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Issues: (i) Whether the alleged transfer of the company's leasehold property after commencement of winding up could be validated under section 536(2) of the Companies Act, 1956. (ii) Whether the occupant could rely on section 53A of the Transfer of Property Act, 1882 in the absence of a written agreement containing ascertainable terms.
Issue (i): Whether the alleged transfer of the company's leasehold property after commencement of winding up could be validated under section 536(2) of the Companies Act, 1956.
Analysis: The alleged sale was unsupported by any executed agreement or registered conveyance, and the surrounding documents did not establish that the transaction had been finalized before the winding up order. A disposition after commencement of winding up is void unless the Court otherwise orders, but judicial discretion to validate such a transaction is exercised only where the transfer is completed and the surrounding circumstances justify protection of the transaction. The materials did not show a completed transfer, and the occupant also failed to plead or prove that the transaction was in the interest of the company or its creditors. Mere assertion of bona fides or payment of money was insufficient.
Conclusion: The alleged transfer was not liable to be validated under section 536(2) of the Companies Act, 1956, and the claim was rejected.
Issue (ii): Whether the occupant could rely on section 53A of the Transfer of Property Act, 1882 in the absence of a written agreement containing ascertainable terms.
Analysis: Section 53A applies only where there is a written contract signed by the transferor or on its behalf, from which the terms of the transfer can be ascertained with reasonable certainty, and possession is delivered in pursuance of that contract. No such written agreement existed here, and the alleged correspondence did not constitute a contract in writing for the purposes of the doctrine of part performance. The basis on which possession was allegedly given was also unproved.
Conclusion: Section 53A of the Transfer of Property Act, 1882 was inapplicable, and no protection could be claimed under it.
Final Conclusion: The Court declined to protect the alleged transfer and directed the Official Liquidator to take physical possession of the property for the benefit of the company's creditors and workers.
Ratio Decidendi: A post-commencement disposition of company property will not be validated unless the transfer is completed and shown to be for the benefit of the company, and the doctrine of part performance cannot be invoked without a written contract embodying ascertainable terms.
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