The impugned transaction is not vitiated under section 531 of the Act. The impugned transaction is not vitiated under section 531-A of the Act. The impugned transaction is not affected by the provisions contained in section 536(2) of the Act.

D.R. DHANUKA, J.:---The Principal question which arises for consideration of the Court in these proceedings is as to whether the impugned transaction dated 18th February 1987 entered into by and between M/s. Kishco Mills Pvt. Ltd. (hereinafter referred to as `the company') and M/s. Monark Enterprises relating to transfer of leasehold rights in Plot No. 10, Government Industrial Estate, Kandivli, Bombay, and the structures thereon is liable to be treated as void ab initio or is liable to be annulled by the Company Court under one or the other provisions of the Companies Act I of 1956 (hereinafter referred to as `the Act').

2. On 12th August, 1987, Shri Kisan Tulpule, Shri Ramakrishna Venkat, Shri Satyanarayan Ramourat Tripathi and Shri Ramtirath Sukhanarayan Kahar, in their capacity as representatives of Mill Mazdoor Sabha, an approved and recognised Union for textile processing industry, representing the workmen of the company, filed a winding up petition in this Court, being Company Petition No. 756 of 1987. The petitioners sought winding up order against the said company on the ground of non-compliance with the notice of demand of Rs.70.74,282.59, being notice of demand dated 13th July, 1987. The said petition was declared on 5th August, 1987 and was filed on 12th August, 1987. It was inter alia averred in the petition that the company had resorted to illegal lock-out in July 1986. The company employed about 423 workmen at the material time.

3. On 9th June, 1988, this Court passed an order for winding up of the company. The winding up order relates back to the date of presentation of the petition i.e., 12th August, 1987. By the said order, the Official Liquidator, High Court, Bombay, was directed to perform all the functions of Liquidator of the said company as contemplated under the Act.

4. At one stage, the company held two plots i.e., Plot No. 7-A and Plot No.10, situate at Government Industrial Estate, Kandivli, Bombay, on lease granted by the Additional Collector of Bombay for and on behalf of the Governor of the State. Prior to the commencement of the winding up proceedings, the company had already mortgaged its right, title and interest in Plot No. 7-A and hypothecated its plant , machinery and other moveables to the Central Bank of India in lieu of loan and other credit facilities availed of by the company from the said Bank. The said secured creditors have filed Suit No. 2200 of 1986 in this Court against the company and the guarantors for recovery of a sum of Rs. 3,97,34,819.90, further interest and for other reliefs. By an order dated 4th September, 1986 passed by this Court, the Court Receiver, High Court, Bombay was appointed Receiver of the said Plot No. 7-A and the structures thereon and also of the machinery and movables hypothected to the Bank. On 12th September, 1986, the Court Receiver took possession of the said properties. Pursuant to a subsequent order dated 20th November 1986, the Court Receiver disposed of the moveables of which the Receiver had taken charge, realising a sum of Rs. 13,50,000/-. In pursuance of the orders passed by this Court , a sum of Rs. 12,91,000/- has already been released to the Central Bank of India after setting aside the balance of the amount towards the costs, charges expenses and commission of the Court Receiver. Perhaps the workmen are entitled to pari passu charge over the said sale proceeds and other securities held by the Central Bank of India.

5. Prior to the commencement of the winding up proceedings i.e., on 18th February, 1987, the company had entered into the impugned transaction to transfer its right, title and interest in Plot No. 10 and the structures standing thereon to M/s. Monark Enterprises, a partnership firm,

for consideration of Rs. 32,74,294/-. The said transaction was in nature of a firm commitment and concluded contract subject to various sanctions and approvals. On the same day, the company handed over possession of the said property to M/s Monar