IMPORTANT POINT
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 in the face of liquidation.

JUDGMENT

1. This Interim Application has been filed on behalf of the Applicant seeking various reliefs inter alia for a declaration that the sale agreement dated 5th September, 2007 is not affected by Section 536 (2) of the Companies Act, 1956 and to ratify the said sale.

2. The background facts are that in and around 1981, the Maharashtra Industrial Development Corporation ("MIDC"), who as owner of the land being two pieces and parcels of land known as : (i) Technician Shed No.2 admeasuring 1870 sq. meters and built up shed admeasuring 786 sq. meters or thereabout and (ii) Technician Shed No. 5 admeasuring 1755 sq. meters and built up shed admeasuring 1314 sq. meters or thereabout, both situated at Ambernath Industrial Area, within the village limits of Ambernath and sub-District of Ulhasnagar, District and registration District : Thane (the "said Property"), leased the said property in favour of one Ferral Anant Machinery Manufacturers Pvt. Ltd. (the "said company) against which a winding up order has been passed and arrayed as the Respondent No.1.

3. On 25 th August 2003, one Mr.Jayantilal A. Shah, Constituted Attorney of Devyani J. Shah, Sole Proprietress of M/s Jayant Trading Corporation, the Petitioner, filed the petition for winding up against the said company.

4. It is the case of the Applicant that the said company did not inform the Applicant of the filing of the winding up petition nor of any order of admission or of winding up and the Applicant came to know of the same only in the year 2011.

5. On 4th February 2005 an ex-parte order was passed by this Court admitting the winding up petition.

6. In or around 2006-07, the Applicant learnt about the intention of the said company to transfer its leasehold rights and sell the structures standing on the said land. That, accordingly negotiations ensued between the Applicant and the said company for transfer of the said property. That, at the time of negotiations, the directors of the said company represented to the Applicant that the said property was free of all and any encumbrances and subject to the approval of MIDC and the same could be transferred to the Applicant for valuable consideration. That, at the relevant time, the said company informed the Applicant that it had only one creditor i.e. Bank of Baroda, however, its dues were being cleared by the said company. On 16 th February, 2007, the Applicant issued a public notice inviting objections to the transfer of the said property, however no objections were received. On 29th June, 2007, the Respondent No.1-company applied to MIDC for transfer of the said property in favour of the Applicant. On 4th July, 2007 and 27th July, 2007, the Bank of Baroda issued its letter confirming that the Respondent No.1-company has paid all its dues and that the bank has released all documents kept with it as security.

7. On 14th August, 2007, the MIDC granted its approval for transfer of the said property in favour of the Applicant subject to payment of differential premium of Rs. 5,40,900/-, which was paid by the Applicant.

8. That on 5th September, 2007, the Applicant and the said company entered into a sale agreement for transfer of the said property in favour of the Applicant for a consideration of Rs.1,25,00,000/- payable by the Applicant to the Respondent No.1-company. It has been submitted that the sale agreement has been duly registered before the Sub-Registrar of Assurances and the entire consideration of Rs. 1,25,00,000/- has also been paid by the Applicant to the said company.

9. That, thereafter, the Applicant has invested substantial sums of monies in the said property for installation of plant, machineries, equipment, raw material/stock-in-trade, etc, so as to use the said property for its business of manufacturing of electrical transformer tanks, other engineering and fabrication works. The Applicant employed around 100 workers whose livelihood is dependent on the Applicant. Further, that in the year 2010, the Applicant mortgag