Amended and updated notes on section 452 of the Companies Act 2013 as amended by the Companies (Amendment) Act, 2020 and Company Rules made there under. Detail discussion on provisions and rules related to Punishment for wrongful withholding of property.
Chapter XXIX (Sections 447 to 470) of the Companies Act 2013 (CA 2013) deals with the provisions related to miscellaneous. Section 452 of CA 2013 provides for Punishment for wrongful withholding of property.
Recently, we have discussed in detail section 451 (Punishment in case of repeated default) of CA 2013. Today, we learn the provisions of section 452 of the Companies Act 2013. The amended provision of section 452 is effective for the financial year 2020-21 onwards.
In this article, you will learn detail of the provisions of section 452 of the Companies Act 2013 Bare Act read with the relevant Company Rules 2021 as provided by Ministry of Corporate Affairs (MCA), Government of India.
| Name of Act | The Companies Act 2013 |
|---|---|
| Enacted by | Parliament of India |
| Administered by | Ministry of Corporate Affairs (MCA) |
| Number of Chapters | 29 |
| Number of Sections | 484 (470-43+57) |
| Number of Schedules | 7 |
| You are reading: | |
| Chapter No. | XXIX |
| Chapter Name | Miscellaneous |
| Section No. | 452 |
| Section Name | Punishment for wrongful withholding of property |
| Monthly Updated Edition | Company Law PDF |
Section 452: Punishment for wrongful withholding of property
Section 452(1) of Companies Act
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.
Section 452(2) of Companies Act
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.
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.
[Proviso of sub-section(2) of section 452 has been inserted w.e.f. 22.01.2021 by the Companies (Amendment) Act, 2020 vide MCA Notification S.O. 325(E) dated the 22nd January, 2021]