https://www.taxtmi.com/caselaws?id=299265 Post-commencement dispositions of a company's property in winding up are void unless the court validates them. Validation is confined to bona fide transactions entered into and completed in the ordinary course of current business, or transactions necessary to preserve the company as a going concern. The controlling consideration is protection of pari passu distribution among creditors and avoidance of improper preference. On the facts, the borrowings were not shown to be ordinary trading transactions or genuine salvage measures, and the company was no longer effectively able to continue business. The application for validation under Section 227(2) therefore failed. en-us Thu, 08 Oct 1953 00:00:00 +0530 Wed, 08 Dec 2021 15:41:20 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=299265 Post-commencement dispositions of a company's property in winding up are void unless the court validates them. Validation is confined to bona fide transactions entered into and completed in the ordinary course of current business, or transactions necessary to preserve the company as a going concern. The controlling consideration is protection of pari passu distribution among creditors and avoidance of improper preference. On the facts, the borrowings were not shown to be ordinary trading transactions or genuine salvage measures, and the company was no longer effectively able to continue business. The application for validation under Section 227(2) therefore failed. Case-Laws Companies Law Thu, 08 Oct 1953 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=299265