valid as on 23/06/2024

Section 452. Punishment for wrongful withholding of property
Effective from 12-09-2013

(1) If any 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 and authorised by this Act,

he shall, on the complaint of the company or of any or creditor or  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.

 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.

2(59) Officer includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act
2(5) Articles means the articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or of this Act
2(55) Member, in relation to a company, means—

(i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members;

(ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company;

(iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository

2(26) Contributory means a person liable to contribute towards the assets of the company in the event of its being wound up.

Explanation.—For the purposes of this clause, it is hereby clarified that a person holding fully paid-up shares in a company shall be considered as a contributory but shall have no liabilities of a contributory under the Act whilst retaining rights of such a contributory

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.

Commencement Notification S.O. 325(E) dated 22.01.2021 under Companies (Amendment) Act, 2020

Companies (Amendment) Act, 2020 dated 28.09.2020

Enforcement notification S.O.2754 (E) dated 12/09/2013

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