JUDGMENT 1. This application under section 460(4) of the Companies Act, 1956 read with Rules 9, 11(b) of the Companies (Court) Rules, 1959 has been filed by the Official Liquidator to declare that the auction sale conducted by the District Collector and Thasildar, Vaniyambadi, Vellore District as null and void in view of section 536(2) of the Companies Act, 1956. It is also prayed respondent No.3 be directed to hand over the property to the Official Liquidator, Madras and to permit the Official Liquidator to revalue the entire assets of the company in liquidation through an approved Valuer. To permit the Official Liquidator to pay the security charges due to Security Agency M/s. Swastik security service from the date of appointment to till date from the common Establishment charge account and later to recover from the sale proceeds. 2. It may be noticed here that this application is again not in the form prescribed under the Companies (Court) Rule 1959 and has been filed in the form of Judges Summons in support of which no affidavit has been filed, but report of the Official Liquidator has only been filed. 3. In the report submitted by the Official Liquidator, it is reported that M/s. Akber Leathers Ltd. Was ordered to be wound up on 20.9.2006 by this Court in C.P.No.14 of 1997. The Official Liquidator attached to this Court was appointed as Liquidator with a direction to take charge of all the assets and effects of the company in liquidation. 4. In pursuance to the order passed by this Court, the Official Liquidator deputed his officials to take possession of the assets of the company on 19.12.2006 after issuing necessary notice to all the ex-directors, secured creditors and petitioning creditors. 5. It is reported that one representative of the company Shri M.K. Mustiaque Ahmed came to the work spot and handed over the keys of the premises but did not furnish any information about the affairs of the company including the details of the assets and where abouts of the company's records. 6. It was reported by the officials deputed by the Official Liquidator that the factory premises has been sealed and winding up notice fixed on the factory premises in the presence of the representatives of the company and Vijaya Bank. The Official Liquidator appointed M/s.Swastik Security services to safeguard the assets of the company in liquidation. 7. 6. It was reported by the officials deputed by the Official Liquidator that the factory premises has been sealed and winding up notice fixed on the factory premises in the presence of the representatives of the company and Vijaya Bank. The Official Liquidator appointed M/s.Swastik Security services to safeguard the assets of the company in liquidation. 7. It is also further reported that the ex-directors of the company filed statement of affairs with the Official Liquidator on 20.9.2006. As per the statement of affairs filed by the ex-directors, the company owned immovable property measuring 19.5 acres with superstructure thereon, at M.C. Road, Solur Village, Vellore district. The ex-directors in the statement of affairs also pointed out that movable and immovable assets belonging to the company in liquidation was sold by the District Collector, Vellore District under the Revenue Recovery Act, to settle the labour dues. 8. In order to ascertain the correctness of this, a letter was issued to the District Collector, Vellore District to furnish details of the sale and amount realised along with the Copies of the order. 9. The reply to the letter of Official Liquidator was sent by the Thasildar, Vaniyambadi stating therein that the property of the Company in liquidation was sold by auction on 9.1.2003 for a total sale consideration of Rs.42,55,000/-(Rupees forty two lakhs fifty five thousand only) to Hindu Educational Society. 10. It was also pointed out that a sum of Rs.36,59,790/-(Rupees thirty six lakhs fifty nine thousand seven hundred and ninety only) was disbursed to workers and balance of Rs.5,95,210/- (Rupees five lakhs ninety five thousand two hundred and ten only) was given to Tamil Nadu Industrial Investment Corporation. 11. It is reported that Thasildar, Vaniyambadi did not provide any other information with regard to immovable property i.e. Survey No., extent of property and the details of valuation and order of confirmation by the District Collector. It is also not clear from the letter of Tahsildar, whether all the workmen were paid the amount due or only 20 workers were paid the amount. 12. The Official Liquidator thereafter conducted a meeting with the secured creditors on 22.6.2007 and as per the statement, the claim against the company are as follows: 1. Vijaya Bank Rs.1,90,77,557/- 2. Canara Bank Rs.2,37,28,130/- 3. TIIC Rs.9,45,56,000/- 4. SIPCOT Rs.68.46 lakhs (as on 31.3.2005) Rs.20.72 (IFS Loan as on 31.12.20013Rs.1.17 lakhs 13. 12. The Official Liquidator thereafter conducted a meeting with the secured creditors on 22.6.2007 and as per the statement, the claim against the company are as follows: 1. Vijaya Bank Rs.1,90,77,557/- 2. Canara Bank Rs.2,37,28,130/- 3. TIIC Rs.9,45,56,000/- 4. SIPCOT Rs.68.46 lakhs (as on 31.3.2005) Rs.20.72 (IFS Loan as on 31.12.20013Rs.1.17 lakhs 13. It is also reported that as per the statement of affairs filed by the ex-directors, the estimated value of the immovable property was Rs.2,92,50,000/- (Rupees two crore ninety two lakhs and fifty thousand only), but it was sold by the District Collector, for a sum of Rs.42,55,000/- (Rupees forty two lakhs fifty five thousand only). It is not known as to why the assets were not valued by approved Valuer. 14. It is thus reported that the sale conducted by the District Collector was void against the Liquidator, in terms of section 536(1) (2) of the Companies Act, 1956, as the auction sale of immovable property was conducted after presentation of winding up petition on 8.1.1997. 15. It is also reported that as per section 441(2) of the Companies Act, 1956, the winding up of a company by the Court be deemed to commence from the date of presentation of petition for winding up. 16. Section 536(2) of Companies Act, 1956 reads as under: "In the case of a winding up by or subject to the supervision of the Court, any disposition of the property (including auctionable claim) 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 Court otherwise orders, be void. 17. It is also the stand of the Official Liquidator in the report that the sale was conducted by the District Collector and Tahsildar on 9.1.2003 i.e. After the date of presentation of winding up petition ie. 8.1.1997. It is reported that the sale conducted by the District Collector and Tahsildar is void, having been conducted in violation of provisions of section 536(2) of the Companies Act therefore is not binding on the Liquidator. 18. Based on report, Liquidator prays for declaration to cancel the auction sale, conducted by the District Collector and Tahsildar. 19. 8.1.1997. It is reported that the sale conducted by the District Collector and Tahsildar is void, having been conducted in violation of provisions of section 536(2) of the Companies Act therefore is not binding on the Liquidator. 18. Based on report, Liquidator prays for declaration to cancel the auction sale, conducted by the District Collector and Tahsildar. 19. It was contended, that though the order of winding up was passed by this Court on 29.2.2006, but the winding up was deemed to have commenced in this Court on 8.1.1997 when the petition was filed for winding up order, on the recommendation by the B.I.F.R. 20. In support of this contention, the learned Official Liquidator, placed reliance on the judgment of the Hon'ble Supreme Court in NGEF Ltd. vs. Chandra Developers Pvt. Ltd. and another (2005)127 Comp Case 822 (SC) wherein the Hon'ble Supreme Court was pleased to lay down as under: "We may, however, observe that the opinion of the Division Bench in BPL Limited (supra) to the effect that the winding up proceeding in relation to a matter arising out of the recommendations of BIFR shall commence only on passing of an order of winding up of the company may not be correct. It may be true that no formal application is required to be filed for initiating a proceeding under Section 433 of the Companies Act as the recommendations therefor are made by BIFR or AAIFR, as the case may be, and, thus, the date on which such recommendations are made the Company Judge applies its mind to initiate a proceeding relying on or on the basis thereof, the proceeding for winding up would be deemed to have been started; but there cannot be any doubt whatsoever that having regard to the phraseology used in Section 20 of SICA that BIFR is the authority proprio vigore which continues to remain as custodian of the assets of the Company till a winding up order is passed by the High Court." 21. The application is opposed by the respondent No.3. It is the submission of the respondent No.3, that C.P.No.14 of 1997 was filed by B.I.F.R. in the year 1997 when the dispute of Workmen against the company was pending. The award in favour of workmen was passed in the year 1999. 22. The application is opposed by the respondent No.3. It is the submission of the respondent No.3, that C.P.No.14 of 1997 was filed by B.I.F.R. in the year 1997 when the dispute of Workmen against the company was pending. The award in favour of workmen was passed in the year 1999. 22. In order to enforce the award passed by the learned Labour Court, G.O.Ms.No.60, dated 31.01.2000 was issued by the Labour and Employment department, directing the District Collector, Vellore district to recover a sum of Rs.55,45,060.46 (Rupees fifty five lakhs forty five thousand and sixty and paise forty six only) from M/s. Akbar Leathers. In compliance with the direction issued by the Government under section 33(c) (1) of the Industrial Dispute Act, (hereinafter referred to as I.D. Act), the District Collector, Vellore District, vide order, dated 15.5.2000, directed the Tahsildar, Vaniyambadi to recover the amount. 23. The demand notice was fixed on 3.8.2000 and auction sale notice fixing the date of auction on 24.1.2001 was issued on 20.11.2000. On 7.1.2002, auction sale notice fixing the date of auction on 18.2.2002 was published in Gazette. 24. This was challenged by M/s. Akbar Leather Ltd. by filing W.P.No.4733 of 2002 on 15.2.2002 wherein interim stay was granted. On 25.4.2002, interim order was modified by directing M/s. Akbar Leather Ltd. to deposit a sum of Rs.1,40,000/- (Rupees one lakh forty thousand only). M/s. Akbar Leather Ltd. Failed to comply with the conditional order. 25. Therefore, on 9.1.2003, auction was held in which the respondent No.3 was declared as successful bidder. On 19.2.2003 M/s. Vijaya Bank had filed W.P.No.5044 of 2003 along with application for interim stay. 26. Vide order dated 31.3.2003, the Tahsildar rejected the claim of Canara bank and Vijaya Bank, and this order has attained finality. 27. M/s. Akbar Leather Ltd. filed another W.P.No.10026 of 2003 along with W.P.M.P.No.12723 of 2003 wherein again interim stay against auction was granted subject to deposit of Rs.10,00,000/- (Rupees ten lakhs only) with the Tahsildar. 28. This order was vacated on 20.8.2003 for non compliance of the order of deposit. 29. On 22.8.2003, interim order granted in W.P.No.4733 of 2003 was also vacated. 30. W.P.No.5044 of 2003 was also dismissed for non prosecution on 26.8.2003. 31. 28. This order was vacated on 20.8.2003 for non compliance of the order of deposit. 29. On 22.8.2003, interim order granted in W.P.No.4733 of 2003 was also vacated. 30. W.P.No.5044 of 2003 was also dismissed for non prosecution on 26.8.2003. 31. W.A.No.3644 of 2003 filed by the Workmen against the order dated 28.3.2003 in W.P.No.10026 of 2003 was dismissed, clarifying that the Workmen can enforce the order passed in the claim petition. 32. After the confirmation of sale, patta was issued to the respondent No.3 on 16.11.2004 and W.P.No.3976 of 2006 filed by Canara Bank was dismissed as infructuous on 20.1.2005. 33. On 20.9.2006 M/s. Akbar Leather Ltd. was ordered to be wound up in C.P.No.14 of 1997. 34. W.P.No.33813 of 2007 filed on 14.7.2008 for direction to the District Collector to issue sale certificate under section 38 of the Tamil Nadu Revenue Recovery Act was allowed and direction was issued to the District Collector to issue sale certificate in favour of the respondent No.3. 35. This application was filed by the Official Liquidator and it was after the filing of this application, that the sale certificate was issued in favour of the respondent No.3 on 26.8.2008. 36. W.P.No.3976 of 2003 filed by Canara Bank has been directed to be listed along with this case. 37. On the facts noticed above, it is vehemently contended by the learned counsel for the respondent No.3, that the auction sale in favour of the respondent No.3 cannot be set aside, as the respondent No.3 is a bonafide purchaser of the property, without notice of the pending proceedings in the Company Court. Furthermore, the sale was conducted by the District Collector in exercise of statutory provisions under the Revenue Recovery Act of 1956 on 9.1.2003. Whereas, the Company was ordered to be wound up on 29.3.2006, i.e. after three years and eight months of the date when the respondent No.3 was declared as successful bidder. 38. It was contended that M/s. Akbar Leather Ltd. Which is now represented by the Official Liquidator, had challenged the proceedings by the District Collector, Vellore district by filing writ petition before this Court and it was unsuccessful, therefore, the bonafide of the Collector in auctioning the property cannot be doubted. 39. 38. It was contended that M/s. Akbar Leather Ltd. Which is now represented by the Official Liquidator, had challenged the proceedings by the District Collector, Vellore district by filing writ petition before this Court and it was unsuccessful, therefore, the bonafide of the Collector in auctioning the property cannot be doubted. 39. The learned counsel for the applicant pointed out that auction sale was challenged in W.P.No.4733 of 2003 in which though interim order was granted, but on failure to comply with the conditional order, that the stay was vacated. Second attempt was again made by M/s. Akbar Leather Ltd. to challenge the auction by filing W.P.No.10026 of 2006 where it failed again. 40. The learned counsel for the respondent No.3 contended that the amount received through sale was disbursed to the workmen, as well as secured creditors, i.e. Tamil Nadu Industrial Investment Corporation therefore, the money was used for the benefit of the company. Whereas the claim of Canara Bank and Vijaya Bank, claiming charge over the property was rejected by the competent authority and the said order has attained finality. 41. It was thus, vehemently contended by the learned counsel for the respondent No.3, that the provisions of section 441, 536 of Companies (Court) Rules, 1956 will not be applicable to this case, as the sale in favour of the respondent No.3 is not a transfer by the company in liquidation to invoke section 441(2) of the Companies Act, 1956. Nor the word "void" under section 536(2) means "ab initio void". 42. In support of this contention, the learned counsel for the respondent No.3 placed reliance on the judgment of the Hon'ble Supreme Court in Pankat mehra and another vs. State of Maharashtra and others (2000)2 SCC 756 ) wherein the Hon'ble Supreme Court was pleased to lay down as under: "14. In the above backdrop alone we can consider the impact of the legislative direction in Section 536(2) that any disposition of the property of the company made after the commencement of the winding up (i.e. after the presentation of a petition for winding up) shall be void. There are two important aspects here. First is that the word "void" need not automatically indicate that any disposition should be ab initio void. The legal implication of the word "void" need not necessarily be a stage of nullity in all contingencies. There are two important aspects here. First is that the word "void" need not automatically indicate that any disposition should be ab initio void. The legal implication of the word "void" need not necessarily be a stage of nullity in all contingencies. Black's Law Dictionary gives the meaning of the word "void" as having different nuances in different connotations. One of them is of course "null, or having no legal force or binding effect". And the other is "unable in law, to support the purpose for which it was intended". After referring to the nuances between void and voidable the Lexicographer pointed out the following: "The word 'void' in its strictest sense, means that which has no force and effect, is without legal efficacy, is incapable of being enforced by law, or has no legal or binding force, but frequently the word is used and construed as having the more liberal meaning of 'voidable'. The word 'void' is used in statutes in the sense of utterly void so as to be incapable of ratification, and also in the sense of voidable and resort must be had to the rules of construction in many cases to determine in which sense the Legislature intended to use it. An act or contract neither wrong in itself nor against public policy, which has been declared void by statute for the protection or benefit of a certain party, or class of parties, is voidable only. 15. For discerning the legislative idea in employing the word "void" in the context set out in Section 536(2) of the Companies Act the second aspect to be noticed is that the provision itself shows that the word void is not employed peremptorily since court has power to order otherwise. The words "unless the court otherwise orders" are capable of diluting the rigor of the word "void" and to choose the alternative meaning attached to that word. 16. In Chittoor District Co-operative Marketing Society Ltd. v. Vegetols Ltd. and Ors. (1987 (Suppl.) SCC 167) a two Judge Bench of this Court considered a plea for validation of payments made by a company after presentation of a petition for winding up. One set of payments were made before the passing of the winding up order and the other set of payments were made thereafter. (1987 (Suppl.) SCC 167) a two Judge Bench of this Court considered a plea for validation of payments made by a company after presentation of a petition for winding up. One set of payments were made before the passing of the winding up order and the other set of payments were made thereafter. This Court declined to validate such payments on the ground that "there is no evidence to show that those payments were made either under compulsion of circumstances in order to save or protect the property of the company or that there was any commercial compulsion to enable it to run its business". The decision only indicates that such payments could have been made valid if evidence was adduced to show that there was compulsion of circumstances. In fact, this decision lends support to the interpretation that the payments which were made after the commencement of winding up proceedings, would not become ab initio void" 43. On consideration, I find that this application is devoid of any merit. Section 536(2) of the Companies Act, 1956 stipulates that any disposition of the property of the Company and any transfer of share in company or in the alteration of status of the member after the commencement of winding up shall unless the Court otherwise orders be void. 44. The Hon'ble Supreme Court in Pankat mehra and another vs. State of Maharashtra and others (supra), was pleased to lay down that a word "void" in the context of section 536(2) of the Companies Act, is not employed peremptorily, since court has power to order otherwise. This power of the court dilutes the rigor of the word "void" to choose the alternative meaning attached to that word. When the facts of this case seen in the context of the judgment of the Hon'ble Supreme Court, it can lead to only one conclusion that this transfer stood approved by this Court. 45. It cannot be disputed that the Official Liquidator steps into the shoes of management of the company after it is ordered to be wound up, therefore, will bound by the decision of this Court, passed the petition filed by the company. 46. It is proved on record that in this case M/s. Akbar Leather Ltd. challenged the sale by the District Collector not once, but twice and was unsuccessful. 46. It is proved on record that in this case M/s. Akbar Leather Ltd. challenged the sale by the District Collector not once, but twice and was unsuccessful. The decision of this Court in W.P.No.4733 of 2003 and W.P.No.10026 of 2003 is a decision upholding of the sale of the Company's property inspite of objections by the company. The Official Liquidator after taking over all the assets, cannot re-agitate the matter which has attained finality on the writ side. 47. It may be pertinent to mention here, that one order was passed by this Court after the company was in liquidation. The sale by the District Collector therefore, cannot be said to be "void ab initio". The claims of the Vijaya bank and Canara bank also stood rejected by the competent authority. 48. The Official Liquidator, in view of the earlier decision of this Court, has no locus standi to maintain this application to challenge the auction which not only stands upheld by this Court, but sale proceeds have also been utilised to discharge the dues of the company in liquidation. No merit, dismissed. No costs.