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Issues: (i) Whether an order of resumption and forfeiture passed by the Estate Officer under the Punjab Regional and Town Planning and Development Act, 1995 in respect of property of a company in liquidation could be sustained without leave of the company court under section 446 of the Companies Act, 1956. (ii) Whether the auction purchaser was entitled to execution of the conveyance deed on the basis of the company court's sale order notwithstanding the resumption order.
Issue (i): Whether an order of resumption and forfeiture passed by the Estate Officer under the Punjab Regional and Town Planning and Development Act, 1995 in respect of property of a company in liquidation could be sustained without leave of the company court under section 446 of the Companies Act, 1956.
Analysis: Section 446 of the Companies Act, 1956 places an embargo on commencement or continuance of proceedings against a company in liquidation except with leave of the company court, and also confers exclusive jurisdiction on that court in matters connected with winding up. The Court held that the resumption proceedings directly affected property of the company in liquidation and could not be initiated, continued, or implemented without such leave. The availability of an appellate or revisional remedy under the State enactment did not cure the jurisdictional defect. The Court further held that there was no real conflict warranting displacement of the central legislation, and in any event the Central Act would prevail in case of conflict.
Conclusion: The resumption order was void ab initio and non est in law for want of leave of the company court.
Issue (ii): Whether the auction purchaser was entitled to execution of the conveyance deed on the basis of the company court's sale order notwithstanding the resumption order.
Analysis: Once the order of resumption was held to be invalid and incapable of legal implementation, nothing remained to defeat the sale approved by the company court. The Official Liquidator's position that the property had been wrongly described as leasehold also supported conveyance of the property in the form in which it was sold and confirmed by the company court.
Conclusion: The applicant was entitled to execution of the conveyance deed conveying freehold and unencumbered rights.
Final Conclusion: The application succeeded, the impugned resumption order was treated as without legal effect, and consequential relief was granted in favour of the auction purchaser.
Ratio Decidendi: Proceedings affecting property of a company in liquidation cannot be commenced, continued, or implemented by another authority without leave of the company court under section 446 of the Companies Act, 1956, and any order passed in breach of that mandate is void and unenforceable.
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