Sen, J. - (1.) The Companies Act, 1956 by S. 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 (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 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".
(2.) The only question involved in this special leave petition is as to the scope and effect of sub-s. (1) of S. 630 of the Act. The Controversy is as to the meaning of the term 'officer or employee' used in sub-s. (1) of S. 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-s. (1) of S. 630 of the Act, the High Court of Calcutta in Amritlal Chum v. Devi Ranjan Jha, (1987) 61 Com Cas 211 held that it refers only to the existing officers and employees of a company. It also held that the words 'any such property' in S. 630(l)(b) 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 S. 630 and according to it, the term 'officer or employee' in Sub-s. (1) of S. 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 cl. (b) qualify the words 'any property of a company' appearing in cl. (a). That has been the consistent view taken by the Court of Bombay in a series of cases. See:Harkishan Lakhimal Gidwani v. Achut Kashinath Wagh, (1982) 52 Com Cas 1 Govind T. Jagtiani v. Sirajuddin S. Kazi, (1984) 56 Com Cas 329 which have since been followed in a series of cases referred to by the learned single Judge (Ashok Agarwal, J.).
(3.) 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-s. (1) of S. 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-s. (1) S. 630 and for the recovery of such property by the issue of process under sub-s. (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-s. (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 (1981) Tax LR 2534) (Bom) and reiterated in Govind T. Jagtiani (1984) 56 Com Cas 329) (Bom) was to be preferred to the view to the contrary expressed by the High Court of Calcutta in Amritlal Chum (1987) 61. Com Cas 211). As the respondent Shipping Corporation of India. a public sector undertaking, was in dire need of the flat in question which is situate in a posh locality like the Cuffe Parade in Bombay, for the use of its senior executives, 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 quite some length on August 27, 1987 and dismissed the special leave petition. The reasons therefor follow.;