Section 630 of the Companies Act, 1956, provides for penalty for wrongfully withholding the property of a Company. The said section stipulates that any officer or employee of a Company wrongfully obtaining possession of any property of a Company or after having obtained possession wrongfully, withholds it or applies it for purposes not meant to be applied, shall be punishable with a fine, which may extend to Rs.1,000/-.

Once a complaint is filed under section 630 of the Act, the Court trying such offence may also order such officer or employee to deliver up or refund any such property wrongfully obtained or withheld or knowingly misapplied. If the order of the Court is not obeyed, the penalty prescribed is imprisonment for a term which may extend to two years.

Therefore, Section 630 creates two distinct offences.
a)  Wrongfully withholding a Company's property, which is punishable only with fine; and
b)  Failure to surrender the property inspite of a Court order to do so, which is punishable with imprisonment, which may extend to two years.

Section 630 applies to both movable and immovable property of a Company. Further, the term "officer or employee' applies not only to existing officers or employees but also to the past officers or employees.

Where there is a dispute regarding the title of the property, which is civil in nature, various High Courts have held that the Magistrate should not venture to determine the same in exercise of their jurisdiction under section 630 of the Companies Act.

One of the most frequent instance where Section 630 of the Act is set into motion by the company is against an employee, who had been given the Company's residential accommodation, and who, after his dismissal or his retirement from service, withholds possession of such accommodation. The Madras High Court has further held that Section 630 can be attracted against a dismissed employee even when such employee has challenged his dismissal before the competent Industrial Court.