Possession under agreement to sell may be protected, but title in company property remains unchanged in winding up.

An agreement to sell does not by itself transfer title or create an interest in immovable property under Section 54 of the Transfer of Property Act, 1882, while a will operates only on the testator's death and a power of attorney is merely an authority to act. A bona fide transferee who has paid consideration and taken possession may rely on Section 53-A to protect possession against the transferor or persons claiming under him, and the agency interest principle in Section 202 may reinforce that protection. In winding up, post-commencement dispositions remain subject to Sections 536(2) and 537(1) of the Companies Act, 1956, but title continues to vest in the company unless the court directs otherwise.

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Issues: Whether the agreement to sell, will and power of attorney executed in favour of the applicant conferred any title in the property, and whether the applicant's possession and user of the property were protected against the official liquidator despite the company's winding up.

Analysis: A will takes effect only after the death of the testator and cannot operate in praesenti; an ex-managing director could not bequeath rights in company property by will. A power of attorney, even if styled irrevocable, is only an authority to act on behalf of the principal and ceases when the principal's authority ends in law. An agreement to sell immovable property does not by itself create any interest or charge in the property under Section 54 of the Transfer of Property Act, 1882, though it may create an enforceable obligation. Where the transferee has entered into the contract bona fide, paid consideration and taken possession, Section 53-A of the Transfer of Property Act, 1882 protects possession against the transferor or persons claiming under him, and the agency element is reinforced by Section 202 of the Indian Contract Act, 1872 where the agent has an interest in the subject-matter. As regards the winding up provisions, Section 536(2) of the Companies Act, 1956 makes post-commencement dispositions voidable unless the Court otherwise directs, while Section 537(1) concerns sales without leave of the Court; however, the document in question was an agreement to sell and not a completed sale, and the applicant was treated as a bona fide purchaser in possession. The property title, nevertheless, continued to vest in the company in liquidation.

Conclusion: The applicant's possession and user of the property were protected, and the official liquidator could not interfere with them, but the applicant acquired no title and the property could not be released from the liquidation estate.

Final Conclusion: The application succeeded only to the extent of protecting the applicant's possession and enjoyment of the property, while the property remained within the control of the official liquidator and the applicant was left to pursue any further remedy available in law.

Ratio Decidendi: An agreement to sell with possession does not transfer title in immovable property, but a bona fide transferee in possession may invoke Section 53-A protection against interference, while the company's title remains unaffected in winding up unless the Court orders otherwise.

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