posh area valued at approximately Rs30 lakhs and putting it to his own use contrary to the terms of his employment
The first and foremost argument of learned counsel for the petitioner is that the provision contained in section 630 of the Act is a penal provision and therefore must be subject to a strict construction and there is no room for intendment
It is submitted that on a true construction the scope and effect of the section was limited to such property of the company which was wrongfully obtained by an officer or employee of the company
Emphasis was placed upon the words any such property  in cl
b of sub section
1 for the contention that cl
b does not stand by itself but is inter connected with cl
a and therefore both clauses a and b must be read together
In essence the submission is that sub section
1 of section 630 of the Act makes it an offence where any officer or employee of a company wrongfully withholds possession of 175 such property of the company
Secondly it is contended that the legislature never intended to include past officers and employees of a company within the ambit of section 630 of the Act which provides for prosecution of an officer or employee of a company for wrongfully withholding the property of the company inasmuch as it has used different languages where it was so intended namely in sections 538 and 545
The entire argument of the learned counsel is based upon the judgment of the High Court of Calcutta in Amritlal Chum s case
We are afraid we find it difficult to subscribe to the narrow construction placed by the High Court of Calcutta on the provision contained in sub section
I of section 630 of the Act which defeats the very purpose and object with which it had been introduced
The beneficent provision contained in section 630 no doubt penal has been purposely enacted by the legislature with the object of providing a summary procedure for retrieving the property of the company a where 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
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 cl
a namely where an officer or 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 cl
a and although it primarily refers to the existing officers and employees it may also take in past officers and employees
In contrast cl
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 176 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 cl
It would be noticed that cl
b also makes 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
The High Court of Calcutta in Amritlal Chum s case obviously fell into an error in seeking to curtail the ambit of section 630lb by giving a restrictive meaning to the terms officer or employee  which must take its colour from the context in which it appears
The whole object of enacting sub section
1 of section 630 is the preservation of the property of a company by the creation of two distinct offences by clauses a and b which arise under different sets of circumstances and it would be rendered nugatory by projecting cl
a into cl
There is also no warrant for the construction placed by the High Court of Calcutta on the words any such property  occurring in cl
b as applicable to such property of a company possession of which is wrongfully obtained by an officer or employee of the company ie refers to the whole of cl
According to the plain construction the words any such property  in cl
b relate to any property of a company as mentioned in cl
Section 630 of the Act plainly makes it an offence if an officer or employee of the company who was permitted to use any property of the company during his employment wrongfully retains or occupies the same after the termination of his employment
By a curious process of reasoning the High Court of Calcutta in Amritlal Chum s case held that section 630 of the Act applies only to the existing officers and employees and not to those whose employment has been terminated
In somewhat similar facts an officer of Messrs Jardine Hendersons Limited who had been placed in possession of a furnished flat in premises No 27 Ballygunj Park Calcutta as a condition of his service wrongfully retained possession thereof after ceasing to be an officer of the company
The question was whether he had thereby committed an 177 Offence punishable under section 630 of the Act
NG Chaudhuri J speaking for himself and GC Chatterjee J held that the opening words of sub section
1 of section 630 namely if any officer or employee of a company  qualify the acts of delinquency  specified in clauses a and b thereof
He further held that the High Court of Bombay was in error in laying down in Govind T Jagtiani s case that for purposes of prosecution cl
a of section 6301 was referable to existing officer or employee of a company while cl
b was wide enough to include former or past officer or employee of the company inasmuch as on a plain reading of the section the two clauses do not permit different interpretations as suggested
Further whenever the framers of the law in their wisdom thought it proper to bring within the mischief of the provisions of the Act former officers or employees of a company they did not hesitate to do so and they expressly legislated
In particular the learned judge referred to section 538 which provides for prosecution for offences by officers of companies in liquidation and uses the expression a past or present officer of a company etc  as also section 545 which provides for prosecution of delinquent officers and members of a company during the course of winding up and uses the words any past or present officer etc  Upon that basis he observed that there was no reason to give a twisted and laboured interpretation to the provisions of section 630 of the Act which its plain reading does not permit
The learned Judge also referred to the words any such property  in cl
b as taking in the property mentioned in cl
a ie property wrongfully obtained
The reasoning of the learned Judges does not bear scrutiny and renders cl
b of section 630 l wholly redundant
It is the wrongful withholding of such property meaning the property of the company after termination of the employment
which is an offence under section 630lb of the Act as rightly pointed out by VS Kotwal J in Harkishan Lakhimal Gidwani vs Achyut Kashinath Wagh supra
The facts were also identical as here
The petitioner there was the General Manager of a company known as the English Electrical Company of India Limited a company incorporated under the having its registered office at Calcutta
He had been allotted the premises of a flat approximately 3500 square feet in area located at Mayfair Gardens Little Gibbs Road Bombay
He had been inducted into the flat only by virtue of his capacity as the General Manager of the company s branch office at Bombay but the company allowed him to retain the same on humanitarian grounds for a short period after his retirement to enable him to find alternative accommodation
This humanitarian and charitable consideration shown by the company was reciprocated by the petitioner by adopting H 178 an adamant attitude and he declined to vacate the same on one pretext or another
The question was whether such wrongful retention of the flat amounted to an offence under section 63 of the Act
The Court repelled the contention that section 630 of the Act applies only to the existing officers and employees of the company and not to former officers and employees and that the phrase any such property  used in cl
b even though cls
a and b are separated by the word or  which must in the context in which it appears be read as and  and so construed must mean withholding of property wrongfully obtained by an existing officer or employee
Kotwal J
On a careful analysis of section 630 held that the provisions of the section apply not only to the present officers and employees of the company but also to past officers and employees and observed It is held that the features and deductions which flow logically and inescapably on an analysis of section 630 are that i Clause a of the section is self contained and independent of cl
b with the capacity of creating penal liability 4 embracing the case of an existing employee or officer of the company
ii Clause b is equally independent and distinct from cl
a as regards penal consequences squarely covering the case of a past employee or officer
iii The entitlement of an officer to the property of the company is contingent on the right and capacity of the officer by virtue of his employment which is transformed into the actual possession of the property and the duration of such right would be co terminus with the terms of employment
 In Govind T Jagtiani vs Sirajuddin section Kazi supra Kanade J fol lowed the critical analysis of section 630 made by Kotwal J as above and observed that the entitlement of an officer to the property of the company and the duration of such right would be co terminus with the terms of employment and the right would stand extinguished with the termination to the employment giving rise to an obligation to hand over the property back to the company and observed If the property is held back the retained possession would amount to wrongful withholding of the property of the company
While the existence of the capacity right and possession would be during employment the withholding may be even after the termination of the employment and though the possession as it precedes the act of retention or withholding may be rightful in the past affording an 179 Opportunity to withhold the withholding may be wrongful as in the present case
 The learned Judge Ashok Agarwal J observes that that has been the consistent view of the High Court and has referred to the subsequent decisions of Khatri j J and Kurdukar J
In our considered opinion the construction placed by the High Court on the provisions contained in s6301 is the only construction possible
We accordingly uphold the view of the High Court of Bombay that the terms officer or employee  of a company applies not only to existing officers or employees but also to past officers or employees if such officer or employee either a wrongfully obtains possession of any property or b having obtained such property during the course of his employment withholds the same after the termination of his employment
The decision to the contrary of the High Court of Calcutta in Amritlal Chum s case does not lay down good law and is overruled
In the result the special leave petition must fail and is dismissed with costs
The petitioner is given one month s time to vacate the premises failing which the respondents will be at liberty to take such proceedings as the law provides
We direct the Additional Chief Metropolitan Magistrate 37th Court Esplanade Bombay to proceed with the trial of Crl
Case No 76S1986 and dispose it of as expeditiously as possible and in any event not later than four months from today
PSS Petition dismissed


Summary:
Sub section  l  of section 630 of the provides for launching of prosecution against an officer or employee of a company who a wrongfully obtains possession of any property of a company or b having any such property in his possession wrongfully withholds or knowingly misapplies the same
The petitioner who was given a flat by the company for his residence during the period of his employment did not vacate it on his retirement
He was granted six months time on humanitarian grounds upon his undertaking to comply with
Upon his failure to vacate the premises the company lodged a complaint against him under section 630 of the Act for wrongful withholding of its property
The Magistrate took congnizance of the complaint and directed issue of process
Dismissing the writ petition filed by him under article 227 of the Constitution read with section 482 Cr
PC seeking to quash the proceedings the High Court following its consistent view in a series of cases that the term officer or employee  in sub section
1 of section 630 must be interpreted to mean not only the present officer or employee of company but also to include past officers and employees of the company and that the words any such property  in cl
b qualify the words any property of a company  appearing in cl
a held that the case does not call for interference
169 In the special leave petition it was contended for the petitioner that the provision contained in section 630 of the Act is a penal provision and therefore must be subject to a strict construction and there is no room for intendment that the term officer or employee  occurring in sub section
1 of section 630 refers only to the existing officers and employees of a company and not the past officers and that cl
b of sub section
I does not stand by itself but is interconnected with cl
a thereof and therefore cl
a and cl
b must be read together and when so read the words any such property  in cl
b do not qualify the words any property of a company  in cl
a and only relate to the property of company wrongfully taken possession of by a present officer
Dismissing the special leave petition  HELD 1
Section 630 of the plainly makes it an offence if an officer or employee of the company who was permitted to use any property of the company during his employment wrongfully retains or occupies the same after the termination of his employment
176F G 21 The term officer or employee  of a company in section 6301 applies not only to existing officers or employees but also to past officers or employees if such officer or employee either a wrongfully obtains possession of any property or b having obtained such property during the course of his employment withholds the same after the termination of his employment
179B C 22 The beneficent provision contained in section 630 of the though penal has been purposely enacted by the legislature with the object of providing a summary procedure for retrieving the property of the company
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
175C E 23 Sub section
1 of section 630 of the Act by clauses a and b creates two distinct and separate offences 1 Where an officer or 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 cl
a 170 and although it primarily refers to the existing officers and employees it may also take in past officers and employees
2 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 authorized 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 cl
Clause b also makes 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 authorized 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
175F H 176A C 3
It is quite evident that clauses a and b are separated by the word or  and therefore are clearly disjunctive
The whole object of enacting the provision is the preservation of the property of a company by the creation of two distinct offences by clauses a andb which arise under different sets of circumstances and it would be rendered nugatory by projecting cl
a into cl
1176C D E 4
According to the plain construction the words any such property  in cl
b relate to any property of a company  as mentioned in cl
It is wrongful with holding of such property meaning the property of the company after termination of the employment which is an offence under section 630lb of the Act
176F 177E F 5
The petitioner given one month s time to vacate the premises failing which the respondents to take such proceedings as the law provides
The Additional Chief Metropolitan Magistrate to proceed with the trial and dispose it of expeditiously
179D E Harkishan Lakhimal Gidwani vs Achyat Kashinath Wagh  Anr  and Govind T Jagtiani vs Sirajuddin section Kazi  Anr  approved
Amritlal Chum vs Devi Ranjan Jha  Anr  overruled 171