Wrongful withholding of company property can attract a summary remedy, including against ex-employees and heirs, despite pending civil proceedings.

Section 630 of the Companies Act, 1956 is described as a summary remedy for wrongful obtaining and wrongful withholding of company property, including immovable property, and it extends to former employees and persons claiming through them. The provision is stated to operate despite parallel civil proceedings, because it creates a lawful procedure for recovery of company property. The text also notes that a chairman's informal assurance does not bind the company unless authorised by the board or governing instruments, and continued occupation after notice may amount to wrongful withholding. A later civil interim arrangement may affect immediate delivery of possession, but not the earlier wrongful retention.

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Issues: (i) Whether section 630 of the Companies Act, 1956 covers wrongful withholding of a company's immovable property by ex-employees or their legal heirs and whether proceedings under it are a lawful remedy for recovery of such property; (ii) Whether the respondents' continued occupation of the company flat after the employee's death was justified by an alleged assurance of the chairman and by pending civil proceedings, so as to negate wrongful withholding.

Issue (i): Whether section 630 of the Companies Act, 1956 covers wrongful withholding of a company's immovable property by ex-employees or their legal heirs and whether proceedings under it are a lawful remedy for recovery of such property.

Analysis: The provision creates distinct offences for wrongful obtaining and wrongful withholding of company property. It applies not only to existing officers or employees but also to past employees and persons claiming through them. The expression "property" includes immovable property. The section is intended to provide a speedy and summary remedy for retrieval of company property and is quasi-criminal in nature. The remedy under the section is a procedure established by law and cannot be excluded merely because a civil suit is also pending.

Conclusion: The section applies to wrongful withholding of company property, including immovable property, and the company was entitled to invoke it.

Issue (ii): Whether the respondents' continued occupation of the company flat after the employee's death was justified by an alleged assurance of the chairman and by pending civil proceedings, so as to negate wrongful withholding.

Analysis: A chairman has no inherent authority to bind the company by an assurance of this nature unless empowered by the board or the company's governing instruments. The alleged assurance was found to be compassionate in character and not shown to be an authorized corporate act. After notice to vacate, the respondents had no lawful right to retain possession. The later interim order in the civil proceedings did not erase the offence already committed up to that stage, though it affected the power to order immediate delivery of possession under section 630(2).

Conclusion: The respondents wrongfully withheld the flat up to the interim civil order, and their defence based on the chairman's assurance was not accepted as a binding authority of the company.

Final Conclusion: The conviction under section 630 was sustained with modification in punishment, but no immediate order for delivery of possession could be made while the civil court's receiver arrangement continued.

Ratio Decidendi: Section 630 of the Companies Act, 1956 is a summary remedial provision that applies to wrongful withholding of company property by former employees or their heirs, and an unauthorized assurance by a company chairman does not by itself create a binding right to retain possession.

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