• Praveer Shukla

Section 452- Punishment For Wrongful Withholding of Property.

#section452 #companiesact #withholdingproperty #punishmentforcompanies


Section 452 of the Companies Act, 2013 talks about the punishment for an employee or an officer of the company if they are found illegally possessing or withholding any property of the company. The property of the company also includes any cash of the company.


Section 452(1) of the Act says that if a person, whether an employee or an officer, is found to be illegally in possession of the property of the company, or they are found withholding any property of the company, including any cash, or they use such property or cash, as the case may be, for any purpose than that specified in the Article of Association of the company, then that person would be liable for punishment on the complaint made by the creditors, members, contributors, or the company itself.


The punishment in such a case would be fine. The minimum amount of fine would be Rs. 1,00,000 (one lakh rupees) and the maximum limit for a fine would be Rs. 5,00,000 (five lakh rupees).

As per Section 452(2) of the Act, the Court in which the offense under subsection (1) is being tried, may order the employee or the officer in default to refund or deliver up any cash or the property that had been wrongfully withheld or used for any other purposes. This refund is to be made within a time fixed by the court.


In case the defaulting party has benefitted from the property or cash of the company, then the court can also direct the defaulting party to deliver or refund such benefits to the company.

Also, as per section 452(2) of the Act, the court can also sentence the defaulting party to be sent to jail for a maximum term of 2 (two) years.

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