Wrongful retention of company property continues after termination, and pending service challenges do not bar prosecution under company law.

Section 630 of the Companies Act, 1956 applies to a former employee who continues to retain company accommodation or other company property after termination, because the provision targets wrongful withholding and treats the default as continuing until the property is returned. A pending challenge to the termination order does not by itself suspend or nullify the termination, and service proceedings do not bar prosecution for wrongful retention of company property unless the termination is set aside or stayed by a competent forum. The conviction and related directions were affirmed.

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Issues: (i) whether section 630 of the Companies Act, 1956 applies to a former employee who continues to occupy company accommodation after termination of service; and (ii) whether pendency of proceedings challenging the termination order bars prosecution under section 630.

Issue (i): whether section 630 of the Companies Act, 1956 applies to a former employee who continues to occupy company accommodation after termination of service.

Analysis: Section 630 is intended to prevent wrongful withholding of company property and to secure its speedy return. Its reach is not confined to existing officers or employees. A former employee who had lawfully obtained company property during service, but continues to retain it after termination, falls within the provision. The offence is treated as continuing until the property is delivered back to the company.

Conclusion: The provision applies to the revisionist, and the conviction under section 630 was correctly sustained.

Issue (ii): whether pendency of proceedings challenging the termination order bars prosecution under section 630.

Analysis: A challenge to termination does not suspend or nullify the termination order unless it is set aside or stayed by a competent forum. Proceedings relating to service dispute and prosecution for wrongful withholding of company property are distinct. Pending labour proceedings therefore do not create a legal bar against action under section 630.

Conclusion: The pending labour proceedings did not bar the complaint or the conviction.

Final Conclusion: The revision fails, and the conviction and directions of the courts below stand affirmed.

Ratio Decidendi: Section 630 of the Companies Act, 1956 covers former employees who wrongfully retain company property after termination, and prosecution under that provision is not barred merely because a challenge to the termination is pending.

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