ORDER Both the company applications are filed to approve the purchase and transfer of 16,54,689 fully paid up equity shares bearing face value of Rs.10/- each of M/s.Uma Parameshwari Mills Limited (in liquidation) in the name of the applicant and to direct the official Liquidator, High Court, Madras to make necessary change in the records of the company in liquidation and enter the name of the applicant in the register of members of the company on such approval being granted by this Court for transfer of shares. 2. The facts, which are relevant for consideration herein are as follows: M/s.Uma Parameshwari Mills Limited (hereinafter shortly referred to as Company) was declared sick under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 on 18.3.2002 and as per the order of the Bench, the company was ordered to be wound up and the same was followed by change of management. Even thereafter, neither the company nor its promoter has come forward with any acceptable or viable proposal for revival of the company, which compelled the Board for Industrial and Financial Reconstruction (BIFR) to recommend for winding up the company in terms of Section 20(1) of the Act in case No.12 of 2001 dated 27.3.2003. The proceeding was forwarded to this court for further necessary action in accordance with law. This Court entertained the same and taken it on record as CP.No.207 of 2003. 3. Originally, the company petition was ordered on 1.2.2007 and the order was on 6.12.2007, reopened in view of the order passed in CA.No.2933/2007 and the company court on second occasion, on the failure of the company to prove their bonafide claim regarding revival, ordered winding up the company with other incidental directions. On the strength of such order, the official liquidator has taken charge of the assets and liabilities of the company and also obtained valuation of assets through M/s.IPCOT. In the mean while, various applications C.A.Nos.2211 to 2213 of 2008 are filed by Ex. Managing Director of the company to stay and to set aside the order of winding up and to consider and approve the scheme of revival. 4. In the mean while, various applications C.A.Nos.2211 to 2213 of 2008 are filed by Ex. Managing Director of the company to stay and to set aside the order of winding up and to consider and approve the scheme of revival. 4. Pending consideration of those applications by the company court, Indian Overseas Bank initiated recovery proceedings before DRT and obtained final order against the company and thereafter, assigned their debt due from the company in favour of Phoenix ARC and the assignee was approached by Ex.Directors of the company for settlement and full and final settlement was arrived at for Rs.7.50 crores payable by the applicant herein Dr.Kathirvel and the same was also reduced into writing and Phoenix ARC was impleaded in the place of IOB in the proceedings filed by and against IOB. During the relevant point of time, the applicant herein acquired shares of the company from existing ten shareholders amounting to nearly 47% of shares long after the winding up order and approached this court by way of present applications CA.Nos.414 and 415 of 2011 for the reliefs stated supra. 5. It is contended by the learned counsel for the applicant in the affidavit, additional affidavit, rejoinder and reply filed in these applications that the applicant has from the initial stage onwards taken various steps for revival of the company and paid substantial amount towards discharge of dues of the company and the shares of the company were purchased by him solely with the intention to initiate all possible legal and other steps for revival of the company and he purchased the shares by paying due sale consideration and by applying for the revival of the company. It is also contended that Ex-directors entered into a settlement with Phoenix ARC for discharge of amount due to the same only through the applicant and the bonafide of the applicant is thus recognised by the contesting respondent Phoenix ARC. The applicant has also come forward with payment schedule of the amount agreeable to phoenix ARC. It is further contended by the applicant that in the event of the bonafide transaction held in respect of the shares of the company being validated, the same will enable the applicant in his capacity as contributory to approach this court for appropriate order for revival of the company. It is further contended by the applicant that in the event of the bonafide transaction held in respect of the shares of the company being validated, the same will enable the applicant in his capacity as contributory to approach this court for appropriate order for revival of the company. On the other hand, if the same is invalidated and the assets of the company is allowed to be sold by phoenix ARC, it is likely to affect the revival scheme, which will inturn cause serious prejudice to the company as well as to its workers, who will be deprived of their source of livelihood. 6. Per contra, the official liquidator and the second respondent who is one of the secured creditors and decree holder, have opposed the relief sought for in the applications both factually and legally. The legal objection raised herein is that the transaction held by the applicant, after winding up order was passed, is void ab nitio and after the company is ordered to be wound up, the assets and liabilities including shares of the company shall be in the hands of the official liquidator, who is the only person competent to deal with the same and the company court under section 536(2), has no authority to consider the validation of sale of shares effected after winding up order. On facts, the bonafide nature of the transaction is also seriously questioned by the official liquidator and by the contesting objector. 7. Heard the rival submissions made on both sides. 8. The point that arises for consideration herein is as to whether this Court has jurisdiction to consider validation of sale of shares of the company effected after the company is ordered to be wound up. 9. While according to the applicant/ purchaser, there is no embargo to exercise the jurisdiction of this Court in this regard, the Liquidator of the company under liquidation, M/s.Uma Parameshwari Mills Limited and M/s.Phoenix ARC, who is one of the secure creditors, would seriously oppose the relief sought for herein. 10. 9. While according to the applicant/ purchaser, there is no embargo to exercise the jurisdiction of this Court in this regard, the Liquidator of the company under liquidation, M/s.Uma Parameshwari Mills Limited and M/s.Phoenix ARC, who is one of the secure creditors, would seriously oppose the relief sought for herein. 10. Both the learned counsel for the applicant and the learned counsel for the respondents have for and against their respective contentions, cited the following authorities of the Supreme Court, our High court and other High courts: (i) 1987 (Supp) SCC 167 ( Chittoor District Co-operative Marketing Society Ltd v. M/s.Vegetols Ltd and another) (ii) (2000) 2 SCC 756 ( Pankaj Mehra and another v. State of Maharashtra and others ) (iii) 1 9 7 6 Mh . LJ 1 5 0 (M ANU / MH /0259/1975) Division Bench of Bombay (Nagpur Bench) (S.P.Khanna, Dy. Official Liquidator, Laxmi Bank Ltd, Nagpur v. S.N.Ghosh) (iv) 1986 Vol.59 page 201 Division Bench of Gujarat High Court, (Navjivan Mills Ltd., In re), (v) 1992 (22) DRJ 354 Division Bench of Delhi High court (H.L.Seth v. Wearwell Cycle Company (India) Ltd and others and Kelvinator of India Limited v. Wearwell Cycle Company (India) Ltd and others . (vi) Delhi High Court, Guptaji Charitable Trust v. Bharat Carpets Ltd and others and Puneet Gupta v. UCC Builders Pvt Ltd and others and Shobha Somani and others v. Maharani Paints (India) Pvt. Ltd and others (vii) (2012) 171 Company cases 389, (DB) Bombay High court ( Rathnam v. Premier Automobiles Ltd and others); and (viii) (2012) 171 Comp Cas 367 (Delhi) (S.Chand and Co. v. Bharat Carpets Ltd ). 11. Before going into the reliefs sought for herein on merits in the light of the legal and factual objection raised herein, the relevant provisions of law to be looked into is Section 536 of Companies Act. For better understanding, Section 536 is extracted herein: Section 536. Avoidance of transfers, etc., after commencement of winding up- (1) In the case of a voluntary winding up, any transfer of shares in the company, not being a transfer made to or with the sanction of the liquidator and any alteration in the status of the members of the company, made after the commencement of the winding up, shall be void. (2) In the case of a winding up by (the Tribunal), any disposition of the property (including actionable claims) of the company, and any transfer of shares in the company or alteration in the status of its members, made after the commencement of the winding up, shall, unless the (Tribunal) otherwise orders, be void. As Section 536(1) deals with the case of voluntary winding up, the same is not applicable to the instant case. Under relevant provisions of law in Section 536(2), validation or otherwise of any disposition of the property including actionable claims and any transfer of shares in the company or alteration in the status of its members made after the commencement of the winding up shall depend upon the decision of the Company Court. The plain reading of this Section does not limit the exercise of jurisdiction of this court to decide voidable nature or otherwise of the transaction. The section only says that subject to company court direction, any disposition after the commencement of winding up shall be void, but while saying so, no outer limit is fixed regarding the period of disposition of property, which is required to be validated by the company court, as such, the interpretation to be drawn is any disposition of the property after the commencement of winding up shall be dealt with under Section 536(2). 11a. In this context, other relevant provisions of law to be looked into is Section 441 of the Companies Act, which provides for commencement of winding up by the Tribunal. Here again, Section 441(1) deals with voluntary winding up. Section 441(2) deals with winding up of the company by the Company court, as per which, the process of winding up is commenced at the time of the presentation of the petition for winding up. The other Section 481 of the Act says that the dissolution of the company shall be made suo motto by the Court or at the instance of the Liquidator, when the affairs of the company has been completely wound up. The other Section 481 of the Act says that the dissolution of the company shall be made suo motto by the Court or at the instance of the Liquidator, when the affairs of the company has been completely wound up. When the court is of the view that the Liquidator cannot proceed up with the winding up of a company for want of funds and assets or for any other reason whatsoever and it is just and reasonable in the circumstances of the case that an order of dissolution of the company should be made and the court shall make an order that the company be dissolved from the date of the order and the company shall be dissolved accordingly and in the event of the company being declared to be dissolved, no act remains to be done by the Liquidator and the Liquidator shall stand discharged. 12. The combined appreciation of Sections 441(2) and 481 of Companies Act would in my considered view lead to a reasonable inference that winding up process shall be deemed to be commenced at the time of presentation of the petition for winding up and shall be deemed to be concluded with the declaration of dissolution of the company. As already referred to, Section 436(2) does not provide for any outer limit for effecting any of the acts mentioned therein including transfer of shares in the company. Thus, the conjoint reading and appreciation of sections 436(2), 441(2) and 481 would only lead to an irresistible conclusion that this court is vested with jurisdiction to deal with the transfer of shares of the company effected after commencement of winding up process till the same is concluded with the declaration of dissolution of the company. 13. The Supreme Court, our High court and other High courts in the judgments above cited on both sides, had an occasion to deal with the question relating to the jurisdiction of this court to consider the validity of transactions effected during both periods (i)interregnum period between the presentation of the petition for winding up and passing of winding up order and (ii)transactions made after the winding up order is passed till completion of winding up process. 14. 14. In Pankaj Mehr a (2000) 2 SCC 756 case, the question arose for consideration before the Supreme court was whether the Company escape from penal liability under Section 138 of the Negotiable Instruments Act (for short "the NI Act") on the premise that the petition for winding up of the company has been presented and was pending during the relevant time. When the company challenged the criminal proceedings initiated against them under Section 138 of NI Act by way of batch of writ petitions, the Division Bench of Bombay High court held that the company cannot avert its liability on the mere ground that such a petition was presented prior to the company being called upon by a statutory notice to pay the amount of the cheque and dismissed the batch of writ petitions. Challenging the order of the Division Bench, batch of appeals by way of Special Leave came to be filed before the Supreme Court. It was sought to be contended before the Supreme Court that disposition of any property of the company made after the commencement of the winding up (i.e., after the presentation of the petition for winding up) shall be void, whether or not, it was succeeded by an order of winding up or appointment of a provisional liquidator. That contention was upheld by the Division Bench. The Supreme Court refused to interfere with the judgment of Bombay High court on two grounds: (i) the word 'void' need not automatically indicate that any disposition should be ab initio void and (ii) the legal implication of the word 'void' need not necessarily be a stage of nullity in all contingencies. 15. The Supreme Court has in the course of its discussion referred to in para 16 of its judgment, earlier judgment of two judges bench of Supreme Court in Chittoor District Co-operative Marketing Society Ltd v. Vegetols Ltd and others (1987 (Supp) SCC 167), wherein, the Supreme court was called upon to decide the validity of repayment made by the private limited company being one of its debtors. The repayments fell in two categories viz., (i) repayments made between the date of the presentation of the winding up petition and the date of winding up order and (ii) repayments made after the date of the winding up order during the interregnum, when the winding up order was stayed by the appeal court, which ultimately dismissed the appeal. The Supreme Court in para 3 of its judgment was inclined to confirm the order of Madras High court not on the ground of repayments fall under second category, but on the ground that the company failed to show that there was any compulsion and the payments were made either in order to save the property from being sold or that there was any commercial compulsion. By observing so, the Supreme court held that the High court has right in refusing to validate the transactions, which were not shown to be for the benefit of the company. The Supreme Court, after referring to Chittoor District Co-operative Marketing Society Ltd (1987 Supp SCC 167) case in Para 16 of its judgment, observed that "the decision in the earlier case only indicates that such payments could have been made valid if the evidence was adduced to show that there was compulsion of circumstances". The Supreme court decision in Chittoor District Co-operative Marketing Society Ltd (1987 Supp SCC 167) case would support the contention raised on the side of the applicant that the sale effected after winding up order is passed is not ab initio void and the same is subjected to the decision of this Court. 16. The Division Bench of Bombay High court (Nagpur Bench) in S.P.Kanna, Dy. Official Liquidator, Lakmi Bank Ltd case (1976 Mh.LJ 150), laid down the principles that the power under section 536(2) could be exercised by court, while proceedings of winding up were going on and dissolution had not reached. The Bombay High court in para 10 of its judgment referred to Section 441, which indicates the stage of commencement of winding up from the time of presentation of petition for winding up, observed that in the body of sub section (2) of Section 536, there is no terminus quo stated of this period and it is obvious that power under section 536(2) can be exercised by the court, while the proceedings of winding up are going on and the dissolution has not reached. 17. 17. The same view was also expressed by the Division Bench of Delhi High court in 2012 IV AD (Delhi) 381 in Guptajee Charitable Trust and batch of cases, wherein, it is observed in para 3 of its judgment that the company court has the discretion to validate transfer of shares executed after passing of the up winding up order, but the said decision is not an untrammeled one, as it has to be exercised on sound judicial principles. 18. The observation of Division Bench of Delhi High Court in yet another case H.L.Seth v. Wearwell Cycle Company (India) Ltd and others and Kelvinator of India Ltd v. Wearwell cycle co. (India) Ltd and others reported in 1992 (22) DRJ 354 would also support the contention raised on the side of the applicant that any transfer of shares effected after the winding up order shall be void till the court otherwise orders and till the dissolution of the company takes place, the company is under the supervision of the court. It is observed so by following certain amendment in the English Companies Act, 1948 in respect of section 227, which is similarly worded as Section 536(2) of our Companies Act. Section 153 of Old companies Act 1862 dealt with the disposition of the property and transfer of shares made between the commencement of winding up and the order for winding up. The section is worded in such a manner that the court is vested with power to declare void or otherwise of the transaction between interregnum. However, an amendment was brought in 1948 by introducing section 227 which is equivalent to 536(2), wherein, English legislature has deliberately omitted the terminus point, which was there in old section 153. Section 153 of the Old Act came up for consideration in the court of Appeal in re: On Ware Building Society (1891) 2 Que and Ben 463, wherein the court was called upon to decide the transfer of shares taken place, after the commencement of process of winding up and after the order of winding up was made. The judges held that it was not a fit case for giving effect to the transaction of transfer of shares by the company. It was decided so on facts and not on the ground that the court has no jurisdiction over the transfer of shares, after winding up order. The judges held that it was not a fit case for giving effect to the transaction of transfer of shares by the company. It was decided so on facts and not on the ground that the court has no jurisdiction over the transfer of shares, after winding up order. The Delhi High Court hence observed in paras 15 and 16 that even when Section 153 of the English Companies Act contained two terminals (i) date of commencement of the winding up proceedings and (ii) the date of the order, still the interpretation given in this judgment to that section 153 was that even if the transfer of shares takes place after the winding up order, the court has jurisdiction over the matter and nothing is stated to show that the transfers made, after winding up order, but before the dissolution of the company are not subject to the jurisdiction of the court. The Delhi High court has also in para 24 referred to the judgments of (i)Division Bench of Bombay High Court in S.P.Khanna v. S.N.Ghosh case (1976 Mh.LJ 150) and (ii)Gujarat High Court in Sidhpur Mills Company Ltd in (1987) 1 Com LI 71. In both the cases, the Division Bench of Bombay High Court and the learned single judge of Gujarat High court observed that ''the court can validate such impugned transactions, by way of transfer of shares after the winding up order in such bonafide cases, which demand protection of equitable consideration and the Court then directed the company to register the said transfers''. After referring to all the earlier judgments, the Delhi High court in para 25 answered the question in affirmative that the court has jurisdiction under section 536(2) to validate transfer of shares taken place after the winding up order, as the winding up process is still continuing and the company has not yet been dissolved. 19. The Division Bench of Bombay High court has in its recent judgment reported in (2012) 171 Comp Cas 389 (Bom), Rathnam P. v. Premier Automobiles Ltd and others, reiterated the view taken in the earlier judgments that ''the jurisdiction of this court under Section 536(2) of the Companies Act is extent till such time the company is dissolved''. In this case also, the Division Bench of Bombay High Court referred to the judgments of (i)Division Bench of Delhi High Court in H.L.Seth v. Wearwell cycle Co. In this case also, the Division Bench of Bombay High Court referred to the judgments of (i)Division Bench of Delhi High Court in H.L.Seth v. Wearwell cycle Co. case 1992 (22) DRJ 354 (ii) Division Bench of Bombay High court in S.P.Khanna v. Ghosh case and (iii) Gujarat High Court in Siddhpur Mills Co. Ltd., In re. case (cited supra). 20. The Delhi High Court in the judgement reported in (2012) 171 Comp Cas 367 S.Chand and Co. v. Bharat carpets Ltd. after referring to the judgments referred to above, observed in para 23 that "keeping in view the aforesaid judgments as well as the explicit language of Section 536(2) of the Act, this court has the discretion to validate transfer of shares executed, after passing of the winding up order, but the said discretion is not an untrammeled one, as it has to be exercised on sound judicial principles and while validating a share transfer agreement, the company court has to keep in view all the surrounding circumstances and if it finds that the same is a bona fide transaction for the benefit of the company, then the same should be validated. But however, before doing so the company court must be satisfied that there was clear intent on the part of the purchasers to transfer of shares in question''. 21. However, the Gujarat High court has in Navjivan Mills Ltd, In re 1986 vol.59 company cases 201, laid down a different view that ''the jurisdiction of this Court under Section 536(2) of the Companies Act, can be exercised for giving directions validating proposed transactions pending a petition for winding up, but before the winding up order is made ''. However, the reading of the entire judgment of Gujarat High Court reveals that the observation is made in different context, while answering the question whether the court has jurisdiction to give directions validating the transaction before the winding up order is made or this court can exercise such jurisdiction only after the winding up order is made. However, the reading of the entire judgment of Gujarat High Court reveals that the observation is made in different context, while answering the question whether the court has jurisdiction to give directions validating the transaction before the winding up order is made or this court can exercise such jurisdiction only after the winding up order is made. The dispute raised before the Gujarat High court is not regarding the period during which the disposition of the property is effected whether before or after winding up order is made, but relates to exercise of jurisdiction of this court in issuing directions, whether before or after winding up order is made, as such, the observation is not strictly applicable to the issue involved in the present case. 22. The learned counsel for the respondents has also relied upon the principles laid down by Bombay High Court in Rathnam P.V. Case (2012) vol 171 comp cas 389 relied upon by the applicant's side. It may be true that the Bombay High court in para 24 (ii) of the same judgment, observed that "the application under section 536(2) may be made at "any time after the transfer of shares", which transfer must have taken place after presentation of the winding up petition, but before passing of the winding up order". One of the observations so laid down by the Bombay High court is without any discussion in this regard in the foregoing paragraphs. The Bombay High court has in the foregoing paragraphs referred to the judgments of Delhi High Court in H.L.Seth v. Warewell Cycle Co (India) Ltd (1992) 46 DLT 599 and Division Bench of Bombay High court in S.P.Khanna v. S.N.Ghose (1976) Tax LR 1740 (Bom) : (1976) Mah. LJ 150), wherein, Delhi High Court and Division Bench of Bombay High Court upheld the jurisdiction of the court to make an order under section 536(2) after the commencement of the winding up proceedings by the court and to validate the transfer of shares, which had taken place after the winding up order, so long as the company has not been dissolved, that is to say, the name of the company struck off from the register of companies under the Companies Act, as such, the observation is made without duly considering the issue involved. 23. 23. That being the legal position, this court is inclined to apply the interpretation to the effect that the power under Section 536(2) can be exercised from the date of presentation of the petition till the stage of dissolution. In this case, admittedly, that stage is not yet reached. The transfer of shares, which are sought to be validated is admittedly effected after winding up order is passed, and as the winding up order is continuing till the stage of dissolution of the company, there is no legal bar for this court to proceed to decide validation of such transfer of shares. 24. On facts, transfer of shares were effected in favour of the applicant by 10 major shareholders of the company holding 16,54,689 out of 35,00,000 shares representing 47.27%. The learned counsel for the applicant/subsequent purchaser would submit that the applicant has been along with borrowers-cum-shareholders of the company negotiating for out of court settlement with Indian Overseas Bank and subsequently with second respondent/ assignee in respect of financial assistance rendered to the company in liquidation and he has been making all efforts for discharge of dues of the company and for revival of the company and one of the further steps taken on the part of the applicant is to purchase shares of the company and to approach the court for appropriate relief in his capacity as contributor. The learned counsel for the applicant, in support of such contention and in order to satisfy this court about the genuineness and bonafide nature of his transaction, relied upon the exchange of communications issued by IOB, Salem for out of court settlement between the second respondent/assignee on one hand and the shareholders and the applicant herein on other hand. 25. The learned counsel for the applicant has also drawn the attention of this Court to the negotiation, as seen from the letter dated 2.6.2010 enclosed at page 102 of typed set dated 11.7.2012 filed by the applicant, started from the beginning of the year 2010 and Bill dated 24.9.2010 enclosed at page 103 of the same typed set raised by the second respondent in the name of the applicant towards professional services, due diligence fees along with service tax, education cess and secondary education cess for banking and financial services rendered by him. The letter dated 27.9.2010 enclosed at page 104 of the same typed set issued for verification of title deeds. The assignment in favour of the second respondent was made by IOB only by document dated 30.12.2010 and the same referred to out of court settlement for Rs.7.09 crores. Again another bill dated 31.12.2010 was raised in favour of the applicant for banking and financial services rendered by him and the same was followed by letter dated 3.1.2011 by the second respondent/assignee to the guarantor and the applicant Dr.Kathirvel and the reading of contents of the same would reveal that the applicant herein took active part in negotiating with the bank and in furnishing guarantee by the guarantors and in executing the guarantee deeds and agreed to make payment in installments to the bank towards discharge of the loan amount. The letter incorporating terms and conditions was unconditionally accepted by the guarantors as well as the applicant herein and the parties have in approval of the same signed the document. Thereafter, default was committed by the parties and default notice was issued to the guarantors as well as this applicant. The letters enclosed at pages 172 to 187 of the same typed set would further show that the applicant has also made payments to other secured creditors between October 2008 and April 2012 and deposited Rs.30,00,000/- with the Official Liquidator and paid Rs.5.60 lakhs for ITCOT report. The applicant has also paid to the tune of Rs.10,89,000/- to some of the unsecured creditors as evident from the particulars enclosed at page 191 of the same typed set and also letters issued by those unsecured creditors enclosed at pages 192 to 200 of typed set. 26. Thus, the factors as discussed above, would undoubtedly disclose the bonafide on the part of the applicant in discharging the dues on behalf of the company and in taking all possible steps to revive the company and the same would inturn satisfactorily make out that purchase of shares by the applicant is with bona fide intention and transfer of shares is not sham and nominal and with any ulterior motive, but is made only for the benefit of the company. Neither the Official Liquidator nor the second respondent is able to make out any ground much less valid ground to doubt such bona fide of the applicant in involving himself in the affairs of the company. Neither the Official Liquidator nor the second respondent is able to make out any ground much less valid ground to doubt such bona fide of the applicant in involving himself in the affairs of the company. On the failure of the respondents to do so, this court finds no reason to invalidate the impugned transaction, but this Court is of the firm view that it warrants equitable consideration and statutory protection in the interest and benefit of the company. This court is hence inclined to reject both the legal and factual objections raised by the respondents against the impugned transaction and to grant the reliefs as sought for herein. 27. In the result, both the applications are ordered as prayed for.