Punishment for wrongful withholding of property

(1)

If any officer or employee of a company—

(a)

wrongfully obtains possession of any property, including cash of the company; or

(b)

having any such property including cash in his possession, wrongfully withholds it or knowingly applies it for the purposes other than those expressed or directed in the articles and authorised by this Act,

he shall, on the complaint of the company or of any member or creditor or contributory thereof, be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees.

(2)

The Court trying an offence under sub-section ( 1 ) may also order such officer or employee to deliver up or refund, within a time to be fixed by it, any such property or cash wrongfully obtained or wrongfully withheld or knowingly misapplied, the benefits that have been derived from such property or cash or in default, to undergo imprisonment for a term which may extend to two years.

Proviso

Provided that the imprisonment of such officer or employee, as the case may be, shall not be ordered for wrongful possession or withholding of a dwelling unit, if the court is satisfied that the company has not paid to that officer or employee, as the case may be, any amount relating to—

(a)

provident fund, pension fund, gratuity fund or any other fund for the welfare of its officers or employees, maintained by the company;

(b)

compensation or liability for compensation under the Workmen’s Compensation Act, 1923 in respect of death or disablement.

Notes, amendments & references (1)

Provided that Inserted vide Companies (Amendment) Act, 2020 dated 28.09.2020 with effect from 22.01.2021. To view the Act, Click Here and to view the commencement notification, Click Here .