Secured transfer of company property upheld; Official Liquidator's seal could not survive after valid sale was recognised.

A transfer of mortgaged company property was sustained where it was made with the secured creditor's participation, followed correspondence between the parties, and was not shown by reliable material to be collusive, grossly undervalued, or intended to siphon sale proceeds; the avoidance provisions of the Companies Act, 1956 were therefore not attracted. Once the sale was upheld, the Official Liquidator had no basis to continue sealing the property, and the purchaser was entitled to de-sealing and restoration of possession.

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Issues: (i) Whether the sale deed dated 30.01.2013 and the transfer of the mortgaged property were liable to be invalidated as void or fraudulent under the Companies Act, 1956. (ii) Whether the Official Liquidator was justified in sealing the property and whether the property was liable to be de-sealed and restored to the purchaser.

Issue (i): Whether the sale deed dated 30.01.2013 and the transfer of the mortgaged property were liable to be invalidated as void or fraudulent under the Companies Act, 1956.

Analysis: The transfer was examined in the context of Section 531A, Section 536 and Section 537 of the Companies Act, 1956, together with the secured creditor's enforcement powers under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Rule 8 of the Security Interest (Enforcement) Rules, 2002. The sale was preceded by correspondence between the company and the secured creditor, was effected with the secured creditor's involvement, and was not shown by reliable material to be a collusive or grossly undervalued transaction. The record did not establish siphoning of sale proceeds or lack of bona fides sufficient to attract avoidance of the transfer.

Conclusion: The sale deed was not liable to be set aside and the challenge by the Official Liquidator failed.

Issue (ii): Whether the Official Liquidator was justified in sealing the property and whether the property was liable to be de-sealed and restored to the purchaser.

Analysis: Once the sale was held to be valid, the basis for continued sealing by the Official Liquidator did not survive. The purchaser's possession flowed from a recognised transfer made in the course of settlement with the secured creditor, and no material justified retention of the seal by the Official Liquidator.

Conclusion: The property was liable to be de-sealed and restored to the purchaser.

Final Conclusion: The challenge to the sale was rejected, while the purchaser obtained consequential relief of de-sealing and restoration of possession. The connected applications were otherwise disposed of in terms of these findings.

Ratio Decidendi: A transfer of a company's secured property effected with the secured creditor's participation and for value, not shown to be collusive or prejudicial to the estate, may be sustained notwithstanding winding-up proceedings, and a post-transfer seal by the Official Liquidator cannot be retained once the transfer is upheld.

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