https://www.taxtmi.com/caselaws?id=97258 A post-commencement charge on company property is void unless the court validates it under section 227(2) on proof that the transaction was bona fide and made in the ordinary course of business, or was necessary to preserve the company as a going concern. The Madras High Court noted that the company had already moved towards winding up, the advances were made after appointment of the provisional liquidator, and the evidence did not show genuine trading necessity or salvage purpose. The bank's bona fides alone did not justify displacing pari passu distribution, so the charge was not validated. en-us Thu, 08 Oct 1953 00:00:00 +0530 Mon, 16 Jan 2012 11:10:09 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=97258 A post-commencement charge on company property is void unless the court validates it under section 227(2) on proof that the transaction was bona fide and made in the ordinary course of business, or was necessary to preserve the company as a going concern. The Madras High Court noted that the company had already moved towards winding up, the advances were made after appointment of the provisional liquidator, and the evidence did not show genuine trading necessity or salvage purpose. The bank's bona fides alone did not justify displacing pari passu distribution, so the charge was not validated. Case-Laws Companies Law Thu, 08 Oct 1953 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=97258