Court rules sale of company's properties in liquidation unlawful & void. Lack of evidence & bona fide interest noted.

The Court upheld the decision of the Company Judge, ruling the sale of immovable properties of the company in liquidation to be unlawful and void. The appeal was dismissed, and the original documents were directed to be returned to MIDC. The Court emphasized the lack of evidence to validate the property transfer and the absence of a bona fide nature or interest of the company in the transaction. The Court found that the transaction did not meet the requirements of Section 536(2) of the Companies Act, 1956 and Section 53A of the Transfer of Property Act, 1882.

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Issues Involved:
1. Validity of the sale of immovable properties of the company in liquidation.
2. Possession of the property by the Official Liquidator.
3. Applicability of Section 536(2) of the Companies Act, 1956.
4. Bona fide nature and interest of the company in the transaction.
5. Applicability of Section 53A of the Transfer of Property Act, 1882.

Detailed Analysis:

1. Validity of the Sale of Immovable Properties of the Company in Liquidation:
The judgment arose from a report by the Official Liquidator seeking a declaration that the sale of the immovable properties of the company in liquidation is null and void. The learned Company Judge concluded that the Appellant had not made out a case under Section 536(2) of the Companies Act, 1956 for validating the alleged transfer of property in question in favor of the Appellant by the company in liquidation.

2. Possession of the Property by the Official Liquidator:
The Official Liquidator sought a direction permitting him to take possession of the property. The learned Company Judge allowed this request, noting that the Appellant had not provided sufficient evidence to validate the transfer of property.

3. Applicability of Section 536(2) of the Companies Act, 1956:
Section 536(2) states that any disposition of the property of the company made after the commencement of winding-up proceedings is void unless the Court orders otherwise. The Court highlighted that the winding-up of Hindustan Transmission Products Limited commenced with the presentation of the company petition on 7 April 1997. The order of winding-up was passed on 27 March 2008. The Court noted that no document was executed between the Appellant and the company transferring the leasehold rights, and the transaction was not completed before the winding-up order. Therefore, the transaction could not be validated under Section 536(2).

4. Bona Fide Nature and Interest of the Company in the Transaction:
The Appellant failed to plead and prove that the transfer was bona fide or in the interest of the company. The Court emphasized that no material was produced to demonstrate that the consideration was at the prevailing market price. The Appellant's claim of an oral agreement and the payment of Rs. 30.00 lakhs without a written document was insufficient to establish the bona fide nature of the transaction. The Court reiterated that transactions not in the ordinary course of business must be justified with proper disclosure of the underlying rationale and terms, which was not done in this case.

5. Applicability of Section 53A of the Transfer of Property Act, 1882:
The Appellant sought protection under Section 53A, which requires a written agreement from which the terms of the transaction can be ascertained. The Court noted that there was no written document in this case, and the terms of the transaction could not be ascertained with reasonable certainty. Therefore, Section 53A was not applicable.

Conclusion:
The Court upheld the decision of the learned Company Judge, concluding that the alleged disposition in favor of the Appellant was unlawful and void. The appeal was dismissed, and the registry was directed to return the original documents to MIDC.

Additional Note:
The judgment also addressed the procedural aspect of returning original documents to MIDC, as requested by the learned counsel appearing on behalf of MIDC, with no objection from the Official Liquidator.

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