https://www.taxtmi.com/caselaws?id=101184 Section 536(2) of the Companies Act, 1956 may be invoked in a pending winding-up proceeding even before a formal winding-up order is made, and the existence of a relief undertaking notification or an earlier interim restraint order does not by itself bar an application for validation. The company court may validate post-petition hypothecation, mortgage and rehabilitation financing if the surrounding circumstances show the transactions were bona fide, commercially necessary or expedient, and directed to preserving the company as a going concern. Transactions linked to working capital support and revival were treated as valid, while any alleged misconduct by directors or bankers was left to be examined in separate proceedings. en-us Fri, 04 Jan 1985 00:00:00 +0530 Wed, 08 Feb 2012 18:04:09 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=101184 Section 536(2) of the Companies Act, 1956 may be invoked in a pending winding-up proceeding even before a formal winding-up order is made, and the existence of a relief undertaking notification or an earlier interim restraint order does not by itself bar an application for validation. The company court may validate post-petition hypothecation, mortgage and rehabilitation financing if the surrounding circumstances show the transactions were bona fide, commercially necessary or expedient, and directed to preserving the company as a going concern. Transactions linked to working capital support and revival were treated as valid, while any alleged misconduct by directors or bankers was left to be examined in separate proceedings. Case-Laws Companies Law Fri, 04 Jan 1985 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=101184