Post-liquidation disposition of company property is void: arbitration award and decree creating a charge could not survive winding up.

An arbitration award and a decree founded on it, made after commencement of winding up, were treated as a void disposition of company property where the award required payment by the company and created a first charge on its assets. Section 227(2) of the Indian Companies Act, 1913 rendered every post-commencement disposition void unless the court ordered otherwise. Because the award was delivered after voluntary liquidation had begun and after presentation of the winding-up petition, the decree could not stand. The court also refused to sever the award to preserve only the parts said to relate to partnership assets, leaving the claimant to prove any claim in the winding up.

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Issues: Whether an arbitration award and the decree founded on it, made after the commencement of winding up, amounted to a disposition of the company's property and were void under the Companies Act.

Analysis: The award directed payment by the company of damages and compensation and also created a first charge on the company's property, which was treated as a disposition of company property. Under section 227(2) of the Indian Companies Act, 1913, every disposition of company property after commencement of winding up is void unless the court otherwise orders. As the award was delivered after voluntary liquidation had begun and after the petition for compulsory winding up had been presented, the decree based on the award could not be sustained. The court also held that the award could not be split up to preserve only those parts said to concern partnership assets, and the proper course was to require the claimant to prove any claim in the winding up.

Conclusion: The award and the decree were void against the company in liquidation, and the appeal failed.

Ratio Decidendi: A transaction or decree which, after commencement of winding up, diverts company property or creates an enforceable charge on it is void unless validated by the court, and it cannot be upheld merely because it is framed as part of a broader settlement involving partnership assets.

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