Judgment The question for determination in this appeal is as to whether the assignment on which the plaintiff has instituted the suit is void under section 227 (2) of the Indian Companies Act. The plaintiff, the first defendant and some others are subscribers in a chit conducted by the Commercial Funds, Ltd., Kancheepuram. The first defendant was the successful bidder in the auction held on the 1st of December, 1947. He received Rs. 2500 and executed an agreement, Exhibit A-1, with the second defendant as surety for a sum of Rs. 4300, being the amount of the unpaid instalments for the subsequent period. The plaintiff, however, did not bid in any auction, and he became entitled to recover Rs. 1103-8-0 from the Commercial Funds, Ltd. The Commercial Funds were not in a position to pay cash and hence, it is stated, the agreement Exhibit A-1 executed by the first defendant in favour of the funds was assigned over for a consideration of Rs. 650-14-0 which was the amount due by the Funds to the plaintiff under Exhibit A-2. It is not disputed that on the date of the assignment winding-up proceedings of the Company had been initiated and commenced and the Official Receiver Chingleput, appointed as the Official Liquidator. It is contended that the assignment is void and not enforceable. On the plain language of section 227(2) of the Act there can be no difficultly in upholding the view taken by the lower Courts that the transaction is void, the winding-up proceedings having commenced prior to the date of the assignment. But it is contended by Mr. Parathasarathi Ayyangar, relying on the decision in Tulsidas Jasraj v. The Industrial Bank of Western India1, that it is not ab initio void, for certain transactions can be excepted from the mischief of section 227(2) of the Act, and the learned advocate relies on the following observations of the learned Judges in that decision occurring at page 742: “Now here as regards section 227(2) the Courts has to steer a middle course between two extremes. On the one hand the words of the section are wide enough to include any sale or payment that a company may make after the date of the winding-up petition. On the one hand the words of the section are wide enough to include any sale or payment that a company may make after the date of the winding-up petition. On that basis any business would practically have to be stopped if a petition was presented, because it would be unsafe to dispose of any of the company’s assets.” The learned Judges further observed: “Consequently, the Court has very properly laid down that speaking generally any bona fide transaction carried out and completed in the ordinary course of current business will be sanctioned by the Court under section 227(2)” . Here it cannot be pretended that paying a creditor by assigning an asset of the company, especially after the commencement of the widing-up proceedings, could be considered to be a bona fide transaction carried out or arising in the ordinary course of current business. What the learned Judges in that decision had in mind was any payment necessary for running a business may be excepted and in respect of that too, the Court must find whether it was a transaction conducted bona fide, but not as in the present case, where there is a transfer of an asset, the result of which would be preferring one creditor to another which is not countenanced by the Act. It would have been open to the plaintiff to have applied for the sanction of the Company Court for such a transaction and, in the absence of any such transfer, the view taken by the Courts that under section 227 (2) the assignment is void is correct and does not require any interference. The Second Appeal is dismissed with costs. (No leave.) P.R.N. ----- Appeal dismissed. Leave refused.