28 October 2025 Legal Updates

[S.452 COMPANIES ACT] 'STRICT LIABILITY' OF EMPLOYEE TO RETURN COMPANY PROPERTY ONCE EMPLOYMENT ENDS: DELHI HIGH COURT

(a) Case Title:

• Punita Khatter v. Explorers Travel & Tour Pvt Ltd

(b) Court:

• High Court of Delhi at New Delhi

(c) Date of Decision:

• 27th October, 2025

(d) Bench:

• Hon'ble Ms. Justice Neena Bansal Krishna

Brief Facts

• Punita Khatter was a 35% shareholder and Managing Director of Explorers Travel & Tour Pvt Ltd. She was removed from her position as Managing Director on 11th April 2016 due to irregularities in her duties. The company immediately demanded return of company property in her possession, including keys, cars, financial records, computers, credit cards, and company documents.
• Despite repeated demands via emails dated 11.04.2016 and subsequent notices, the petitioner failed to return the articles. The company filed a complaint under Section 452 of the Companies Act, 2013 on 26.04.2016. The trial court summoned the petitioner and framed charges, which she challenged before the High Court under Section 482 CrPC.

Petitioner's Arguments

• She was still a Director when the complaint was filed (resigned only on 09.06.2016), so no wrongful withholding occurred
• The demand letters were vague and lacked specific details about the articles
• All articles were eventually returned by 30.06.2016
• Section 452 requires proof of entrustment, which was not established
• Electronic evidence lacked proper certification under Section 65B of Evidence Act

Respondent's Arguments

• Section 452 does not require proof of entrustment
• As Managing Director, she possessed company property in that capacity, not as Director
• Her obligation to return property arose immediately upon removal as Managing Director
• The Local Commissioner's report confirmed recovery of documents from her possession
• Repeated demands were made but ignored

Legal Provisions

Section 452, Companies Act, 2013: Penalizes officers or employees who wrongfully withhold company property (including cash) in their possession.

Court's Decision

The High Court dismissed the petition and upheld the trial court's order.

Key Findings:

• Timing of Obligation: Once removed as Managing Director on 11.04.2016, the petitioner was obligated to return all company property immediately, regardless of continuing as a Director.
• No Entrustment Required: Section 452 is a strict liability provision that does not require proof of entrustment. The provision mandates return of property as soon as possession becomes unlawful
• Sufficiency of Notice: The demand for "all financial records, accounts, management accounts, data in computers with passwords, and all company records" was sufficiently specific, not vague
• Status Distinction: Articles were in her possession by virtue of being Managing Director, not Director. Continuing as Director didn't give her right to retain Managing Director's property
• Prima Facie Case Established: The trial court correctly found adequate evidence to frame charges under Section 452

Legal Principles

• Section 452 covers both present and past employees
• Managing Directors possess company property in their official capacity, not personal capacity
• Strict liability applies - once employment/position ends, property must be returned immediately
• Summoning orders should be challenged promptly, not notice orders

Significance

This judgment clarifies that corporate officers must immediately return company property upon cessation of their position, and cannot claim continued right to possession based on holding another position in the company. It emphasizes the strict liability nature of Section 452 and the distinction between different corporate positions.

Outcome:

Petition dismissed. Criminal proceedings to continue against the petitioner.

CHANGE OF POCSO VICTIM'S CLOTHES BEFORE MEDICAL EXAMINATION CAN'T WEAKEN PROSECUTION EVIDENCE: DELHI HIGH COURT

(a) Case Title:

• Jai Mangal Mehto v. State (Govt. NCT of Delhi)

(b) Court:

• High Court of Delhi at New Delhi

(c) Date of Decision:

• October 27, 2025

(d) Bench:

• Hon'ble Dr. Justice Swarana Kanta Sharma

Facts of the Case

The appellant (accused) was convicted for attempting to commit rape on a 9-year-old child (victim 'X'), his niece. An FIR was registered under Sections 376/511 IPC and Sections 6/18 of POCSO Act

Trial Court's Decision

The Additional Sessions Judge convicted the appellant under:

• Section 18 read with Sections 5(m) and 5(n) of POCSO Act
• Section 511 read with Section 376AB of IPC

Sentence: 10 years rigorous imprisonment + fine of ₹10,000 (30 days simple imprisonment in default)

Appellant's Arguments (Grounds of Appeal)

• Medical report showed victim's hymen was intact - no penetrative assault occurred. There were contradictions in victim's statements (referred to "an uncle" in Section 164 statement vs. identifying appellant in court). Other relatives present in the room were not examined.
• Bedsheet was never seized; clothes were changed before medical examination. No eyewitness to the offense; victim didn't raise alarm. Appellant was intoxicated and lacked criminal intent (defense under Section 23 BNS). There was a possibility of tampering with evidence.

Prosecution's Arguments

Testimonies of prosecution witnesses were consistent and credible. Medical and forensic evidence corroborated the victim's testimony. DNA profile from semen stains on victim's clothes matched the appellant's DNA. Minor discrepancies don't affect the core prosecution case. Chain of evidence is complete.

High Court's Analysis and Reasoning

Key Legal Principles Applied:

1. Statutory Presumption (Sections 29-30 POCSO Act):

Once victim testifies, presumption operates in favor of prosecution. Burden shifts to accused to rebut with plausible defense.

2. Intact Hymen Not Conclusive:

Court held that intact hymen doesn't negate attempted sexual assault. Presence/absence of hymenal tear cannot be conclusive proof. Medical findings must be read with totality of evidence.

3. Forensic Evidence:

DNA from semen stains on victim's lower garment matched appellant's DNA. This evidence remained unrebutted by defense.

4. Credibility of Witnesses:

Victim consistently stated she woke up with soiled clothes and identified accused. Mother and Father of victim corroborated seeing appellant coming out while zipping pants.

5. Defense of Intoxication:

Court rejected this defense as no medical evidence supported intoxication claim. Intoxication absolves only when it renders person incapable of forming mens rea. No such evidence was produced

6. Evidentiary Issues:

Mother changing clothes before medical exam was natural and understandable conduct. Non-seizure of bedsheet doesn't create reasonable doubt. Non-examination of peripheral witnesses doesn't vitiate prosecution case when material witnesses are credible

7. Shifting Defense Versions:

Appellant took inconsistent positions (complete denial, intoxication, family dispute). This eroded defense credibility.

High Court's Decision

Appeal DISMISSED. The High Court held that Trial Court committed no error in conviction. Prosecution proved guilt beyond reasonable doubt. Elements of attempt to commit penetrative sexual assault were established. Appellant failed to rebut statutory presumption under Section 29 POCSO Act. Conviction and sentence require no interference.