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CASE NO.: Appeal (crl.)  712 of 2005

PETITIONER: SHUBH SHANTI SERVICES LTD.

RESPONDENT: MANJULA S.AGARWALLA & ORS

DATE OF JUDGMENT: 11/05/2005

BENCH: P. VENKATARAMA REDDI & P.P. NAOLEKAR

JUDGMENT: J U D G M E N T

(Arising out of SLP (Crl.) No. 4247 of 2004)

P.P. NAOLEKAR J.                          Leave granted.

       This appeal is directed against the judgment and order dated  8.4. 2004  passed by the High Court of Bombay  in Crl. Appeal  No. 48 of 2000 acquitting the respondents Mrs. Manjula  S.  Agarwalla, Respondent No.1  and Ms. Anisha S. Agarwalla,  Respondent No.2  of the offence punishable  under Section 630  of the Companies Act,1956.         The complainants, viz., Herdillia Chemicals Ltd., non- chemical business was de-merged and vested in Shubh Shanti  Company Ltd., by a Scheme of arrangement, approved by the  Bombay High Court. Hence,, M/s. Shubh Shanti Services  Limited  came to be substituted in place of M/s. Herdillia  Chemicals  Ltd.  as appellants  during the pendency of the  appeal before High Court.         Brief facts of the case are that the complaint was filed  by the  Company on 13.1.95 on the allegation that one Shri Suresh  Chander Agawalla, husband of  Respondent No.1 and father of  respondent No.2 was employed with the appellant Co. since  1971 till his death on 2nd of November 1992.  He was appointed   Managing Director  of the appellant Co. for a period of five  years with effect from 15th of June 1988.  Flat No.25 in a  building called "Sonmarg" at 7B,  Jagmohandas Marg,  Mumbai, owned and possessed by the appellant-company was  allotted to late Shri S.C. Agarwalla on 10th of March 1975 to be  used for residential purpose for himself and members of his  family during the period he was in service  of the appellant.   Board of Directors had extended the term of Shri S.C.  Agarwalla as Managing Director of the Company upto 14th of  June 1993.  However, unfortunately, on 2nd of November 1992,  Shri S.C. Agarwalla died when he was whole time Managing  Director of the appellant-company.  Respondents 1 and 2 were  residing with him in Sonmarg flat being members of his family.   Even after the death of Shri Agarwalla, they continued to  occupy the said flat.  It was alleged in the complaint that after  the death of Shri Agarwalla, respondents were bound to vacate  and handover the vacant possession of the said flat to the  appellant-company but because of the critical  health conditions  of Respondent No.1, the appellant, on humanitarian grounds,  did not take any step  to get the flat vacated for some time .   The appellant-company by its letter dated 28th of December  1993 demanded possession of the flat within 45 days of the  receipt of the letter  from the respondents.  In response,

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Respondent No.1 by her letter dated 7th February  1994,  addressed to the Secretary & Financial Controller of the  appellant-company informed the appellant-company that she  was staying in the flat because the Chairman had asked her to  do so till the flat in another building was made available to her.   The respondent by a subsequent communication addressed to  the Chairman, referred to the assurance given to her that she  would not be called upon to vacate the Sonmarg flat till the sale  of Blue Heaven flat is executed as per separate agreement dated  10th of February 1978, entered into between Shri S.C.  Agarwalla and the Company for purchase of Blue Heaven flat   and informed that her late husband had the right to purchase the  Blue Heaven flat and that the assurance given by the Chairman  should be adhered to, by the appellant, to permit her to remain  in possession of the Sonmarg flat till the sale deed is executed  in respect of Blue Heaven flat.         The appellant Co., thereafter,  again by a registered letter  dated 9th of November1994, addressed to both the respondents,  called upon them to vacate the flat and handover  the  possession. By this communication, the appellant also  specifically conveyed to the first respondent about its decision   that Blue Heaven flat cannot be sold and transferred.  As the  respondents did not comply with the request made by the  appellant, a complaint was filed in the Court of Addl. Chief  Metropolitan Magistrate, 40th Court at Girgaum, Bombay under  Section 630 of the Companies Act, 1956  alleging that  respondents being the legal heirs of late Shri S.C. Agarwalla  who was allotted the property of the company for residential  purpose for himself and members of his family whilst he was in  service of the said company, have wrongfully withheld and  continued to withhold wrongfully by refusing to vacate and  handover possession thereof.  Thus, they have committed an  offence, punishable under Section 630 of the Companies Act  read with Section 109 of the Indian Penal Code.         From the case  set up by the respondent and the evidence led,  the case of the respondents is that there were discussions  between them and the Chairman of the Board of Directors of  the appellant and the Chairman, Board of Directors has assured  them to continue to stay in Sonmarg flat until such time as the  contract in respect of  sale of Blue Heaven flat was  implemented and therefore the possession of the respondent of  Sonmarg flat is not unauthorized or wrongful.         Before complaint was filed, a Civil Suit No.7 of 1995 was  filed by Respondents 1 and 2  against appellant company on  23.12.1994 in the High Court for specific performance of the  contract dated 10th of February 1978 for sale, transfer and to   hand over   possession of Flat No.33, 3rd Floor, Blue Heaven  Cooperative Housing Society Ltd., Mount Pleasant Road,  Bombay. In the suit further relief claimed is that the defendants  be ordered and decreed not to dispossess or interfere with the  occupation and residence of the 1st plaintiff and her family in  Sonmarg flat, Napean Sea Road, Bombay until such time as the  Defendant company transfer and handover vacant possession of  aforesaid Blue Heaven flat. In  the said civil suit the High Court  on 10th of January 1995 passed an interim  order "counsel for  the defendant has made a statement that the plaintiff shall not  be dispossessed from the premises in question except by due  process of law.  The statement is accepted".           Subsequent to the complaint filed under Section 630,  appellant company has also filed a suit in the High Court (Suit  No. 2391 of 1997) for possession of Sonmarg flat and other  reliefs against the respondents.  The High Court by its order on  16th of November 1998 passed an order for appointment of  the  Court Receiver for Flat No.67-B, 25 Sonmarg, Nepean Sea  Road, Mumbai and Receiver was placed in possession of the

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flat.  It was agreed between the parties that Respondent No.1  was in possession of the flat.  The High Court directed that the  Court Receiver shall take symbolic possession of the flat from  Respondent No.1.  The Court Receiver shall appoint  Respondent No.1 as his agent to be in actual possession of the  flat during the pendency of the suit.  The Court Receiver  shall  fix the amount of royalty payable by Respondent No.1 for  occupation of the flat.  While fixing  the royalty,  the Court  Receiver shall take into consideration of the contentions urged  by both the parties.  Pending fixation of the amount of royalty  by the Court Receiver, an ad hoc amount of royalty is fixed at   Rs.25,000/- per month.  The respondent shall deposit the arrears   of royalty at the ad hoc rate from June 1997 to November 1998.   By this order the possession of the Respondent No.1 was  recognized of the Sonmarg flat and the Court Receiver was  given symbolic possession of the flat and possession of the  Respondent No.1 was to be treated as the agent of the Receiver  to remain in actual possession of the flat during the pendency of  the suit.           After issuance of summons  both parties led evidence. The  Magistrate dismissed the complaint holding that the  respondents are in possession of Sonmarg flat  as they have not  handed over possession of the Blue Heaven flat for which they  were required to file a suit for specific performance.  The  respondents are under bonafide impression  that they have right  to continue in the said flat in Sonmarg till they get possession   of the flat in Blue Heaven as per assurance given by Chairman  of the Company and thus it cannot be said that they have  wrongfully withheld the property of the company.  It was  further held that the  matter is pending consideration before the  civil court and, therefore,   the Court cannot pass order of  restoration of possession to the appellant Co. till rights of the  parties   are  ascertained.           The appellant-company preferred an appeal before the High  Court.  The High Court dismissed the appeal holding that the  respondents have made out a bona fide, probable and plausible  defence that they were allowed to occupy the flat at Sonmarg  by the Chairman of the Board of Directors till the flat in Blue  Heaven  is made available to them.  Respondents shall  ultimately succeed in the suit for specific performance or not is  another matter.  The respondents have made out a case that an  assurance was so given and thus the appellant has failed to  prove that the respondents are in wrongful possession of the flat  in Sonmarg.  Apart from this, the High Court has further held  that a suit for recovery of the possession of the flat in Sonmarg  filed by the appellant-company, a Court Receiver  has been  appointed  and the respondent has been appointed as an agent of  the Court Receiver and therefore also it cannot be held that the  respondents are in wrongful possession of the premises nor can  it be said that the respondent have no right to continue in  occupation of the flat in Sonmarg.  The High Court has said that  in a suit for specific performance of the agreement filed by the  respondents, the High Court has granted an injunction   prevented the respondents from being dispossessed except by  due process of law and Section 630 proceedings being, penal in  nature, cannot be said to be the "due process of law".  Any  order in the proceedings initiated by the  appellant-company for  recovery of possession  of the Sonmarg flat from the  respondents would be in breach of express injunction order  issued by the Court. The High Court has dismissed the appeal  filed by the appellant company. Consequently complaint filed  by the appellant stands dismissed.           Learned counsel for the appellant-company  has urged that the  High Court has not properly understood the scope and ambit of  Section 630 of the Companies Act and thereby committed an

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error in holding that the proceedings under Section 630 of the  Companies Act could not be encompassed within its fold "due  process of law"  not being civil proceedings.   The provision  being penal in nature cannot be taken recourse to  for   possession of the flat when the matter relating to flats in  question are pending in the Court.            Before we embark upon the discussion, we may first notice  the  scope of language of  Section 630 of the Companies Act.   The said Section reads as under: "S.630:- Penalty for wrongful withholding of property \026  

(1)  If any officer or employee of the Company -  

       (a)     wrongfully obtains possession of any property of a  company; or  

       (b)     having any such property in his possession, wrongfully  withholds it or knowingly applies it to purposes other than  those expressed or directed in the articles and authorized by this  Act;

he shall, on the complaint of the company or any creditor or  contributory thereof, be punishable with fine which may extend  to ten thousand rupees;

(2)     The Court trying the offence  may also order such  officer or employee  to deliver up or refund, within a time to be  fixed by the Court, any such property  wrongfully obtained or  wrongfully withheld or knowingly misapplied, or in default, to  suffer imprisonment for a term which may extent to two years"

From the bare reading of the Section, it is apparent that Sub- S.(1) is in two parts.  Sub-s.(1) of clauses (a) and (b) creates  two different and separate offences.  Clause (a) contemplates a  situation wherein an officer or employee of the company  wrongfully obtains possession of any property of the company  during the course of his employment to which he is not entitled  whereas clause (b) contemplates a case where an officer or  employee of the company having any property  of the company  in his possession , wrongfully withholds it or knowingly applies  it to purposes other than those expressed or directed in the  Articles and authorized by the Company.  Under this provision,  it may be that an officer or an employee may have lawfully  obtained  possession of any property  during the course of his  employment, still it is an offence if he  wrongfully withholds it  after the termination of his employment.  Clause (b) also makes  it an offence , if any officer or employee  of the Company  having any property of the company in his possession  knowingly applies it to purposes other than those expressed or  directed in the articles and authorized by the Act.  This Section  does not make any difference between the movable and  immovable property.  The property in Section 630 includes  both movable and immovable property.  Sub-s.(2) of Section  630 authorizes the Court  trying the offence, in its discretion to  order any such officer or employee of the company which  includes past or present, or his or her legal representative,   to  deliver, within a specified time, possession of such property  which has been wrongfully obtained or wrongfully withheld or  knowingly misapplied.  In default, the Court may impose a  punishment of imprisonment  for a term which may extend to  two years.         In the matter of Baldev Krishna Sahi vs. Shipping  Corporation of India Ltd. (1987) 4 SCC 361 this Court  resolved the conflict and has held that the expression ‘officer’  or ‘employee’ of the company applies not only to the existing

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officer or employee but also includes  past officer or employee where such officer or employee either wrongfully obtained or  wrongfully withheld or knowingly misapplied any property  after the termination of his employment.  This decision was  approved by a Three Judge Bench of this Court in Amrit Lal  Chum  vs.  Devoprasad Dutta Roy (1988) 2 SCC 269 where  it is held that Section 630 of the Act  makes it an offence if an  officer or employee of the company  who was permitted to use  the property of the company during his employment wrongfully  retains or occupies the same after the termination of his  employment and that there is no warrant  to give a restrictive  meaning to the term "officer or employee" appearing in sub- s.(1)  of Section 630 of the Act as meaning only an existing  officer  or an existing employee and not those whose  employment had been terminated  or had otherwise come to an  end.           While interpreting and laying down  the object of the  provision of Section 630 of the Companies Act, this Court in  the matter of Atul Mathur  vs. Atul Kalra (1989) 4 SCC 514  has emphasized  that the object of the provision of  Section 630  of the Act is to retrieve the property of the company and that  even though the provisions are  penal in  nature, the object of  the provision is required to be given a purposive interpretation  so as not to choke the beneficent provision.           In the matter of   Abhilash Vinodkumar Jain (Smt.)  vs Cox  & Kings (India) Ltd. and others (1995) 3 SCC 732,  a  Division Bench of this Court explained the object of Section  630 of the Companies Act and said: (Para 15 at Page 740) "Even though Section 630 of the Act falls in Part XIII of the  Companies Act and provides for penal consequences for  wrongful withholding of the property of the company, the  provisions strictly speaking are not penal in the sense as  understood under the penal law.  The provisions are quasi- criminal.  They have been enacted with the main object of  providing speedy relief to a company when its property is  wrongfully obtained or wrongfully withheld by an employee or  officer or an ex-employee or ex-officer or anyone claiming  under them."

The Court has explained and interpreted the term ‘officer’ or  ‘employee’ of the Company in Section 630 of the Companies  Act  and said that it would include the legal heirs and  representatives of the employee or the officer concerned,  continuing in occupation of the property of the company after  the death of the employee or the officer.         A Three Judge Bench of this Court in Lalita Jalan and  Another  vs.  Bombay Gas Co. Ltd. and others  (2003) 6  S.C.C. 107 has drawn a distinction between the provisions of  the Statute which are purely of a penal nature and the  Companies Act, particularly  provisions of Section 628 to  Section 631 of the Companies Act and held: (Paragraphs  17  and 19) "The purpose of criminal justice is to award punishment.  It is a  method of protecting society by reducing the occurrence of  criminal  behaviour.  It also acts as a deterrent.  Where the  punishment is disabling or preventive, its aim is to prevent a  repetition of the offence by rendering the offender incapable of  its commission.  The Companies Act is entirely different from  those statutes which basically deal with offences and  punishment like the Indian Penal Code, the Terrorist and  Disruptive Activities  (Prevention) Act etc.  It makes provision  for incorporation of the companies, its share capital and  debentures, management and administration, allotment of  shares and debentures, constitution of Board of Directors,  prevention of oppression and mismanagement, winding up of

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the company etc.  The heading of Part XIII of the Companies  Act is "General" and a few provisions  therein, namely, Section  628 to 631 create offences and also prescribe  penalty for the  same.  Having regard to the purpose for which Section 630  has  been enacted viz. to retrieve the property of the company and  the salient  features of the statute (Companies Act) it is not  possible to hold it as a penal provision as the normal attributes  of crime and punishment are not present here.  It cannot be said  to be an offence against the society at large nor is the object  of  awarding sentence preventive or reformative.  In such  circumstances the principle of interpretation relating to criminal  statutes that the same should be strictly construed will not be  applicable"

"Even otherwise as shown earlier, the wrongful withholding of  property of the company has been made punishable with fine  only.  A substantive sentence or imprisonment can be awarded  only where there is a non-compliance  with the order of the  court regarding delivery or refund of the property.  Obviously,  this order would be passed against a specific person  or persons  whether an employee, past employee  or a legal heir or family  member of such an employee and only if such named person  does not comply with the order of the court, he would be liable  to be sentenced which may extend to imprisonment for two  years.  At this stage, namely, where the court would award a  substantive sentence of imprisonment for non-compliance with  its order the question of enlarging or widening the language  of  the section cannot arise as the order would be directed against a  specifically named person"

From above narration of authorities, it is absolutely clear that  Section 630 of the Companies Act, does not only cover cases of  the present employee or officer of the company and this  provision strictly speaking is not penal in the sense as  understood under penal law.  The main purpose to make action  an  offence under Section 630 is to provide a speedy and  summary procedure for retrieving the property of the company  where it has been wrongly obtained by the employee or officer  of the company or where the property has been lawfully  obtained but unlawfully retained after termination of the  employment of the employee or the officer and to impose a fine  on the officer or employee of the company if found in breach of  the provision of Section 630 of the Companies Act and further   to issue direction if the Court feels it just and appropriate for  delivery  of the possession of the property of the company and  to impose a sentence of imprisonment when there is non  compliance of the order of the Court regarding delivery or  refund of the property of the company.             On 23.12.1994, Respondents 1 and 2 filed a civil suit No.7 of  1995 for specific performance of the contract for transfer of the   flat at Blue Heaven Cooperative Housing Society.  The High  Court had passed an order with the consent of the parties that  the plaintiff  i.e. Respondent No.2 shall not be dispossessed   from the premises i.e. flat at Sonmarg except with due process  of law.  The proceedings taken up by the appellant  in the Court  under Section 630 of the Companies Act were held not to be the  proceedings under due process of law.  We have already seen  that Section 630 of the Companies Act provides for summary  legal remedy  for seeking possession of the property of the  company.  Due process of law in the present context   would  ordinarily mean such an exercise of power  by the parties as the  settled principles of law permit  and/or a  course of legal  proceedings, according to those rules and principles which have  been established  in our systems of  jurisprudence for the

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enforcement and protection of private rights.  Due process of  law would in short mean a procedure established by law, which  is a procedure fixed or laid down in law.  When the High Court  has passed an order of injunction, in the aforesaid terms, what is  meant by the High Court is, that the Company shall not take  forceable possession of Sonmarg flat during the pendency of  the suit and Company was given liberty to take steps  for  possession as is permissible  under law including the provisions  of any Statute giving right to obtain possession to the company  in the facts and circumstances of the case.  The company can  prove the unlawful possession of the property by the employee  or his or her legal representative after the demise of the  employee or an officer of the company.  The company has the  remedy to initiate action under Section 630(1) and on  conviction by the Competent Criminal Court it can approach  the same Court for directing delivery of possession which sub- Section (2) of Section 630 of the Companies Act provides.  The  remedy is provided in the Statute itself and the High Court’s  order by no stretch of imagination can be read to mean that the  Company has to necessarily approach the civil court   only for  obtaining possession of the Sonmarg flat and that the remedy  available under  the  Companies Act  cannot be resorted.  In our  opinion the decision of the High Court that Section 630 of the  Companies Act being  penal in nature, the proceeding  thereunder cannot be construed to be a proceeding taken in due  process of law, cannot be sustained.  Filing of civil suit for  possession by the Company does not deprive the Company of  the right to institute prosecution under the Companies Act and  incidentally get an order for delivery of possession.  It is stated  that the civil suit was filed by way of abundant caution as well  as to obtain reliefs which cannot cannot be granted by a  Criminal Court trying an offence under Section 630.         The next important question is  whether the possession of  respondents of  the property  belonging to the company,  namely, the Sonmarg flat, after the death of Shri S.C.  Agarwalla,  is unlawful and unauthorized and therefore  wrongful.  Both the Courts, namely, the Court of Magistrate  and the High Court on appreciation of the material placed  before them have clearly  held that after the death of Shri  Agarwalla, on the basis of assurance given by the Chairman of  the Board of Directors of the appellant-company, Shri Goenka  to Respondent No.1 the said flat is being occupied by the  Respondents.  We have summarized the High Court’s ultimate  finding on this issue on the question of assurance given by  Chairman Shri Goenka to Respondent No.1.  The learned  counsel for the appellant took us through the judgment of High  Court and the record in considerable detail for the purpose of  disputing this finding.  Counsel for the appellant could able to  point to scarcely any error in this finding based on evidence on  record.  He, however, submitted, that, in relying on this finding,  the Judge has drawn entirely wrong inference.  The substance  of his full and careful argument in this context  may be  summarized as follows:         It is urged by the learned senior counsel for the  appellant that the High Court has failed to appreciate that the  permission, if any, given to Respondent No.1 to live in  Sonmarg flat till the possession of the flat at Blue Heaven was  delivered to respondents, by the Chairman Shri Goenka, being  without any authority of law and being outside the powers  vested in the Chairman, would not be binding on or   enforceable against the company.  It is submitted that those  powers could only be exercised by the Board of Directors or  by  Chairman only with specific authorization to that effect by the  Board of Directors.   Countering this argument, it is urged by  the learned counsel for Respondents 1 and 2 that the findings

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arrived at by both the courts below that possession of  Respondents 1 and 2 is permissible and not wrongful as the  respondents have been assured by the Chairman of the  Company to continue to live in the flat at Sonmarg till the  possession of the flat at Blue Heaven is delivered to them is  based on proper assessment of relevant material on record and  does not warrant any interference  by this Court.  The  respondents’ possession of the flat being permissive cannot be  held to be wrongful to attract the provisions of Section 630 of  Companies Act.          The question really is whether the Chairman of the Board of  Directors of the Company has the authority  to give such an  assurance to Respondents 1 and 2  when he met them at the  condolence meeting after the demise of Shri S.C. Agarwalla,  which could bind the company and thereby could it be taken as  a permission given by the company to respondents 1 and 2  to  reside in Sonmarg flat and thereby their possession could be  said to be a lawful possession.  In the matter of company  affairs, Directors act as a body and collectively as a Board.   Any Director acting individually has no power to act on behalf  of the company in respect of any matter except to the extent to  which any power or powers of the Board have been delegated  to him by the Board within the limit permitted by the  Companies Act or any other law.  The position of the Chairman  of the Board of Directors is not substantially different from an  individual Director.  Under the Companies Act, Chairman of  the company  does not have any special or extraordinary rights  to be exercised  by him without being authorized  by the Board  of Directors.  The Board of Directors of course have an  authority to delegate the power or authority to act for and on  behalf of the company to the Chairman of the Board of  Directors.         Section 291 of the Companies Act  authorizes the Board of  Directors of the Company to exercise such powers or of such  acts or things as the company is authorized to exercise and do  such acts or things,  except in the matter where the power is to  be exercised by the company in general meeting.  The exercise  of the powers by the Board shall be subject to the provisions  contained in the Companies Act or any other Act or in the  Memorandum  or Articles of the company.  Therefore, under  Section 291 of the Companies Act, the action of the Board of  Directors should be in conformity  with the provisions of the  Company Law or any other enactment or in conformity  with  the memorandum or articles of association of  the company.   It  is the specific case of the respondents  which has been found  correct by the Courts  that they are holding possession of the  company’s flat at Sonmarg on the oral assurance given by Shri  Goenka, Chairman of the Board of Directors that they can  continue to reside in the said flat until the possession of the flat  at Blue Heaven Cooperative Society is given to them.   Admittedly the flat at Sonmarg belongs to the Company.  Shri  S.C. Aggarwalla, husband of  Respondent No.1 and father of  Respondent No.2  was the ex employee of the Company.  He   expired when he was in the employment of the company and  respondents 1 and 2 were residing in the flat after the demise of  Shri Aggarwalla  as his  heirs.  Thus it is for Respondents 1 and  2 to show the authority of Shri Goenka to bind the company on  the basis of the oral assurance given to them by him to retain  the possession of the flat.  The High Court has not referred to  any evidence to that effect led by the respondents, nor there is  any finding that the Board of Directors have authorized the  Chairman Shri Goenka to give such an assurance  for and on  behalf of the company.         On 28th of December 1993 a letter was sent by appellant   requesting Respondent No.1 to vacate the premises and

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handover peaceful possession of the premises within 45 days of  the receipt of the letter.  The contents of the letter are that Shri   S.C. Agarwalla was occupying the premises  as a facility  granted to him by the company until he was in the employment  of the company.  On account of the demise of Shri Agarwalla,  the company deferred the request for vacation of the said  premises; that more than a year has lapsed since the demise of  Shri Agarwalla, it is essential for the company to take  possession of the same.   The correspondence placed on record  by parties also does not indicate that the Chairman of the  Company Mr. Goenka gave an assurance  on the  basis that he  has been authorized to do so by the Board of Directors.  In the  absence of  any authority to the Chairman by the Board of  Directors to act for and on behalf of the company, the assurance  given by him to the respondents would not bind the company,  nor it will create a binding agreement between the parties,  namely, Respondents 1 and 2 and the company to permit the  respondents to remain in possession even after the death of Shri  Agarwalla, of the flat in Sonmarg.  Apart from this, the Board  of Directors itself could exercise the powers in accordance with  the memorandum of association or the articles of the company.   Any power exercised beyond the memorandum or the articles  of the company would not bind the company.  Any assurance  given by the Board of Directors either should be authorised  object of the company by the memorandum of association or  the articles of the company or its purpose should be reasonably   ancillary or incidental to carrying on the companies business.           Evidence produced on record indicates that agreement was  entered into between the company and husband of the  respondent No. 1 regarding Blue Heaven flat. Late Shri  Agarwalla was old employee of the company since 1971.  He  expired on 2.11.1992 and assurance was given by the chairman  to widow of ex employee with  whom he had long standing  relation, when he went to see her to console her on 4.11.92,   barely two days after the death of  Shri Agarwalla.   Such  evidence in our opinion irresistibly point, predominant, if not,  the only consideration operating in the mind of chairman was   to console the widow and to permit her to live in the flat for  some time.  The  assurance given to respondents 1 and 2 by the  chairman of the company has more at a gratuitous and  compassionate flavour and less to do with the interest of the  company in mind.   Moreover, it is difficult to comprehend how  the chairman could promise on behalf of the Company that the  respondents will be permitted to remain in flat till delivery of  flat of Blue Heavan, when he himself was not  sure of the time  the company would get the possession of the Blue Heaven flat.   That apart, the act of the Chairman cannot be construed to be  one done incidental to the business of the Company or as a  matter of necessity.                 After the death of Shri Agarwalla on 2.11.1992, the  respondents 1 and 2 remained in possession of the company’s  Sonmarg flat.  Admittedly they were not in employment of the  company nor company has authorized them to remain in  possession of the same particularly after notice dated 9.11.1994  to vacate the premises and handover the possession to the  company.   The possession of the company’s flat by the  Respondents,  after the service of notice to vacate the premises  by the company, is wrongful withholding of the property of the  company.   The respondents by having wrongfully withheld the  possession of the company’s flat and not delivering  the  property to the company, have committed an offence.  The  interim order of the High Court dated 16.11.1998 in the civil  suit filed by the appellant-Company does not wipe out the  offence committed already for which criminal complaint was  filed.  Subsequent to that order, the possession may not be

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wrongful, but on the date of complaint and till the date of that  order, the Respondents did wrongfully withhold that property,  attracting the offence under Section 630(1).  Having regard to  the factual position of the case, we think that imposition of fine  of Rupees One thousand each would be a proper punishment  for wrongful withholding the Sonmarg flat.  Accordingly,  respondents 1 and 2 are sentenced to pay fine of Rupees one  thousand each.  We would like to make it clear  that so long as  order of the High Court dated 16.11.1998 in Civil Suit No.2391  of 1997 \026 M/s. Herdillia Chemicals Ltd. versus Smt. Manjula  Agarwala and others, appointing the Court Receiver and  delivering him symbolic possession, and actual possession  as  agent  of Receiver  to Respondent No.1 stands, no direction can  be given under Section 630(2) for delivery of actual possession  of Sonmarg flat to appellant.  It is of course open to the  petitioner to approach the Civil Court for suitable orders.  The  High Court may dispose of both the suits viz., Suit No.7/95 and  2391/97 expeditiously, as far as possible within one year.                 For the aforesaid reasons, the appeal is partly allowed.    The judgment and order of the High Court and that of the Addl.  Chief Metropolitan Magistrate, 40th Court at Girgaum, Bombay  are set aside.  However, in the facts and circumstances of the  case, we direct the parties to bear their own costs.