Company Court jurisdiction in winding-up can extend to later transfers and equitable relief to protect liquidation estate and bona fide purchasers.

In a winding-up proceeding, the Company Court may exercise its statutory jurisdiction under the Companies Act, read with the Companies (Court) Rules, and use inherent powers only in aid of that jurisdiction to protect the liquidation estate. Where an earlier transfer of company property is found invalid, the court may examine a later transfer connected to it and mould equitable relief. The Court balanced the liquidation estate against the interests of a bona fide purchaser by directing refund of consideration to the Official Liquidator, valuation of the flat as on the purchase date, and payment of any shortfall by the purchaser, while restraining sealing of the residential premises.

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Issues: (i) Whether the Company Court had jurisdiction under the Companies Act to examine the subsequent transfer of the flat and to grant relief in a winding-up matter by invoking its inherent powers; (ii) whether equitable relief could be moulded to protect both the company in liquidation and the bona fide purchaser of the flat.

Issue (i): Whether the Company Court had jurisdiction under the Companies Act to examine the subsequent transfer of the flat and to grant relief in a winding-up matter by invoking its inherent powers.

Analysis: The winding-up court has special jurisdiction under Section 446 of the Companies Act, 1956 to entertain matters connected with the winding-up, and that jurisdiction is to be read with Section 643 of the Companies Act, 1956 and Rule 9 of the Companies (Court) Rules, 1959. The inherent power saved by the rules and recognised under Section 151 of the Code of Civil Procedure, 1908 may be exercised where necessary for the ends of justice and to prevent abuse of process, but only in aid of a substantive jurisdiction under the Companies Act. In the facts of the case, the earlier finding that the company's transfer in favour of the intermediate transferee was bad in law provided the jurisdictional basis for the Company Court to consider the later transaction and to protect the liquidation estate.

Conclusion: The Company Court had jurisdiction to examine the later transfer and to mould relief in the winding-up proceedings.

Issue (ii): Whether equitable relief could be moulded to protect both the company in liquidation and the bona fide purchaser of the flat.

Analysis: The purchaser had paid consideration and was not a party to the earlier invalid transaction, yet the earlier transferee had no valid title to convey. To balance the competing interests, the Court directed refund of the sale consideration received by the earlier transferee to the Official Liquidator, ordered valuation of the flat as of the date of purchase, and required payment of any shortfall by the purchaser so that the company's interest remained protected while the purchaser could regularise title. The Court also directed that the Official Liquidator should not seal the residential premises of the applicant.

Conclusion: The applicant obtained protective relief, subject to payment adjustments, and the flat was not to be sealed by the Official Liquidator.

Final Conclusion: The application was disposed of by granting conditional equitable relief in favour of the applicant, while safeguarding the interests of the company in liquidation through refund and valuation-based payment directions.

Ratio Decidendi: In a winding-up proceeding, the Company Court may invoke its inherent powers in aid of its statutory jurisdiction to mould relief and protect the liquidation estate, including by balancing the rights of a bona fide purchaser against the consequences of an earlier void transfer.

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