H. L. GOKHALE, J. ( 1 ) COMPANY Petition No. 66 of 1988 was filed on 12th April 1988 for winding-up Shri Ambica Mills Ltd. This was one of several petitions filed for this purpose. During the pendency of that petition, Reference under Sick Industrial Companies (Special Provisions) Act 1985 was filed before the Board of Industrial and Financial Reconstruction (BIFR ). The Board forwarded its opinion to this court under Section 20 of the said Act to the effect that it was just and equitable that the company be wound up. The opinion from the said Board was registered as Company Petition No. 121 of 1995 and winding-up order came to be passed on 17. 1. 1997 on Company Petition No. 66 of 1988 with Petition No. 121 of 1995 and others. Under that order (Coram: Pandit, J.), the Official Liquidator attached to this High Court was appointed as the Liquidator for that company and the Liquidator was directed to take charge of the company together with all its assets, records, books, machineries, spare parts, stores, manufactured goods, land and buildings and all other properties after taking an inventory in that behalf. The order stated that he will have all the powers prescribed under Sections 456 and 457 of the Companies Act, 1956 and would also be at liberty to seek permission from this court whenever he felt it necessary. ( 2 ) SHRI Ambica Mills Ltd. is having its properties situated mainly at four different places: (I) Unit No. 1 situated in the Khokra area of Ahmedabad. (II) Unit No. 2 which is situated near Railway Lines at Ahmedabad. (III) A textile mill at Baroda. (IV) M/s. Ambica Tubes Division at Vatva. ( 3 ) IN the present matter, we are concerned with the textile mill at Baroda known as Unit No. 3. In pursuance of the above referred judgment and order, the Official Liquidator has taken possession of all the aforesaid properties except the textile mill at Baroda. This is because subsequent to the aforesaid judgment and order, initially an appeal was preferred by the present applicant being O. J Appeal No. 7 of 1997. That came to be dismissed on 31. 3. 1997 though the status quo was directed to be maintained for a period of four weeks thereafter. The present application has been filed thereafter on 23. 4. That came to be dismissed on 31. 3. 1997 though the status quo was directed to be maintained for a period of four weeks thereafter. The present application has been filed thereafter on 23. 4. 1997 by the applicant company which claims to be a purchaser of the property situated at Baroda. It is stated in the application that an agreement dated 2. 9. 1989 had been executed much earlier between Shri Ambica Mills Ltd. and the applicant company and that this Honble Court ought to issue a direction to the Official Liquidator to execute the Conveyance Deed in favour of the applicant in pursuance of that agreement. Alternatively, it is prayed that the applicant company be permitted to file a suit for seeking a specific performance of that agreement dated 2. 9. 1989. ( 4 ) IN the affidavit in support of the application, it is stated in paragraphs 4 and 5 that the agreement referred to above was entered into on 2. 9. 1989 for a total consideration of Rs. 4,01,00,000. Prior thereto, the said Shri Ambica Mills Ltd. had given an Undertaking to the Hon. ble Supreme Court on 27. 5. 1987 in a matter of dispute pertaining to the dues of Oil and Natural Gas Commission (ONGC ). The Undertaking stated that the mill company would not alienate, charge or encumber any of its immovable assets except with the leave of the Hon. ble Court in pursuance of the order passed by the Hon. ble Supreme Court in that proceeding on 15. 4. 1987 and that it shall also keep available its immovable assets for discharging its liability to ONGC. It is further stated in para 5 of the application that: "the applicants submit that the said undertaking given by Shri Ambica Mills Ltd. to the Hon. ble Supreme Court was not disclosed to the applicant at the relevant time i. e. 2. 9. 1989 when the agreement for sale of Shri Ambica Mills Textile Unit No. 3 was entered into by and between Shri Ambica Mills Ltd. and the applicant. " ( 5 ) THIS applicant, however, accepts that in Clause No. 14 of the said agreement, there was a specific reference to the proceeding between the ONGC and Shri Ambica Mills Ltd. Clause 14 of the agreement reads as follows:"14. " ( 5 ) THIS applicant, however, accepts that in Clause No. 14 of the said agreement, there was a specific reference to the proceeding between the ONGC and Shri Ambica Mills Ltd. Clause 14 of the agreement reads as follows:"14. The Vendor has informed the Purchaser that additional price has been claimed by ONGC for the gas supplied by ONGC to the said Undertaking. The said claim is being disputed by the Vendor and a writ petition is pending in the Hon. ble the Gujarat High Court at Ahmedabad in respect thereof. The Vendor agrees and undertakes to indemnify the Purchaser and keep it indemnified from and against all claims and demands made by ONGC prior to the date of handing over possession of the said Undertaking and from and against all costs, charges and expenses which the Purchaser may have to incur or suffer or be put to on account of such claim made by ONGC against the Purchaser for the period prior to the date of the handing over of the possession of the said Undertaking. "thereafter, it is stated in para - 10 of the affidavit: "i state and submit that, with a view to deceive the applicant, Shri Ambica Mills Ltd. knowing fully well that it had given the aforesaid undertaking to this Honourable Court had not disclosed the said material fact to the applicant company and without obtaining leave from this Honourable Court agreed to transfer Unit No. 3 to the applicant company under the said agreement dated 2. 9. 1989" (Read Supreme Court in place of "this Honourable Court" ). ( 6 ) IT is further stated in the application that the applicant was put in possession since the month of December 1989 and since then the applicant is running the said unit. Then it is stated that necessary permissions under various statutes such as Urban Land (Ceiling and Regulations) Act, 1976 had been obtained and necessary forms were also submitted for complying with various other legal requirements. Thereafter, it is stated that with a view to run the factory the applicant company had retrenched approximately 800 employees by paying their legal dues to the tune of Rs. 2 crores and that it has further incurred expenses to the extent of Rs. 4. Thereafter, it is stated that with a view to run the factory the applicant company had retrenched approximately 800 employees by paying their legal dues to the tune of Rs. 2 crores and that it has further incurred expenses to the extent of Rs. 4. 5 crores for modernisation of the unit by installing new machinery and equipments and that, at the time of application, it was running spinning section by employing 500 employees paying Rs. 15 lacs per month by way of their wages. It is further stated at the end of paragraph 14 of the Application that the applicant company was paying approximately Rs. 2. 5 crores per annum by way of revenue. ( 7 ) THE application then states that, in the meanwhile Shri Ambica Mills Ltd. had approached the BIFR and in that proceeding, namely Reference Case No. 46 of 1990, a prima facie opinion was formed on 10. 3. 1995 that the mill company requires to be wound up. On coming to know of it, the applicant company approached the BIFR on 19. 5. 1995 and submitted its objections pointing out that it was, in fact, running the unit in the meanwhile and had invested huge amounts and, therefore, it requested the Board to alienate Unit No. 3 from the winding-up proceedings. ( 8 ) THE Board was, however, of the opinion that in view of the undertaking given by Shri Ambica Mills Ltd. to the Supreme Court for not transferring any of its assets, the Board could not do anything in the matter and, if the applicant thought it necessary, they may approach the Supreme Court for appropriate orders. The applicant, therefore, approached the Hon. ble Supreme Court and the Hon. ble Supreme Court rejected Interim Application No. 135-45 in Civil Appeals No. 8530-40 of 1983 preferred by the applicant, on 5. 2. 1996 by passing the following order: "i. A. Nos. 135-45 are dismissed. " ( 9 ) THE BIFR subsequently gave its opinion on 15. 9. 1995 recommending winding-up of this company. An appeal being Appeal No. 60 of 1996 was preferred against that order of winding-up by the present applicant. That was also rejected. It is relevant to note that in para 16 of its judgment, the Appellate Authority has observed as follows:"the appellants admittedly have paid Rs. 9. 1995 recommending winding-up of this company. An appeal being Appeal No. 60 of 1996 was preferred against that order of winding-up by the present applicant. That was also rejected. It is relevant to note that in para 16 of its judgment, the Appellate Authority has observed as follows:"the appellants admittedly have paid Rs. 5 lacs as per the agreement to Shri Ambica Mills Ltd. The appellant has not given any scheme before the Board. There is also nothing to show that the appellant is ready to rehabilitate the company in the appeal memorandum. It is stated that a detailed scheme would be submitted by them before the Board but was not done. The scheme the appellants referred to is based on the sale of land of Unit No. 3. As the appellant is only clothed with the agreement for sale. The appellants proposal, in fact, amounts to succession to a part of assets of Shri Ambica Mills Ltd. at a throwaway price without regard to the financial liabilities of Shri Ambica Mills Ltd. " ( 10 ) IT is also relevant to note that in para 21 of this application, it is averred as follows:" I state that at this stage I beg to point out that the ONGC having come to know about the breach of the undertaking given to the Honourable Supreme Court by the Ambica Mills Ltd. , had also filed a Contempt Petition against Shri Ambica Mills Ltd. "on a query it is also stated that this contempt application came to be filed on 23rd April 1997. ( 11 ) THE present application came up before Balia, J. The order passed by the Hon. ble Supreme Court in the proceeding initiated by the ONGC and the undertaking filed by Shri Ambica Mills Ltd. were brought to the notice of the learned Judge. In these circumstances, the learned Judge after narrating all the aforesaid background passed an order on 6. 8. 1997 and directed in paras 6, 7 and 8 as follows:"6. So far learned Official Liquidator has not moved any application for disposing of the assets of company in liquidation. As per application, sale of Mill No. 3 has not been completed in accordance with law and the property can now only be disposed of by the Official Liquidator as per the direction of this Court under the provisions of the Companies Act. 7. As per application, sale of Mill No. 3 has not been completed in accordance with law and the property can now only be disposed of by the Official Liquidator as per the direction of this Court under the provisions of the Companies Act. 7. HOWEVER, it is also clear that position before this court in no different form what was before BIFR, where such permission was sought. Thereafter, when such application was moved before the Supreme Court for such permission, the same was dismissed on 5. 2. 96. 8. In these circumstances, it is only desirable without entering into the question whether said permission as was envisaged in interim order dated 15. 4. 87 continues to be condition precedent after disposal of appeals and order of winding up, before this court exercises its jurisdiction to make an order for disposing of the property, Liquidator seek appropriate direction from the Supreme Court about the disposal of assets of Shri Ambica Mills Ltd. in the circumstances narrated above. The Liquidator is therefore directed to make application in this regard within one month before Hon. ble Supreme Court in which ONGC as well as applicant company may also be impleaded as party after furnishing advance copies to all the concerned parties who are to be impleaded therein. " ( 12 ) IT has so happened that as referred to above there was a prior litigation between ONGC on the one hand and the Association of Natural Gas Consuming Industries (including Ambica Mills Ltd.) on the other hand regarding the unpaid dues to ONGC for supply of gas. The matter was initially contested in this High Court and subsequently, the order passed by the learned single Judge was carried to the Hon. ble Supreme Court being Civil Appeal No. 8350-40 of 1983. During the pendency of those appeals, the Hon. ble Supreme Court had directed ONGC on 15. 4. 1987 to continue to supply gas to these companies including Shri Ambica Mills Ltd. at the rate of Rs. 1000. 00 for one thousand cubic metres. During the pendency of those appeals, the Hon. ble Supreme Court had directed ONGC on 15. 4. 1987 to continue to supply gas to these companies including Shri Ambica Mills Ltd. at the rate of Rs. 1000. 00 for one thousand cubic metres. That was subject to an Undertaking to be given by the companies concerned that they will not charge, encumber or alienate except with the leave of the Supreme Court any of the immovable assets and they will make their immovable assets available for discharging their respective liabilities on account of the difference in the price of all the gas supplied which will be governed by the orders to be made by the court while disposing of the appeals. The order passed by the Supreme Court on 15th April 1987 reads as follows:" these appeals will be listed peremptorily on July 21, 1987 as the very first case for regular hearing and above all other causes. WE direct that during the pendency of the appeals, the Oil and Natural Gas Commission will not disconnect the supply of gas to the respondents namely the Association of Natural Gas Consuming Industries of Gujarat, M. S. Jayant Paper Mills Ltd. , M/s. Alembic Glass Industries Ltd. , M/s. Alembic Chemical Works Company Services Ltd. , New India Industries Ltd. , Punjab Steel Rolling Mills Pvt. Ltd. , Chanden Metal Products Ltd. , and Shri Ambica Mills Ltd. , Mill No. 2 and will continue to supply gas as hitherto charging at the rate of Rs. 1000. 00 for one thousand cubic meters subject however to the undertaking by the Respondents which has been given and has been accepted here, that the said Respondents will not charge, encumber or alienate, except with the leave of this Court, any of their immovable assets included in the respective undertakings and that they will make their immovable asset available for discharging the respective liabilities on account of the difference in the price of all the gas supplied to and further during the pendency of the appeals as permitted by orders made by the Court while disposing of the Appeals. The undertaking will be filed within four weeks from today. " ( 13 ) PURSUANT to that order, an undertaking was given by Mr. Prahladbhai S. Brahmbhatt, who was the Secretary of this company. The undertaking dated 27. 5. The undertaking will be filed within four weeks from today. " ( 13 ) PURSUANT to that order, an undertaking was given by Mr. Prahladbhai S. Brahmbhatt, who was the Secretary of this company. The undertaking dated 27. 5. 1987 reads as follows: ( 14 ) IT is relevant to note that, subsequently, those appeals filed by ONGC came to be allowed and the prices charged by ONGC for supply of gas to various respondents were upheld. The said judgment dated 4. 5. 1990 ONGC v. ASSOCIATION OF NATURAL GAS CONSUMING INDUSTRIES OF GUJARAT is reported in 1990 (Supplementary) Supreme Court Cases 397 and the interim order passed by the Hon. ble Supreme Court on 15. 4. 1987 is recorded in para 11 of the judgment appearing in the aforesaid report of the Supreme Court Cases. ( 15 ) INASMUCH as an application was to be moved to the Hon. ble Supreme Court (as directed by Balia J.) and orders were to be sought, interim protection of the properties was necessary. The properties were in the custody of the applicant Sunil Mills Ltd. in the meanwhile. Therefore, in para 10 of that order, the learned Judge further directed as follows:"10. THE Liquidator will place the orders of the Supreme Court, as soon as they are obtained. Meanwhile, the status quo as it exists today as to the possession of the said Unit No. 3 of the company in liquidation shall be maintained, subject to the claim of the Liquidator of the company to the said Mills and claim to usufruct of the property as may be directed by the Court. It is further ordered that the applicant company shall not alienate, encumber or part with possession of the undertaking in question in any manner whatsoever without prior permission of this court and shall furnish undertaking within a week to that effect and also to the effect that it shall reimburse Official Liquidator for usufruct and other charges that may be ultimately decided by the court. A personal undertaking to that effect shall also be furnished on behalf of the Directors of the Applicant Company alongwith undertaking on behalf of the applicant company. " ( 16 ) IN pursuance to that order, one Undertaking affirmed on 21. 8. A personal undertaking to that effect shall also be furnished on behalf of the Directors of the Applicant Company alongwith undertaking on behalf of the applicant company. " ( 16 ) IN pursuance to that order, one Undertaking affirmed on 21. 8. 1997 has been filed by one Jayeshbhai R. Shah, who claims to be the Director of this mill on behalf of Sunil Mills Ltd. He has also filed another undertaking affirmed on the same day in his personal capacity. The order of the leaned Judge required personal undertakings to be furnished on behalf of the Directors of the applicant company. The applicant is a public limited company and under Section 252 (1) of the Companies Act, 1956 a public limited company shall have at least three directors. The undertaking given by Shri J ayeshbai R. Shah is only in his personal capacity and it does not state anywhere that it is on behalf of the other directors of the applicant company. No other director has filed any undertaking pursuant to that order. ( 17 ) PURSUANT to the aforesaid order passed by the learned Judge, an application was moved for directions to the Hon. ble Supreme Court which came to be numbered as I. A. Nos. 168-178 in Civil Appeal No. 8530-40 of 1983. In that application filed by the Official Liquidator, the aforesaid circumstances were placed before the Hon. ble Supreme Court including the order passed by the single Judge. In para 10 of the application, it was averred as follows:"10. THE present application is being made by the Applicant pursuant to the aforesaid order of the High Court of Gujarat praying that the Applicant herein be permitted to sell the immovable assets of the company as may be directed by the Honourable High Court of Gujarat and to disbursethe sale proceeds in accordance with law. " The principal prayer in that application, namely, 12 (A) was as follows:"in the premises aforesaid, the Applicant most humbly and respectfully prays that: (A) This Honourable Court would be pleased to permit the Official Liquidator to sell the immovable properties of the said company as may be directed by the Gujarat High Court and to disburse the sale proceeds in accordance with law. " ( 18 ) THEREAFTER, the matter was considered by the Hon. ble Supreme Court on 17. 10. " ( 18 ) THEREAFTER, the matter was considered by the Hon. ble Supreme Court on 17. 10. 1997 where the court passed the following order:"upon hearing counsel the Court made the following ORDER all that is necessary to be said is that out of the assets of the company under liquidation, the dues of ONGC Ltd. are required to be paid off first and the question of making any payment to any other creditor can arise only out of the surplus if any remaining after the full dues of the ONGC have been paid off. The High Court is, therefore, to proceed with the matter in this manner. IAs stand disposed of. " ( 19 ) IN the circumstances, it was submitted on behalf of the applicant that the applicant company was deceived as stated in para 10 of their application and the order and the undertaking given to the Supreme Court was not disclosed to the applicant. It is stated that the applicant tried to revive the unit and had approached the BIFR for that. It had applied that the textile unit at Baroda be excluded from the winding-up proceedings. That request came to be rejected. It is further stated that subsequent to the winding-up order, all the circumstances were brought to the notice of the learned Judge who was taking this application and pursuant to the order passed by the learned Judge, the Official Liquidator was directed to move the Supreme Court whereupon, as per the above order dated 17. 10. 1997, impliedly a leave to sell the assets of the mill company was granted by the Hon. ble Supreme Court so long as the dues of ONGC are paid first. It is, therefore, submitted that the applicant had a pre-existing agreement entered into with Shri Ambica Mills Ltd. which was entered prior to the winding-up of the mill company and it would be in the fitness of things that now when an implied leave to sell the assets has been granted by the Hon. ble Supreme Court, the Official Liquidator ought to be directed to execute the conveyance in terms of that pre-existing agreement dated 2. 9. 1989. It is submitted that in the facts as narrated above, such an order would be a perfectly equitable and legal order. 9. 1989. It is submitted that in the facts as narrated above, such an order would be a perfectly equitable and legal order. Alternatively, however, it is submitted that in the event the Official Liquidator opposes the prayer for executing the conveyance, the applicant company ought to be permitted to file a suit seeking specific performance of that agreement. ( 20 ) AN affidavit-in-reply has been filed on behalf of the Official Liquidator affirmed on 15. 12. 1998. A copy of this affidavit was served in advance on the applicants advocate on 11. 12. 1998 and hence on the same day i. e. on 15. 12. 1998 they filed a rejoinder which is styled as a "preliminary Affidavit in Rejoinder". They also gave a notice calling upon the Official Liquidator to produce the following two sets of documents: (I) a copy of the Resolution dated 30. 3. 1989 passed in the Extraordinary General Meeting of the company in liquidation for transfer of Unit No. 3 to the applicant company; and (II) copies of the Annual Reports for the year 1989-90 onwards. Pursuant to that notice, a further affidavit was filed by the Official Liquidator which is affirmed on 21. 12. 1998. . ( 21 ) IT would be convenient to complete the recording of applicants submissions first. Hence, if the rejoinder filed by the applicant is referred first, it is seen that it, principally, contends that the reply of the Official Liquidator was belatedly filed and that many of the necessary documents have not been annexed. It is further submitted that provisions of Section 441 (2) of the Companies Act would not be relevant as far as this proceeding is concerned inasmuch as the winding up order is passed in pursuance to the order of BIFR under Section 20 of the SIC Act. Thereafter, it is contended that the company having derived the benefits under the agreement, it is estopped from challenging the validity thereof. In para 6 of its rejoinder, it is stated as follows:"failure to mention the factum of the interim injunction granted by the Hon. ble Supreme Court of India in the Explanatory Statement would not render the resolution passed at the Extraordinary General Meeting held on 30. 3. 1989 invalid. Such a plea in any case is not open to the Official Liquidator. "it is further stated therein that by the order dated 17. 10. 3. 1989 invalid. Such a plea in any case is not open to the Official Liquidator. "it is further stated therein that by the order dated 17. 10. 1997, the Hon. ble Supreme Court has granted a general permission and the agreement is perfectly valid and enforceable. With respect to the submissions that the Debenture holders are not discharged, it is stated in para 9 of the rejoinder: "it ought to be appreciated that the conveyance could not be completed because of the default on the part of the company. The applicant therefore cannot be called upon to make the payment in terms of the agreement or get the company released and discharged of its obligations to the debentureholders or the debenture trustees". ( 22 ) NOW, if we refer to the affidavit-in-reply filed on behalf of the Official Liquidator as also his further affidavit, it is firstly submitted therein that the winding-up proceedings are deemed to have commenced from 12. 4. 1988 inasmuch as the first winding-up petition No. 66 of 1988 was filed on 12. 4. 1988. Secondly, the agreement dated 2. 9. 1989 is in complete violence of the injunction issued by the Hon. ble Supreme Court on 15. 4. 1987 and the undertaking given on 27. 5. 1987. Thus, the agreement is void under Section 24 read with Section 23 of the Indian Contract Act, 1872 and therefore no rights flow therefrom. It is further stated in para 5 of the reply that while passing the resolution in the Extraordinary General Meeting of shareholders held on 30. 3. 1989 for seeking sanction for sale of the assets of the mill company, the explanatory statement accompanying the notice did not disclose the fundamental and material fact that the Hon. ble Supreme Court had issued an injunction dated 15. 4. 1987 and that an Undertaking had also been given in pursuance thereto. It is, therefore, submitted that the resolution passed is bad in law under Section 293 (1) (a) and Section 173 (1) (b) read with Section 173 (2) of the Companies Act, 1956. ( 23 ) IT is further submitted in the affidavit-in-reply that all that the applicant company gave to the respondent company was an amount of Rs. 5,00,000 by way of earnest money. The applicant took over from the vendor the liability to discharge the debentureholders who held debentures worth Rs. 3,95,00,000. ( 23 ) IT is further submitted in the affidavit-in-reply that all that the applicant company gave to the respondent company was an amount of Rs. 5,00,000 by way of earnest money. The applicant took over from the vendor the liability to discharge the debentureholders who held debentures worth Rs. 3,95,00,000. These debentures were to be redeemed by 13. 8. 1993. The agreement clause 2 (c) refers to these debentures as 15% Non-convertible Debentures Issue (1993 ). In Clause 6 (j) of the agreement it is mentioned that these debentures were redeemable on 13. 8. 1993. This is also recorded at page 18 in Schedule III which mentions the secured loans in the annual report of 1989-90. To this agreement a schedule is annexed which is marked as schedule -A which gives the names of the debenture honders. They are split into three parts. The first part pertains to ARMY GROUP INSURANCE FUND. The second part includes various FINANCIAL INSTITUTIONS and the third part is of GENERAL PUBLIC. The I. C. I. C. I. was the lead manager for these debentures as stated in para 8 of the application and by their letter dated 31. 8. 1989, ICICI agreed in principle vide para (ii) thereof that redemption date of the debentures (other than those held by the public) may be extended upto 31. 3. 1995. The debentures held by the public together with interest would however be redeemed on due date. It is stated in the affidavit-in-reply that these payments were not made either in August 1993 to the General Public or in March 1995 to the financial institutions. It is further stated in para 13 of the reply that the so-called permission under the Urban Land (Ceiling and Regulations) Act 1976 is not produced. In para 14 of the reply it is stated that the statement in the application regarding various expenses incurred by the applicant for the company is not accepted and in any case if any such expenses are incurred, the same were incurred for profit and for running its own business. It is further asserted that if the applicant was paying approximately Rs. 2. It is further asserted that if the applicant was paying approximately Rs. 2. 5 crores per annum by way of revenue (as claimed in para 14 of the application), it must have been getting huge production with the use of properties of the company, the possession of which is acquired with the payment of a meagre amount of Rs. 5 lacs. That apart, in para 7 of the reply it is further affirmed that, whereas the agreement requires Rs. 3. 95 crores to be paid to the debenture holders, firstly, the applicant has nowhere stated that it ever was and is ready and willing to perform its part of obligation under the agreement; secondly, such a course was not open in view of the undertaking given to the Hon. ble Supreme Court and the injunction granted by the Supreme Court and, lastly, in any case, it has become void by reason of it becoming unlawful on account an event which could not be prevented by the promisor and thus it has become impossible or unlawful of performance in view of the subsequent Supreme Court order of 17. 10. 1997. The further affidavit affirmed on 21. 12. 1998 encloses therewith a photocopy of the minutes of the General body meeting held on 30. 3. 1989. It shows that the subject concerning sale of this particular unit was taken up for consideration on that day. Form No. 23 whereunder resolution is required to be forwarded to the Registrar of Companies is also produced. That form is signed by the above-referred Shri Prahladbhai S. Brahmbhatt who had earlier given the above-referred Undertaking to the Hon. ble Supreme Court. Along with the form, the resolution is annexed as also the explanatory statement as required by Section 173. The explanatory statement runs into two pages, but there is no mention whatsoever therein of the injunction granted by the Supreme Court and the Undertaking given thereafter. ( 24 ) IN the light of this factual narration, Mr. Nanavati, Senior Advocate, as well as Mr. Chudgar appearing for the applicant company submitted that the applicant company was in dark in respect of the injunction granted by the Supreme Court and the Undertaking given on behalf of Shri Ambica Mills Ltd. It is submitted by Mr. Nanavati that all that was informed to the applicant company was what was contained in para 14 of the agreement. Chudgar appearing for the applicant company submitted that the applicant company was in dark in respect of the injunction granted by the Supreme Court and the Undertaking given on behalf of Shri Ambica Mills Ltd. It is submitted by Mr. Nanavati that all that was informed to the applicant company was what was contained in para 14 of the agreement. Para 14 of the agreement refers to the dispute between ONGC and Shri Ambica Mills Ltd. and that a writ petition was pending in the Gujarat High Court in respect thereof. This para also contains an indemnity by the vendor that, in the event any claims are raised by ONGC on the purchaser, the vendor agrees and undertakes to indemnify the purchaser. It was, therefore, submitted by Mr. Nanavati and Mr. Chudgar that the applicant company was a bona fide purchaser and it should not be made to suffer inasmuch as it was deceived by Shri Ambica Mills Ltd. as stated in para 10 of their application. The second submission is that assuming that there was any such injunction or undertaking, if one closely scrutinize the order passed by the Hon. ble Supreme Court, what was directed was that the company will not charge, encumber or alienate except with the leave of the Supreme Court any of their immovable assets. It was submitted that the company had entered into an agreement for sale and no outright sale was effected by effecting conveyance deed which could be done with the leave of the court. It was further submitted that this cannot be considered as encumbering the property. Mr. Chudgar relied upon the definition of the word charge as appearing in the Transfer of Property Act 1882, and submitted that charge is an act where immovable property is made security for the payment of money to another and the transaction does not amount to a mortgage. As far as encumbrance is concerned, Mr. Chudgar relied upon the definition of this concept in various dictionaries including Concise Oxford Dictionary (Ninth Edition), Blacks Law Dictionary (Fifth edition) and Random House Dictionary (unabridged edition ). The third submission of the applicant was that the agreement was not void but at the most voidable. Comparing the injunction granted by the Supreme Court with the restriction created under Section 43 (1) of the Bombay Tenancy and Agriculture Lands Act (prior to its amendment of 1997), Mr. The third submission of the applicant was that the agreement was not void but at the most voidable. Comparing the injunction granted by the Supreme Court with the restriction created under Section 43 (1) of the Bombay Tenancy and Agriculture Lands Act (prior to its amendment of 1997), Mr. Chudgar submitted that a subsequent sanction could be granted under that Act and similarly in the present case as well. He relied upon two decisions of this court reported in 16 (1975) GLR 247 and 24 (2) (1983) GLR 1165 in this behalf. He has also relied on the judgment of the Supreme Court in the case of NATHULAL v. PHOOLCHAND reported in AIR 1970 Supreme Court 546 to contend that when a statute prescribes a prior permission of an authority before sale, an agreement to transfer is not void but it must be deemed to be subject to implied condition that the transferer will obtain sanction of the authority concerned. The next submission of Mr. Chudgar in this behalf was that failure to mention the injunction and the undertaking in the explanatory statement would even otherwise also not make the resolution passed under Section 293 (1) (a) bad. He submits that, at the most, the agreement could be said to be a voidable one but not void ab initio. He further submitted that the applicant has put in a good amount of money and they have also taken efforts to run the enterprise for a substantial period and, therefore, it was desirable and necessary that the Official Liquidator be directed to execute the conveyance in favour of the applicant. Mr. Chudgar also submitted that violation of the injunction may at the highest invite penal consequences against the vendor. Mr. Chudgar relied upon various judgments in support reported in AIR 1938 Lah 220; AIR 1920 Nagpur 12; AIR 1989 Orissa 148, AIR 1992 Pandh 237, AIR 1969 AP 167 , AIR 1669 Orissa 195 in that behalf. The fourth submission of Mr. Chudgar was that the agreement cannot by any stretch of imagination be said to be opposed to public policy or prohibited by any law. He also relied upon the judgment of the Supreme Court in AIR 1959 SC 781 and AIR 1960 SC 213 in this behalf. ( 25 ) AS against the aforesaid submissions of Mr. Chudgar, Mr. Chudgar was that the agreement cannot by any stretch of imagination be said to be opposed to public policy or prohibited by any law. He also relied upon the judgment of the Supreme Court in AIR 1959 SC 781 and AIR 1960 SC 213 in this behalf. ( 25 ) AS against the aforesaid submissions of Mr. Chudgar, Mr. Shah submitted that the applicants first submission that the applicant company was a bona fide and innocent purchaser itself is very doubtful. The agreement clearly informed the applicant that a dispute with respect to the price to be paid to ONGC was pending in the High Court. Even if one takes the agreement on the face of it, the applicant company had agreed to pay an amount of Rs. 4,01,00,000. It is true that only Rs. 5 lacs were to be paid as down payment but the applicant was taking over the responsibility to pay Rs. 3. 95 crores towards the debenture holders and had agreed to pay Rs. 1,00,000 at the time of conveyance. Any party which agrees to take such responsibility is bound to make full inquiries with respect to the litigation that was, to its knowledge, then pending in the High Court and as to what happened in that matter and what has happened subsequent thereto. If on the date of agreement the applicant knew that the said litigation was pending, it would certainly follow it up because it would become successor in interest to the mill company and it was expected to follow it up. It cannot, therefore, lie in the mouth of the applicant to say that they were not aware of the orders passed by the Hon. ble Supreme Court. If it did not make any such inquiries and in consequence thereof the whole truth was not known, it would be doing so at their own peril. As observed by the single Judge of this court in JAISINGH (supra) reported in 13 GLR 779, by merely saying that he was a bona fide purchaser one does not become a bona fide purchaser. In the instant case, the applicant had approached the appellate authority i. e. AAIFR which in terms observed that the property of the mill was purchased at a throwaway price. Those observations were not at all disturbed by challenging that order or by getting it set aside. In the instant case, the applicant had approached the appellate authority i. e. AAIFR which in terms observed that the property of the mill was purchased at a throwaway price. Those observations were not at all disturbed by challenging that order or by getting it set aside. The property which was being sold was admeasuring in the aggregate to 76,175 sq. mtrs. It is situated near Old Padra Road near Baroda Railway station. The area when converted into square yards comes to 91,118 square yards. Mr. Shah appearing for the Official Liquidator submits that, even on a very conservative estimate, the price of the land in that area in the year 1989 was at least Rs. 1000. 00 per square yard. Thus, the land would be worth at least Rs. 9. 1 crores. This value is arrived at excluding plant, machinery, factory building and employees quarters which were also sought to be sold, and if their value is added, the value of Unit No. 3 would be at least Rs. 12 crores. In the circumstances, the plea of innocence cannot be permitted to be taken by a purchaser of such a huge property. The contention of Mr. Shah is well taken. The law requires any such purchaser to make the necessary inquiry particularly when it was informed of a litigation between the parties and also particularly when possession of such a huge property consisting of land, factory, machinery and the employees quarters was being handed over at the down payment of only Rs. 5 lacs. On the other hand, the other possibility is that the applicant was in collusion with the former directors of the company in liquidation, without which it would not get this huge and expensive property at the down payment of Rs. 5 lacs (and for an agreed price of Rs. 4. 1 crores) which is rightly described as a throw-away price by the AAIFR. If the apparent consideration of the agreement is so negligible, the intentions of the applicant can certainly not be called as innocent and bona fide. The applicants are pretending too much. That is the least that can be said with respect to their first submission. ( 26 ) WITH respect to the submission of Mr. Chudgar that the agreement was a valid one at its inception and had subsequently become voidable at the most and not void, Mr. The applicants are pretending too much. That is the least that can be said with respect to their first submission. ( 26 ) WITH respect to the submission of Mr. Chudgar that the agreement was a valid one at its inception and had subsequently become voidable at the most and not void, Mr. Shah submitted that the same was not tenable also for two main reasons: firstly, as stated above, the agreement was entered in flagrant violation of the order of injunction granted by the Supreme Court and the solemn undertaking given to the Apex Court. It is very material to note that the same very Mr. Prahaladbhai S. Brahmbhatt who has given the Undertaking to the Hon. ble Supreme Court has signed the Explanatory Statement under Section 173 (2) of the Act which is totally silent about the order of the Supreme Court as also the undertaking given to it. It is also very relevant to note that Mr. Brahmbhatt has signed the Explanatory Statement by the order of the Board of Directors. If that was so, all the members of the Board were also responsible for this violation of the order and the undertaking given to the Supreme Court. The same very Mr. Brahmbhatt has signed the requisite Form No. 23 and the forwarding letter sending the form with the resolution to the Registrar of Companies. Mr. Chudgar sought to contend that what was prevented under the order of the Supreme Court was creation of a charge or encumbrance or alienation except with the leave of the court. It is perhaps possible to contend that the agreement entered into did not amount to a charge because, admittedly, it was an agreement for sale and it is also possible to contend that an alienation has not taken place inasmuch as the conveyance was yet to be executed. However, in my view, apart from the fact that the entire order (including these restrictions) has to be read together; the first part of the Supreme Court order also includes a restraint on encumbrance. The definitions of encumbrance referred to and relied upon by Mr. Chudgar clearly include an element of creating a burden on the property. By no stretch of imagination can it be said that this agreement for sale did not create a burden or an encumbrance on the property concerned. The definitions of encumbrance referred to and relied upon by Mr. Chudgar clearly include an element of creating a burden on the property. By no stretch of imagination can it be said that this agreement for sale did not create a burden or an encumbrance on the property concerned. ( 27 ) HOWEVER, that is not the only part of the restrictions. The other part of the direction of the Supreme Court was that the property will be made available for discharging the respective liabilities on account of the difference of price of all the gas supplied and further, during the pendency of the appeals as permitted by orders made by the court while disposing of the appeals. Again, if we look to the order of the Hon. ble Supreme Court, what was submitted to the court and what was contemplated was that the mill company will be run by the then management. If any alienation of the property to any third party was contemplated or was to be permitted, firstly the court could have said that. Thus, on the one hand what was submitted to the court was that in the interest of the large work-force, ONGC ought to be directed to make available gas on the concessional rate and the establishment will be run by very management. On the other hand, if we look to the entire agreement, it is clear that from the date on which the possession was handed over to the applicant herein, all the liabilities were passed on. At the end of Clause 13 of the agrement it is specifically provided: "after the date of possession, the purchaser shall be bound and liable to clear, pay and discharge all outgoing liabilities in respect of the said undertaking". If one looks to the various clauses of this agreement, it is clear as if the date of putting the applicant into possession was like a cut-off date, and from that date all the liabilities go over to the purchasing party. It is stated in the application that possession was handed over in December 1989. Thus, it is apparent that though the document is styled as an agreement to sell, it is almost in the nature of a conveyance. It is, therefore, easy to say that the agreement has not caused any alienation. It is stated in the application that possession was handed over in December 1989. Thus, it is apparent that though the document is styled as an agreement to sell, it is almost in the nature of a conveyance. It is, therefore, easy to say that the agreement has not caused any alienation. But, that is only on paper and not in reality and, in any case, it definitely creates an encumbrance or burden on the property. Moreover, the second part of the restrictions imposed by the Hon. ble Supreme Court are also clearly flouted inasmuch as the property is no longer kept free and available for discharging the liabilities which would flow subsequently to ONGC. The party which seeks execution of conveyance deed and in the alternative wants to file a suit for specific performance of an agreement, must show that the consideration and objects of the agreement are lawful and the same are not forbidden by law including a court order. They have failed in the same. ( 28 ) WITH respect to the claim of ONGC and the responsibility of company in winding-up, the Orders of the the Hon. ble Supreme Court have been very clear all throughout. Initially, there was an injunction restraining the company from creating any charge, encumbrance or alienation of the property and the company was directed to keep its assets available for clearing the dues of ONGC. Subsequently, the applicant moved an application before the BIFR to alienate Unit No. 3 from the winding-up proceeding as is stated in para 16 of the affidavit of Jayesh R. Shah dated 23. 4. 1997 in support of the present application. Para 17 of the affidavit says that the Board was of the opinion that since Shri Ambica Mills Ltd. had given the undertaking to the Supreme Court for not transferring any of its assets, the applicants should approach the Hon. ble Supreme Court. Para 18 of the affidavit states that the applicants thereafter moved the Supreme Court by filing an application. Thus, the application to the Supreme Court was seeking transfer of the assets to the applicant as can be seen from paras 16, 17 and 18 of their affidavit. Para 18 of the affidavit states that the applicants thereafter moved the Supreme Court by filing an application. Thus, the application to the Supreme Court was seeking transfer of the assets to the applicant as can be seen from paras 16, 17 and 18 of their affidavit. In para 19 of the affidavit it is mentioned that the said Interim Application was numbered as 135-45 in Civil Application No. 8530-40 of 1983 and that the said Interim Application was subsequently rejected by the Hon. ble Supreme Court on 5. 2. 1996. That order alone has been produced but not the I. A. No. 135-45. But, in any way, from the reading of these three paras, it is clear that the application was moved seeking/permitting transfer of the assets to the applicant and that application was dismissed by the Hon. ble Supreme Court. Thereafter also, when the Official Liquidator moved the application to the Hon. ble Supreme Court subsequent to the order of Balia. J. , it cannot be said that the Supreme Court has permitted or directed execution of the agreement. The order passed by the Hon. ble Supreme Court on Interim Application No. 168-178 is also clear enough and it states that the ONGC is required to be paid off first out of the assets of the company under liquidation. The High Court is, therefore, to proceed with the matter in this manner. Thus, the Supreme Court had granted an injunction much prior to the disputed agreement. The Supreme Court dismissed the Applicants application seeking alienation of the property moved subsequent to the agreement and, thirdly, even subsequent to the winding-up order, the Hon. ble Supreme Court has not changed that position and has maintained that the dues of the ONGC are to be paid [[first. In the circumstances, the consideration of the agreement being unlawful and being forbidden by law and courts orders, the agreement would be void at its inception under Section 23 read with Section 24 of the Indian Contract Act. The plea of the applicant that the agreement was initialy void and had at the most become voidable subsequently, has to be rejected. The plea of the applicant that the agreement was initialy void and had at the most become voidable subsequently, has to be rejected. ( 29 ) THE agreement will also have to be considered as opposed to public policy inasmuch as no such agreement can be permitted which is contrary to and violative of the injunction and the undertaking given to the court, much less the Hon. ble Supreme Court of India. The two judgments cited by Mr. Chudgar concerning public policy do not help him. In GHERULAL PARAKH V. MAHADEODAS MAIYA reported in AIR 1959 Supreme Court 781, the Supreme Court was concerned with wagering contract. The Hon. ble Supreme Court held that though wager was void, it was not forbidden by law and in that context the Supreme Court observed as under:"there is no definite head or principle of public policy evolved by Courts or laid down by precedents which would directly apply to wagering contracts. Even if it is permissible for Courts to evolve a new head of public policy under extraordinary circumstances giving rise to incontestable harm to the society, wager is not one of such instances of exceptional gravity, for it has been recognized for centuries and has been tolerated by the public and the State alike". In KEDAR NATH MOTANI V. PRAHLAD RAI reported in AIR 1960 Supreme Court 213, The Hon. ble Supreme Court observed that it is necessary to see as to whether there was a conspiracy to defraud third parties and whether the illegality goes to the root of the matter. One does not know how this authority in any way helps the applicant. The Hon. ble Supreme Court in this matter observed: "a strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts". In the facts of the present case, the aforesaid observations will, in fact, apply with full force against the applicant and the attempt to enforce the agreement in violation of courts injunction and statutory provisions will have to be held as opposed to public policy. ( 30 ) BESIDES, a party seeking specific performance must show that it has complied with its part of the agreement. As is seen earlier, all that the applicants have given in pursuance to the agreement is only Rs. ( 30 ) BESIDES, a party seeking specific performance must show that it has complied with its part of the agreement. As is seen earlier, all that the applicants have given in pursuance to the agreement is only Rs. 5 lacs to the company in liquidation. They were required to redeem the debentures in August 1993 by making payment of Rs. 3. 95 crores, but that has not been done. It is clearly a case wherein though the applicant was being given a valuable property at a throw-away price, whatever was the consideration agreed under the agreement was not paid by the applicant company. In a circumstance like this, it cannot claim execution of conveyance or specific performance of the agreement. It was sought to be contended by Mr. Nanavati that the occasion to redeem the debentures has not come and the applicant was still ready to make that payment to the debentureholders. Now, as [ has been recorded in the agreement itself, the debentures were to be redeemed in August 1993 and that having not been admittedly done, there is, in fact, a breach and frailure on the part of the applicant to act in accordance with the agreement. What is interesting to note is that, in para 9 of their preliminary affidavit-in-rejoinder, the applicants have clearly stated that the conveyance could not be completed because of default on the part of the company and therefore the applicants cannot be called upon to make the payment in terms of the agreement or get the company released and discharged of its obligations to the debentureholders or debenture-trustees. Now, one does not know what was the default on the part of the company. The company had put the applicant in possession of the property in its entirety. It was clearly disclosed to the applicant that proceedings were pending in the High Court concerning the claims of ONGC and it was expected of the applicants to find out as to what was that proceeding. Whether the directors of the company have deceived the applicants as claimed by them or whether the applicants have not made the necessary inquiries, the fact remains that the company cannot be faulted for the breach of the agreement. No document has been produced to show that in August 1993 or thereafter the applicant company ever offered payment of Rs. 3. No document has been produced to show that in August 1993 or thereafter the applicant company ever offered payment of Rs. 3. 95 crores nor is there any letter produced thereafter or along with the affidavits calling upon the company to execute the conveyance, the applicants having complied with all the requirements of the agreement as claimed by them. ( 31 ) IT is further material to note that in the affidavit in support of the application a few statements have been made with respect to some subsequent payment. Thus, for example, it is stated in para 14 of the application that with a view to make the unit viable, the applicant retrenched some 800 employees and paid their legal dues to the tune of Rs. 2 crores. It is further stated that they incurred expenses to the tune of Rs. 4. 5 crores for modernisation of the unit and that they were running the spinning section by employing 500 employees paying Rs. 15 lacs per month. Mr. Shah for the respondent states that assuming without admitting that any such thing was done, that was as a part of the business enterprise and that cannot be pleaded as something done towards the applicants responsibility under the agreement. In fact, what is further interesting to note is that at the end of para 14 of the Application it is lastly stated that the applicant company is paying approximately Rs. 2. 5 crores per annum by way of revenue. If that is so, the applicants have not been doing any charity to anybody and, if that is the payment made to the revenue, the applicants must have taken huge production with the use of the said property and must have made huge profits all throughout. That apart, as far as the alleged payments to the workers to pay their dues or their monthly payments are concerned, no document worth the name has been either produced or relied upon in support thereof. Thus, it is clear that the applicant had failed to comply with their part of the agreement and are, in fact, in complete brach thereof. ( 32 ) THEN, there is another aspect of the matter, as to whether the consideration or the object of the agreement is of such a nature that, if permitted, it would defeat any specific statutory provision. ( 32 ) THEN, there is another aspect of the matter, as to whether the consideration or the object of the agreement is of such a nature that, if permitted, it would defeat any specific statutory provision. Section 293 (1) (a) of the Companies Act requires a company not to sell, lease or otherwise dispose of the whole or substantialy the whole of the undertaking of the company except with the consent of the public company in its general meeting. That consent is to be obtained after informing the shareholders accordingly in the meeting to be held for that purpose. Any such business would be a special business under Section 173 (1) (b) of the Companies Act and where such a business is to be transacted, it is mandatory that a statement setting out the material facts concerning each such item of business (including any opportunity, nature of the concern or interest, if any therein, of any director and the manager, if any) is to be annexed to the notice of the meeting. That is the requirement of Section 173 (2) of the Act. As seen above, although a meeting was called, the shareholders were completely kept in dark of the order passed by the Supreme Court restraining any such disposition of property and requiring that the property should be kept intact and available for clearing the dues of ONGC. ( 33 ) AS far as the requirements of Sections 173 and 293 (1) (a) are concerned, they have long been held to be mandatory in S. M. GANAPAT RAM v. SHRI SAYAJI JUBILEE COTTON and JUTE MILLS CO. LTD. reported in (1964) 34 Company Cases 777. Hon. ble Justice Bhagwati (as he then was in this court) dealt with an almost identical contract and after considering the submissions made by rival parties held as follows:" It is, therefore, clear that regard must be had to the whole scope and purpose of the statute for the purpose of determining whether the statute is mandatory or directory. Judged by that test, the conclusion is irresistible that section 173 enacts a provision which is mandatory and not directory. Judged by that test, the conclusion is irresistible that section 173 enacts a provision which is mandatory and not directory. The object of enacting section 173 is to secure that all facts which have a bearing on the question on which the shareholders have to form their judgment are brought to the notice of the shareholders so that the shareholders can exercise an intelligent judgment. The provision is enacted in the interests of the shareholders so that the material facts concerning the item of business to be transacted at the meeting are before the shareholders and they also know what is the nature of the concern or interest of the management in such item of business, the idea being that the shareholders may not be duped by the management and may not be persuaded to act in the manner desired by the management unless they have formed their own judgment on the question after being placed in full possession of all material facts and apprised of the interest of the management in any particular action being taken. Having regard to the whole purpose and scope of the provision enacted in section 173, I am of the opinion that it is mandatory and not directory and that any disobedience to its requirements must lead to nullification of the action taken. If, therefore, there was any contravention of the provisions of section 173, the meeting of the company held on 5th September 1961, would be invalid and so also would be the resolution passed at that meeting be invalid". The same view has been reiterated by a single Judge of Madras High Court in the case of V. G. BALASUNDARAM v. NEW THEATRES CARNATIC TALKIES PVT. LTD. reported in (1993) 77 Company Cases 324. At page 349, the learned Judge has observed as follows:" Section 173 of the Act deals with the explanatory statement to be annexed to the notice. The appointment of directors can be under two circumstances: (a) directors retiring by rotation or being reappointed. In that case, no explanatory statement is required. The object of enacting section 173 is to secure that all facts which have a bearing on the question on which the shareholders hav[e to form their judgment are brought to the notice of the shareholders so that the shareholders can exercise an intelligent judgment. In that case, no explanatory statement is required. The object of enacting section 173 is to secure that all facts which have a bearing on the question on which the shareholders hav[e to form their judgment are brought to the notice of the shareholders so that the shareholders can exercise an intelligent judgment. The provision is enacted in the interests of the shareholders so that the material facts concerning the item of business to be transacted at the meeting are before the shareholders and they also know what is the concern or interest of the management in any item of business, the idea being that the shareholders may not be duped by the management and may not be persuaded to act in the manner desired by the management unless they have formed their own judgment on the question after being placed in full possession of all the material facts and apprised of the interest of the management in any particular action being taken". It is relevant to note that the learned Judge has followed the law laid down by the single Judge of this court in the earlier mentioned judgment and concurred with it in its entirety. Thus, when a resolution is passed without disclosing material facts in the explanatory statement in flagrant violation of the requirement of Section 173 of the Companies Act, it cannot be said to be anything but a void resolution and an agreement on the strength of a void resolution if permitted would defeat the provisions of law. As observed in SHRI SAYAJI JUBILEE MILLS CASE (supra), such a resolution would be invalid and the meeting would also be invalid and thus the entire action based on that would be void. The learned Judge of the Madras High Court has called such a meeting as virtually an ex parte meeting. ( 34 ) THERE is one more aspect of the matter, namely, that, in any case, now there is no question of permitting this conveyance to be executed in terms of the agreement. In fact, it should be said that under the orders of the Supreme Court right from the beginning the position was very clear that the property of the mill company was to be kept available for clearing the dues of ONGC. In fact, it should be said that under the orders of the Supreme Court right from the beginning the position was very clear that the property of the mill company was to be kept available for clearing the dues of ONGC. Even so, once again after the company going into liquidation and the Official Liquidator having pointed out the agreement (in due deference to the order passed by the single Judge of this court), the Supreme Court again reiterated that even in the liquidation proceedings, the payment of ONGC is to be cleared first. That being so, there is no question of now acting on this agreement by paying the amount of Rs. 3. 95 crores to the debenture holders. The dues of ONGC are to be paid off first and thus the agrement will have to be considered as void as it would be requiring to do an act impossible of performance or the performance of which is prohibited by the Supreme Court order and if permitted would be unlawful. Thus the agreement will have to be considered as impossible even under the second clause of Section 56 of the Contract Act by reason of this subsequent event. ( 35 ) THUS, as discussed above, in the facts of the present case, an agreement has been entered into in flagrant violence of the injunction granted by the Hon. ble Supreme Court and in complete breach of the provisions of the Companies Act. In view of the above discussion, the various authorities cited by Mr. Chudgar, firstly, relying upon the provisions of the Bombay Tenancy and Agricultural Lands Act and, secondly, to contend that the present agreement is at the most voidable, can be of no avail. In the two cases concerning Section 43 (1) of the Bombay Tenancy and Agricultural Lands Act, the learned single Judges were concerned with the interpretation of the particular section. In the present case, we are not concerned with the interpretation of any statute but with the order passed by the Supreme Court and this is also on the background that when the Supreme Court has in three different occasions passed clear and consistant orders. Initially an injunction was granted on 15. 4. 1987. Thereafter, Interim Application No. 135-45 seeking/ permitting transfer of assets to the present applicant was rejected by the Hon. ble Supreme Court on 5. 2. Initially an injunction was granted on 15. 4. 1987. Thereafter, Interim Application No. 135-45 seeking/ permitting transfer of assets to the present applicant was rejected by the Hon. ble Supreme Court on 5. 2. 1996 and thereafter once again, subsequent to the order passed by Balia J. of this court, the Supreme Court has clarified that the proceeds from the sale of assets have to be, first, used to clear the dues of ONGC. In the two cases under the Bombay Tenancy and Agricultural Lands Act, the question was as to whether sale can be entered into before obtaining sanction of the Collector and whether possession of the person on the basis of an agreement without prior sanction is illegal. These quesions arose concerning interpretion of this specific section 43 (1) of the Act in the facts of those cases. As stated above, in the present case, we are not concerned with any statutory interpretation. What is sought to be canvassed is that in spite of the injunction initially granted by the Hon. ble Supreme Court, the agreement entered into in violation thereof is not a void one but a voidable one and the company should be directed to act in accordance therewith. What is sought to be done is to intpret the order of the Supreme Court in a convenient way. As stated above, we are not concenred with statutory interpretation herein. We are concerned with the successive orders in the facts of this very case which are very clear and which leave no room for any such interpretation as is sought to be canvassed. For the same reason, there can be no quarrel with the proposition in the judgment of the Hon. ble Supreme Court in the case of NATHULAL v. PHOOLCHAND (supra) wherein also, the court was concerned with the interpretation of Section 70 (8) of the Madhya Bharat Land Revenue Act and wherein the Hon. ble Supreme Court held that permission of the authority concerned can be obtained subsequently. Here, in the facts of the present case, when the Supreme Court passed injunction earlier and subsequently rejected the request of seeking/ permitting transfer of assets, the concerned order decided the controversy finally between the parties and they cannot be permitted to reagitate the issue once again. ( 36 ) SIMILAR is the position with respect to the other authorities with respect to voidability cited by Mr. ( 36 ) SIMILAR is the position with respect to the other authorities with respect to voidability cited by Mr. Chudgar. These authrities are sought to be relied upon with respect to breach of injunction of the courts order and the effect thereof. In LAL CHAND v. SOHAN LAL reported in AIR 1938 Lahore 220, a completed sale in contravention of injunction was held not be a nullity in the facts of that case. In DHARAMCHAND v. MITSUI BUSSAN KAISHA and CO. reported in AIR 1920 Nagpur 12, a sale in ignorance of the order of injunction was held only to be irregular in the facts of that case. Similarly, in the case of PRANAKRUSHNA v. UMAKANTA PANDA reported in AIR 1989 Orissa 148, a sale in ignorance of the order of temporay injunction was held to be voidable. In DALBARA SINGH v. CHHAJA SINGH reported in AIR 1992 Punjab and Haryana 237, in tha facts of that case, the Punjab and Haryana High Court took view that sale in breach of an injunction was not rendered nullity but the vendor was only liable for penal consequences. In KUSUMA DEI v. MALATI reported in AIr 1969 Orissa 195, in the facts of that case, sale of property during injunction period was held not to be nullity. What is relevant to note is that all these authorities are concerning concluded sales. In the present case, admittedly, conveyance is not effected. In the facts of the present case, that course of action is not available also for the reason that the application of the applicant seeking/ permitting alienation of the property was rejected by the Hon. ble Supreme Court when it rejected Interim Application No. 135-45. The facts of Andhra Pradesh judgment in the case of ADAPA VITTAL v. GOVULA RAMAKISTIAH reported in AIR 1969 Andhra Pradesh 167 are quite different. In that case, on facts, the court held that there was no breach of injunction and hence that authority has otherwise also no application to the facts of the present case. ( 37 ) THE next submission canvassed is that the order passed by the single Judge of this court earlier (Balia, J.) and the order passed by the Hon. ble Supreme Court on the Official Liquidators application has impliedly permitted the execution of the conveyance. ( 37 ) THE next submission canvassed is that the order passed by the single Judge of this court earlier (Balia, J.) and the order passed by the Hon. ble Supreme Court on the Official Liquidators application has impliedly permitted the execution of the conveyance. This submission cannot be accepted for a moment for the reason that the Supreme Court had turned down the very request earlier when it dismissed Interim Application Nos. 135-45 on 5. 2. 1996 and the question of validity of the agreement was not at all canvassed before Balia, J. It was only pointed out to the Hon. ble single Judge that there was an impediment under the orders of the Supreme Court and appropriate orders were necessary. It was in those circumstance that the learned Judge had permitted the Official Liquidator to move the Supreme Court. Nothing more can be read into the order of single Judge. It is also important to note that assuming that the conveyance is required to be executed for any reason as canvassed by the applicant, it is undoubtedly a disposition of the property after the commencement of the winding-up proceeding. The winding-up proceedings have begun in this case on 12. 4. 1988. Any such disposition of property after the commencement of the winding-up proceedings is void unless the court otherwise orders under Section 536 (2) of the Companies Act. Until validated, the agreement in question is void under Section 536 (2) of the Act. That being so, unless an application for validation is made and entertained, the agreement is void and conveyance cannot be directed to be executed in terms of such a void agreement. ( 38 ) THE alternate prayer of the applicant is to permit them to file the suit for specific performance of the agreement. As pointed out above, for various reasons, the specific performance cannot be permitted, the agreement being void, against public policy and contrary to various provisions of law. Permitting filing of such a suit would presupposes that prima facie the applicant has a case which could be gone into and considered by a court of law. As pointed out above, for various reasons, the specific performance cannot be permitted, the agreement being void, against public policy and contrary to various provisions of law. Permitting filing of such a suit would presupposes that prima facie the applicant has a case which could be gone into and considered by a court of law. In the present case, on the face of it, the agreement being void, contrary to public policy, hit by various provisions of law and the orders of the Supreme Court, there is no question of permitting the applicant to file or to proceed with a suit for specific performance of an agreement which is void. ( 39 ) FOR the reasons stated above, the application cannot be entertained any further and the same is dismissed with costs. This matter has been pending for last over two years and has been on Board for over twenty times. The applicant will pay costs of Rs. 10,000. 00 (rupees ten thousand) to the Official Liquidator. ( 40 ) WHEN the order of winding-up was passed by Pandit, J. on 17. 1. 1997, the Official Liquidator was directed to take charge of the company together with all its assets, records, books, machinery, spare parts, stores, manufactured goods, land and buildings etc. In view of the subsequent order passed by Balia J. on 6. 8. 1987, there has been status quo and the order passed on 17. 1. 1997 has not been enforced qua Unit No. 3. In view of the present Application being dismissed, the order of status quo will stand vacated and the Official Liquidator will be at liberty to act in accordance with the order dated 17. 1. 1997 passed by Pandit, J. He is expected to move at the earliest in accordance with law so as to safeguard the properties of the company and along therewith he will take steps to make inventory and to provide appropriate security. This Application is accordingly dismissed. . ( 41 ) MR. MEHTA applies for stay of this order. The directors of the applicant (other than one Jayesh R. Shah) have not filed the undertaking to protect the property though directed by Balia J. on 6. 8. 1997. It is, therefore, not possible to entertain this request. Mr. This Application is accordingly dismissed. . ( 41 ) MR. MEHTA applies for stay of this order. The directors of the applicant (other than one Jayesh R. Shah) have not filed the undertaking to protect the property though directed by Balia J. on 6. 8. 1997. It is, therefore, not possible to entertain this request. Mr. Shah for the Official Liquidator however states that the Official Liquidator will move to take possession of the property only after a copy of this order is available. He further states that he will wait for 48 hours after receipt of a copy of the order. Hence no stay as sought for. Liberty to the parties to apply in the event of any difficulty. .