Transactions executed after the commencement of winding-up proceedings are void under Section 536(2) of the Companies Act unless validated by the court, reinforcing the need for evidence that such transactions were in the company's interest.

JUDGMENT :

ARIF S. DOCTOR, J.

1. Since the issue that arises for consideration in the Official Liquidator’s Report (“OLR”) and the Interim Application are essentially two sides of the same coin, both the captioned proceedings were, with the consent of the Learned Counsel, heard together and are being disposed of by this common order.

2. The issue for consideration in both captioned proceedings is the validity of a Deed of Assignment dated 16th May 2019 (“the Deed of Assignment”), which assigned to the Applicants, a plot of land identified as - Lot No. 45, Old Survey No. 113 (Part), New Survey No. 165, measuring approximately 1,497 square metres, located in Tarapur Industrial Area, Boisar, Palghar (“the said land”), along with a building on it (“the said building”). The said land and building are collectively referred to as “the said property”. It is not in dispute that the said property belonged to a company known as Navinon Limited (“Navinon”).

3. The OLR seeks cancellation of the Deed of Assignment, while the Interim Application seeks its ratification.

4. However, before adverting to the rival contentions, it is necessary for context to set out the following facts:

i. On 3rd November 2001, Company Petition No. 1176 of 2001 was presented in this Court for the winding up of Navinon under the provisions of Sections 433 and 434 of the Companies Act, 1956 (“Companies Act”).

ii. It is the Applicants’ case that on 14th February 2005, one Manohar Narhar Shanke (“Manohar Shanke”) and Ravindra Kamlakar Palkar (“Ravindra Palkar”) were authorised by a board resolution of Navinon to deal with two properties belonging to Navinon, one of which was the said property. This board resolution was signed on behalf of Navinon by Atulya Mafatlal, the then Vice Chairman of Navinon.

iii. On 17th February 2005 a joint power of attorney was executed by Atulya Mafatlal in favour of Manohar Sankhe and Ravindra Palkar in terms of the board resolution dated 14th February 2005. It is not in dispute that this power of attorney was unregistered.

iv. On 16th December 2005, this Court passed an order of winding up against Navinon, by which the Official Liquidator High Court Bombay was appointed to take charge of the assets and affairs of Navinon.

v. It is the case of the Applicants that sometime in the year 2017 the Applicants were approached by Atulya Mafatlal, who represented himself to be a director of Navinon, along with Manohar Sankhe, who claimed to be the leader of the workman’s union, with a proposal to transfer the said property in favour of the Applicants by way of a Deed of Assignment.

vi. It is the case of the Applicants that since Manohar Sankhe was unable to continue to act as the Constituted Attorney on behalf of Navinon on account of personal reasons, he delegated his powers to Ravindra Palkar vide a Power of Attorney dated 26th September 2017. This Power of Attorney was registered.

vii. On 16th November 2017, the Applicants issued a public notice in a newspaper called "Aapla Vartahar" which the Applicants claim had wide circulation in the area in which the said property is located. It is the Applicants’ case that they did not receive any response to the public no