Service accommodation retained after termination amounts to wrongful withholding unless protected by a subsisting court order.

Company quarters allotted solely as service accommodation become wrongful to retain after termination of employment unless a subsisting court order protects possession. Mere pendency of labour proceedings or an industrial dispute challenging termination does not, by itself, keep the employer-employee relationship alive for resisting liability under section 630 of the Indian Companies Act, 1956. Section 33 of the Industrial Disputes Act, 1947 afforded no protection on the facts because no legally effective order justified continued occupation. The appellate court therefore erred in treating the disputed termination as sufficient to negate wrongful withholding, and the trial court convictions were restored with direction to hand over vacant possession.

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Issues: Whether employees who continued to occupy company quarters after termination of service could be said to be wrongfully withholding company property under section 630 of the Indian Companies Act, 1956; whether pendency of labour proceedings or an industrial dispute regarding termination prevented prosecution or negatived wrongful withholding; and whether the appellate court was justified in setting aside the conviction.

Analysis: The quarters were allotted only as service accommodation under the terms of the licence agreement, and the occupation was expressly coterminous with employment. Once service ended, the employee lost the contractual right to retain the quarters unless a court order protected possession. Mere pendency of labour proceedings challenging termination did not, by itself, keep the employer-employee relationship alive for the purpose of resisting a section 630 prosecution. Section 33 of the Industrial Disputes Act, 1947 did not assist the respondents, because no material showed any subsisting protective order or any legally effective right to continue in possession. The Court distinguished the authorities relied on by the respondents and held that the appellate court had erred in treating the disputed termination as sufficient to negate wrongful withholding.

Conclusion: The continued occupation of the quarters after cessation of service amounted to wrongful withholding under section 630 of the Indian Companies Act, 1956, and the acquittal could not be sustained.

Final Conclusion: The convictions recorded by the trial court were restored, and the respondents were directed to hand over vacant possession of the quarters within the time granted by the Court.

Ratio Decidendi: Where company accommodation is allotted solely as an incident of employment, continued retention after termination of service is wrongful unless supported by a subsisting judicial order protecting possession; pendency of labour proceedings alone does not defeat liability under section 630 of the Indian Companies Act, 1956.

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