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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
JAYANT BANERJI, K.V.ARAVIND
Rajendra Kumar C., Morzaria, S/o C. G. Morzaria – Appellant
Versus
Kirit Morzaria S/o C. G. Morzaria – Respondent
| Table of Content |
|---|
| 1. overview of application and winding-up background. (Para 2 , 3 , 4 , 5 , 6) |
| 2. contentions regarding validity of the scheme and transfers. (Para 7 , 8 , 11 , 13 , 14 , 15) |
| 3. court's evaluation of shareholding and procedural compliance. (Para 10 , 12 , 18 , 19 , 20) |
| 4. reinforcement of legal standards for revival scheme approval. (Para 16 , 21 , 22 , 23 , 24 , 25) |
| 5. final ruling on appeal and dismissal of the company application. (Para 26) |
JUDGMENT :
(PER: HON'BLE MR. JUSTICE JAYANT BANERJI)
Heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondent Nos.1 and 2.
2. The instant appeal has been filed seeking to set aside an order dated 01.09.2025 passed by a learned judge of this Court in Company Application No.70/2025 in Company Petition No.131/1988.
3. The company application was filed by the respondent No.1 under the provisions of Section 466 read with Sections 391 to 394 of the Companies Act, 1956, Act read with Rules 6 and 9 of the Companies (Court) Rules, 1959, Rules with a prayer to sanction the scheme of arrangement and to recall the winding- up order dated 30.11.1990. The respondent No.2 is the company (in-liquidatio
Court emphasized that revival schemes for companies in liquidation must adhere to statutory compliance, as any unauthorized share transfer renders the scheme void.
Section 536(2) of the Companies Act, 1956 allows the court to validate bona fide transactions made after the commencement of winding up, emphasizing the importance of protecting legitimate interests ....
The court emphasized that discretion under Section 466 of the Companies Act must consider public interest and prior judicial findings, not merely creditor consent.
The sale of property during winding up proceedings is void if executed without court sanction and with fraudulent intent to evade creditors' claims.
Under Section 536(2), post-petition dispositions voidable; court validates bona fide property transfers benefiting creditors via fair value payments where buyer ignorant via due diligence, despite di....
Share transfers made after the commencement of winding up are void unless sanctioned by the court, and must be justified as beneficial to the company.
The court has the discretion to recall winding-up orders under the Companies Act if the applicant satisfies creditor debts and presents a bona fide revival scheme, emphasizing the importance of compl....
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