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of <h1>Court dismisses application to quash proceedings under Companies Act section 630 - employee liable for not vacating company property</h1> <h3>Bishan Singh Versus State of Uttar Pradesh</h3> Bishan Singh Versus State of Uttar Pradesh - [2006] 72 SCL 224 (ALL.) Issues:- Application to quash proceedings of Complaint Case under section 630 of the Companies Act- Termination of services and withholding of property by the applicant- Dispute of civil nature versus criminal liability under section 630 of the Companies ActAnalysis:1. The judgment deals with an application filed under section 482 of the Criminal Procedure Code to quash the proceedings of a Complaint Case under section 630 of the Companies Act. The applicant, a former employee, was alleged to have wrongfully withheld company property after his services were terminated, leading to the initiation of legal action against him.2. The applicant's counsel argued that the termination of the applicant's services was under dispute and pending before the Labour Commissioner, Ghaziabad. It was contended that the opposite party had no authority to file a complaint under section 630 of the Companies Act, as the matter was of a civil nature. The counsel further argued that the applicant's continued possession of the company quarter did not constitute a criminal offense.3. In response, the opposite party's counsel and the Assistant Government Advocate asserted that the applicant, upon termination, was obligated to vacate the company quarter. Failure to do so rendered him criminally liable under section 630 of the Companies Act. They supported the Magistrate's decision to summon the applicant and opposed the quashing of proceedings.4. The judgment extensively discussed the provisions of section 630 of the Companies Act, emphasizing that an officer or employee wrongfully withholding company property could face prosecution based on a complaint by the company. The court highlighted that even if the applicant's case was pending before the Labour Commissioner, he had no right to retain possession of the company property post-termination.5. Legal precedents such as the cases of Jagdish Chandra Nijhawan v. S.K. Saraf, Baldev Krishna Sahi v. Shipping Corpn. of India Ltd., and Sunita Bhagat (Mrs.) v. Voltas Ltd. were cited to support the opposite party's argument. These cases established the obligation of employees or officers to return company property upon termination, failing which they could be prosecuted under section 630 of the Companies Act.6. The judgment concluded that the applicant's failure to vacate the company quarter post-termination made him liable under section 630 of the Companies Act. It dismissed the application to quash the proceedings, stating that there was no legal basis to do so. The court upheld the summoning order and deemed the application devoid of merit, leading to its dismissal.
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