Post presentation dispositions under Section 536(2) are void, so sales executed after a winding up petition were held invalid.

Dispositions made after commencement of a winding up petition are void under the statutory standard applicable to winding up; that standard is stricter than the nearer period transaction rule. On the stated facts the petition preceded the irrevocable power of attorney and subsequent sale deeds, and there is no evidence of an agreement predating presentation to cause relation back. No lawful basis or equitable reason was shown to prefer the applicants over other creditors. Consequently the post presentation transactions are treated as void and the applications to recall the sale were not sustained.

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Issues: Whether transactions of the company executed after presentation of the winding up petition (in August 1999) can be saved or must be declared void under Section 536(2) of the Companies Act and whether the order permitting sale should be recalled.

Analysis: Section 536(2) renders dispositions made after the commencement of winding up void unless the Court otherwise orders; this statutory standard is stricter than Section 531A which applies to transactions within one year prior to presentation. The admitted chronology shows the winding up petition was presented on 26-7-1999, the irrevocable power of attorney was dated 28-7-1999 and sale deeds were executed in August 1999. There is no clear evidence of a concluded agreement predating presentation that would cause the sales to relate back to an earlier date. No lawful or compelling reason was shown to justify preferring the applicants over other creditors, and the applicants did not press for oral evidence or demonstrate why equity required saving the transactions. The applicants also remained silent at the time of the first paper publication and only objected after subsequent publication.

Conclusion: The transactions executed after presentation of the winding up petition are void under Section 536(2) of the Companies Act; the applications to recall the sale order are not sustained and the appeals are dismissed.

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