Court Confirms Sale Agreement Valid Post-Winding Up Petition, Clarifies "Void" as Voidable Under Companies Act 1956.

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....The High Court addressed the issue of whether a sale agreement made after the commencement of a company's winding up is affected by Section 536(2) of the Companies Act, 1956. The court held that the winding up commences at the presentation of the petition and any disposition of company property after that is void unless the court orders otherwise. The court emphasized that the jurisdiction is equitable and should prevent unjust enrichment by the company. Referring to a Supreme Court case, the court noted that the term "void" in Section 536(2) does not always imply complete nullity, but rather voidable. The Applicant had conducted due diligence, paid consideration, settled dues, and obtained necessary permissions, making the transaction bonafide, fair, and just. Therefore, the court ratified the sale agreement, protecting the transaction.....