Void post-winding-up disposition and liquidator's right to recover possession where no court validation was obtained.

A disposition of company property made after commencement of winding up is void under section 536(2) unless the court validates it, so the official liquidator was entitled to recover possession. The plea of limitation under Article 59 of the Limitation Act failed because the challenge was to a void statutory disposition, not cancellation of a valid instrument, and acceptance of rent did not cure the defect or create estoppel. Validation was refused because no material showed that the transaction served the company in liquidation or its creditors; mere payment of rent or renovation expenses was insufficient.

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Issues: (i) Whether the transaction entered into after the filing of the winding-up petition was void and the official liquidator was entitled to recover possession. (ii) Whether the application was barred by limitation or the liquidator was estopped by acceptance of rent. (iii) Whether the transaction should be validated on the ground that it was bona fide and in the interest of the company in liquidation or its creditors.

Issue (i): Whether the transaction entered into after the filing of the winding-up petition was void and the official liquidator was entitled to recover possession.

Analysis: The agreement was executed after the commencement of winding up proceedings. By force of section 536(2) of the Companies Act, any disposition of company property after commencement of winding up is void unless the court otherwise orders. No prior validation had been obtained, and the liquidator was therefore entitled to seek restoration of the premises.

Conclusion: The transaction was void, and the official liquidator was entitled to recover possession.

Issue (ii): Whether the application was barred by limitation or the liquidator was estopped by acceptance of rent.

Analysis: Article 59 of the Limitation Act applies to proceedings for cancellation or setting aside of an instrument, but the challenge here was not to avoid a valid transaction by cancellation; the statute itself rendered the disposition void. Acceptance of rent could not validate a transaction that was void in law, particularly where validation could arise only by court order.

Conclusion: The plea of limitation and the plea of estoppel failed against the liquidator.

Issue (iii): Whether the transaction should be validated on the ground that it was bona fide and in the interest of the company in liquidation or its creditors.

Analysis: The relevant test was not the alleged bona fides of the tenant, but whether the transaction furthered the company's business or the interests of the company in liquidation and its creditors. On the material before the court, no such benefit was shown. Mere expenditure on repairs, renovation, or payment of rent did not establish that the arrangement ought to be sustained.

Conclusion: The transaction was not fit for validation and the request to sustain it was rejected.

Final Conclusion: The liquidator succeeded in obtaining a declaration that the post-petition transaction could not stand, and the premises were directed to be restored to the liquidator after a short time for vacation.

Ratio Decidendi: A disposition of company property made after commencement of winding up is void under section 536(2) unless the court validates it, and neither limitation for cancellation nor acceptance of rent can preserve such a transaction absent proof that it serves the company in liquidation or its creditors.

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