Gurdev Singh, J. - (1.) THIS order will dispose of two criminal revision petitions Nos. 747 and 807 of 1962, in which the common question of law arising for consideration is: Whether Section 630 of the Companies Act (1 of 1956) pro -tanto repeals Section 409 of the Indian Penal Code so far as it relates to the offence of criminal breach of trust committed by any officer or employee of a company? The matter has arisen in the following manner: On 14th July, 1961, Dr. Diwan Singh, a shareholder of Messrs Globe Rubber Works (Private) Limited, Jullundur, made a complaint to the Superintendent of Police of that place alleging that the present Petitioner, Avtar Singh, the Factory Manager and a shareholder of the said company, had cheated him of Rs. 30,000 and entering into a conspiracy with other persons committed criminal breach of trust in respect of certain property belonging to the company. After investigation, the police put in three separate challans against the Petitioner under Sections 409, 409/120 -B and 420 of the Indian Penal Code in the Court of the Additional District Magistrate, Jullundur. At the commencement of the proceedings in the two cases relating to offences under Sections 409 and 409/120 -B of the Indian Penal Code, the Petitioner objected to his trial contending inter alia that the offence of criminal breach of trust, alleged to have been committed by him in his capacity as Factory Manager of the company, fell under Section 630 of the Companies Act, 1956, which, being a provision contained in a Special Act enacted long after the Indian Penal Code was brought on the statute book, protanto repealed Section 409 of the Indian Penal Code so far as it related to offences committed by employees and officers of a company. It was further urged that as a necessary consequence neither the police could investigate into that offence in view of the provisions of Sections 235 to 251 of that Act, nor was the Court competent to take cognizance of the offence except on a complaint made by the Registrar of Companies as laid down in Section 621 of the Companies Act. These objections having been repelled both by the trial Court and the Sessions Judge, before whom a petition for revision was filed, the Petitioner has come to this Court challenging the decision of the Courts below that his trial for offences under Sections 409 and 409/120 -B of the Indian Penal Code could proceed.
(2.) THE provision relating to offences under the Companies Act are contained in Sections 621 to 631 of that Act. Section 630, headed as "Penalty for wrongful withholding of property", is in the following words: 630 (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 authorized 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. This offence as well as other offences under the Companies Act have been declared to be non -cognizable by Section 624 of the same Act. So far as the procedure for the trial of these offences is concerned, Section 621, Sub -section (1) of the Act lays down that, except where the prosecution is by a company or any of it's officers, No Court shall take cognizance of any offence against this Act (other than and offence with respect to which proceedings are instituted under Section 545), which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf.
(3.) SECTION 624 -A of the Act contemplates the appointment of the Company Prosecutors by the Central Government for the conduct of prosecutions arising out of the Act. It is thus obvious that if the Petitioner was prosecuted under Section 630 of the Companies Act, the Court could not take cognizance of the case against him merely on a police report, nor could the police investigate into the matter, the offence being non -cognizable. It is further evident that on conviction under Section 630 of the Companies Act, the maximum punishment to which the Petitioner would be liable is a fine of Rs. 1,000 only and no imprisonment. On the other hand, if an offence under Section 409 of the Indian Penal Code is proved against him, he can be sentenced to ten years' rigorous imprisonment besides being liable to fine without any limit. There can thus be no doubt that if the Petitioner is not prosecuted under Section 630 of the Companies Act, but tried for an offence under Section 409 of the Indian Penal Code, he would be at a great disadvantage.;