BALDEV KRISHNA SAHI versus SHIPPING CORPORATION OF INDIA LIMITED & ANR.

Citation: [1988] 1 S.C.R. 168 · Decided: 17-09-1987 · Supreme Court of India · Bench: A.P. SEN · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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BALDEV KRISHNA SAHI 
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v. 
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SHIPPING CORPORATION OF INDIA LIMITED & ANR. 
SEPTEMBER 17, 1987 
[A.P. SEN AND B.C. RAY, JJ.] 
Companies Act, 1956: s. 630-Property of company-Wrongful 
withholding of-Penalty for-Officer allotted flat by company-
y 
Refusing to vacate after retirement-Prosecution for-Whether permis-
sible. 
Interpretation of Statutes: Penal provisions-When to be benefi-' 
cently construed. 
Words &·Phrases: Terms 'Officer or employee', 'any property of 
a company' and 'any such property'-Meaning of-Companies Act, 
1956, s. 630. 
Sub-section (1) of s. 630 of the Companies Act, 1956 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 iu his possession wrongfully withholds or 
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knowingly misapplies the same. 
The petitioner who was given a Oat by the company for his resi-
dence 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 s. 630 of 
the Act for wrongful withholding of its property. The Magistrate took 
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congnizance of the complaint and directed issue of process. 
Dismissing the writ petition filed by him under Art. 227 of the 
Constitution read with s. 482 Cr. P.C. seeking to quash the proceed-
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ings, the High Court following its consistent view in a series of cases that 
the term 'officer or employee' in sub-s. (l) of s. 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 
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'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 
H interference. 
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B.K. SAHi v. SHIPPING CORPN. 
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In the special leave petition it was contended for the petitioner 
that the provision contained in s. 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-s. 
(I) of s. 630 refers only to the existing officers and employees of a 
company, and not the past officers, and that cl. (b) of sub-s. (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 wrong-
fully taken possession of by a present officer. 
Dismissing the special leave petition, 
HELD: 1. Section 630 of the Companies Act, 1956 plainly makes 
it an offence if an officer or employee of the company who was permit-
ted .to use any property of the company during·his employment, wrong-
fully retains or occupies the same after the termination of his 
employment. [176F-G] 
2.1 The term 'officer or employee' of a company in s. 630(1) 
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. [I79B-C] 
2.2 The beneficent provision contained in s. 630 of the Com-
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panies Act though penal, has been purposely enacted hy 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 
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and liberal constructiou on the provision in furtherance of the object 
and purpose of the legislation which would suppress the mischief and 
advance the remedy. [I75C-E] 
2.3 Sub-s. (I) of s. 630 of the Act hy clauses (a) and (h) creates 
two distinct and separate offences: (I) Where an officer or employee of G 
a company wrongfully obtains possession of any property of the com-
pany 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 pro

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