Prima facie Section 630 liability fails where employer-linked accommodation and title issues do not show wrongful retention of company property.

Possession of an employer-linked flat, where accommodation formed a primary service consideration, did not by itself establish a prima facie offence under Section 630 of the Companies Act, 1956. The Court found that the accused had not resigned or joined other employment, the employer itself had treated the employment as ended, and the material did not show wrongful retention of company property. It also noted that the flat had later been purchased by the accused and that the company had no independent right, title, or interest in it. On these facts, the criminal complaint was not fit to disturb the discharge order.

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Issues: Whether the complaint disclosed a prima facie case under Section 630 of the Companies Act, 1956 and the allied penal provisions, or whether the dispute was essentially civil so as to justify discharge.

Analysis: The appellant had been put in possession of the flat under the employment arrangement, and the contractual terms showed that the accommodation was a primary consideration of service. On the facts, the appellant had not resigned or taken up other employment, the company itself had informed him that his employment had ended, and the material did not establish that he was wrongfully withholding property belonging to the company. The Court also noticed that the appellant had subsequently purchased the flat and that the company had no independent right, title, or interest in it. In these circumstances, the criminal complaint did not merit interference with the discharge order.

Conclusion: The order of discharge was justified and the High Court ought not to have interfered.

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