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Issues: (i) Whether the alleged transfer of leasehold rights, said to have been made after presentation of the winding-up petition and before the winding-up order, could be protected under section 536(2) of the Companies Act, 1956. (ii) Whether the appellant could claim protection under section 53A of the Transfer of Property Act, 1882 in the absence of a written agreement.
Issue (i): Whether the alleged transfer of leasehold rights, said to have been made after presentation of the winding-up petition and before the winding-up order, could be protected under section 536(2) of the Companies Act, 1956.
Analysis: A disposition made after commencement of winding up is void unless the Court otherwise orders, but the discretion is meant to protect bona fide transactions completed in the ordinary course of business. Where the transaction is not completed before the winding-up order, no new or incomplete rights can be completed after the order. The appellant failed to establish any completed transfer before the winding-up order, failed to disclose the terms of the alleged oral arrangement, and failed to plead or prove that the transaction was bona fide or in the interests of the company.
Conclusion: The alleged transfer was not entitled to validation under section 536(2) and was void.
Issue (ii): Whether the appellant could claim protection under section 53A of the Transfer of Property Act, 1882 in the absence of a written agreement.
Analysis: Protection under section 53A requires a written contract from which the terms of the transaction can be ascertained. On the admitted facts, there was no written agreement and the essential terms of the alleged transaction were not evidenced in any document.
Conclusion: Section 53A was inapplicable and no protection could be granted.
Final Conclusion: The appellate challenge failed because the alleged disposition could not be validated under company law and no equitable protection was available under the law of part performance.
Ratio Decidendi: A post-commencement disposition of company property can be saved only if it is a bona fide completed transaction, shown to be in the interests of the company, and a claim under section 53A requires a written contract with ascertainable terms.
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