Post-winding-up disposition of company property void absent validation; no possessory right arose from the rent note or alleged charge.

A disposition of company property made after commencement of winding-up proceedings is void unless the Court validates it, and validation will be refused where the transaction is not shown to be in good faith, for the company's benefit, or necessary to keep it going. A rent note and supplementary agreement executed during winding up were treated as suspicious and inconsistent, and the eleven-month form was found to be used to avoid compulsory registration. The applicant could not retain possession on the basis of tenancy, charge, or a later sponsorship agreement, which at most created a creditor's claim. The Official Liquidator's right to recover the premises and assets for liquidation was upheld.

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Issues: Whether the rent note and supplementary agreement executed during the pendency of winding-up proceedings were void under Section 536(2) of the Companies Act, 1956 and capable of validation by the Court, and whether the applicant could claim a right to retain possession of the premises on the basis of such transaction or an alleged charge.

Analysis: The arrangement was entered into after commencement of winding-up proceedings and with knowledge of them, so it fell within the prohibition against post-commencement dispositions. The documents and surrounding circumstances did not show that the transaction was in good faith or for the benefit of the company, or that it was necessary for keeping the company going. The Court also found the rent note and supplementary agreement suspicious and inconsistent, and held that the limited eleven-month form was used to avoid compulsory registration under the Registration Act, 1908. The applicant's later attempt to rely on a sponsorship agreement did not improve the case, because that agreement did not confer any right to possession of the premises and, at best, gave rise only to a creditor's claim.

Conclusion: The transaction could not be validated, the applicant had no enforceable right to retain possession of the premises, and the claim based on tenancy or charge failed.

Final Conclusion: The Court upheld the Official Liquidator's right to recover the company's premises and assets for liquidation, and rejected the applicant's asserted possessory rights.

Ratio Decidendi: A disposition of company property made after commencement of winding-up proceedings is void unless validated by the Court, and validation will be refused where the transaction is not shown to be in good faith or for the benefit of the company or for keeping the company going.

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