Delhi High Court reinforces employer rights over company assets 

In a noteworthy judgment delivered on 27 October 2025, the Delhi High Court in Punita Khatter vs. Explorers Travel & Tour Pvt. Ltd., CRL.M.C. 1637/2017, drew a very clear line around an issue that often turns messy during employee exits: the timely return of company property. The case involved a former Managing Director who continued to hold onto her company-issued laptop and other assets despite several reminders. She eventually returned them but only after criminal proceedings were initiated. The Court made it clear that this kind of conduct is not a harmless administrative lapse; it falls squarely within the scope of Section 452 of the Companies Act, 2013, which treats wrongful retention of company property as a serious offence.

What stands out in the Court’s reasoning is its firm position that authority and possession must end together. The moment an individual ceases to hold a position that grants them access to company assets, their right to retain those assets ends as well. Whether the person continues as a director or holds any other formal association with the company is irrelevant. The assets belong to the organisation, not the individual, and cannot be kept back at someone’s discretion. The Court rejected the argument that a short continuation as director justified holding onto the laptop it was simply not her property to keep.

For employers, this ruling serves as a valuable reminder of the importance of a structured, watertight off-boarding process. Too often, the return of laptops, phones, ID cards, documents or digital credentials is treated as a routine HR formality. This judgment highlights that asset recovery is not merely administrative it has legal and compliance consequences. Employers should ensure that digital access is revoked promptly, devices are collected without delay, and formal hand-over notices are issued and acknowledged.

The decision also provides clarity on how organisations should respond when an employee refuses to return company property: they are fully within their rights to take legal action, including criminal remedies. An employee’s later willingness to return the asset does not erase the offence or insulate them from liability.

In an era where company devices often contain confidential data, client information and sensitive operational details, the High Court’s message is timely. Employers should revisit their employment contracts, asset-issuance practices, and exit protocols to ensure they reflect the seriousness with which the law treats the wrongful retention of corporate property. Proper documentation and prompt action can prevent complications and, as this case shows, protect the organisation’s rights long after an employee has left.