Absolute bar on transfer of assigned land defeats liquidation sale; void auction cannot be validated by delay or conditions.

Assigned land protected by the Andhra Pradesh Assigned Lands (Prohibition of Transfer) Act, 1977 could not be sold through company liquidation because the statutory bar on transfer was treated as absolute and prevailing over the Companies Act process. Silence or delay by the State did not validate the prohibited alienation, and a condition to deposit money with the State could not cure the illegality. The auction and sale of the assigned land were therefore invalid and void ab initio, while liquidation could proceed only in respect of any other assets not covered by the statutory prohibition.

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Issues: Whether land found to be assigned land could be sold in company liquidation under the Companies Act, and whether the auction and sale of such land were valid.

Analysis: The land in question was treated as assigned land under the Andhra Pradesh Assigned Lands (Prohibition of Transfer) Act, 1977. The statutory prohibition on transfer was held to be absolute, and the protective character of the enactment was treated as prevailing over the company liquidation process. The Court held that silence or delay on the part of the State did not validate an otherwise prohibited transfer, and that a condition requiring deposit of money with the State could not cure the legal bar against alienation. The attempt to sell the assigned land through the official liquidator was therefore treated as inconsistent with the statutory prohibition.

Conclusion: The auction and sale of the assigned land were invalid and void ab initio, and the order permitting sale under the Companies Act was set aside to that extent.

Final Conclusion: The liquidation proceedings could continue only in respect of other assets, if any, but not in respect of the assigned land covered by the statutory bar.

Ratio Decidendi: A transfer or sale of assigned land in contravention of the Andhra Pradesh Assigned Lands (Prohibition of Transfer) Act, 1977 is void, and such statutory prohibition is not overridden by liquidation proceedings under company law.

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