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2009 DIGILAW 467 (KER)

In Re Official Liquidator v. ----

2009-06-11

ANTONY DOMINIC

body2009
Judgment : Heard the learned counsel for the Official Liquidator, Shri. Abraham Vakkanal for the 2nd respondent and Mr. P. Sanjay for the 3rd respondent. None appears for the 1st respondent. 2. Prayer sought in this report is to set aside Annexure III sale deed executed by the 1st respondent on behalf of the Company (in liquidation) in favour of the 3rd respondent, by which certain immovable properties of the Company were sold to the 3rd respondent. The ground on which, the sale is sought to be set aside, is that the disposal of the property was in violation of the provisions contained under S. 536(2) of the Companies Act, 1956. 3. The Company Petition, seeking the winding up of the Company, was filed on 19.10.2000. During the pendency of the petition, Annexure III sale deed was executed on 19.7.2002. Subsequently, the C.P. was dismissed by judgment dated 6.1.2003. However, the petitioners in the Company Petition filed M.F.A.No.227/2003 against the judgment in the C.P., and a Division Bench of this Court allowed the appeal, and the C.P. was thus restored to file. The petitioners were heard and on 6.2.2004, the Company was ordered to be wound up and Liquidator was appointed. 4. It is contended on behalf of the Official Liquidator that under S.536(2) of the CompaniesAct, in the case of winding up by Court any disposition of the property of the company, made after the commencement of the winding up, shall, unless the Court otherwise orders, be void. It is pointed out by the Official Liquidator that as per S. 441 of the Companies Act, 1956, the commencement of winding up is from the date of presentation of the petition for winding up. It is contended that, the winding up proceedings in this case commenced on 19.10.2000, and therefore, Annexure III sale deed executed on 19.7.2002 without obtaining the leave of the Court is void. 5. On the other hand, it is argued by the respondents that the C.P. was dismissed on 6.1.2003, and that M.F.A. No.227/2003 was allowed only by judgment dated 6.8.2003, and therefore, S.536(2) of the Act can apply only in respect of disposition of property, subsequent to 6.8.2003. It is also stated that the appeal filed by the 2nd respondent against the order dated 6.2.2004 winding up the Company is also pending before this Court. 6. It is also stated that the appeal filed by the 2nd respondent against the order dated 6.2.2004 winding up the Company is also pending before this Court. 6. S. 441 of the Companies Act, 1956, provides that the winding up proceedings will commence at the time of presentation of the petition for winding up. Therefore, the winding up in question has commenced on 19.10.2000, and the sale in question was effected on 19.7.2002. This evidently, is after the commencement of the winding up proceedings. S.536(2) of the Act provides that any disposition of property after the commencement of winding up, shall unless otherwise ordered by the Court, be void. In this case, leave of the Company Court was not obtained and therefore, disposition of property by Annexure III sale deed is hit by S. 536(2) of the Companies Act and is void. 7. The only issue is whether the dismissal of the C.P. on 6.1 .2003, and its restoration by judgment in MFANo.227/2003 dated 6.8.2003 is of any consequence, in so far as the validity of the sale deed executed prior to 6.8.2003 is concerned. In my view, the appeal is only a continuation of the proceedings and once the Division Bench has allowed the appeal, and the C.P. is restored to file, necessarily the proceedings will relate back and hence the commencement of the winding up is from the date when the C.P. was presented, viz., 19.10.2000. So viewed, since the disposition in question was effected after the commencement of the winding up of the Company (in liquidation), and without obtaining leave of the Court, as contemplated under S.536(2) of the Companies Act, the sale is void. For these reasons, Annexure III sale deed dated 19.7.2002, registered on 23.7.2002 at S.R.O., Manamadurai, is liable to be set aside, and I do so. 8. Needless to say that the setting aside of Annexure III sale deed as above, will be subject to the out come of the Company Appeal No.3/2009 filed against the order dated 6.2.2004, winding up the Company (in liquidation).