V. Ramasubramanian, J.

1. This is an application taken out by a third party to the winding up proceedings, seeking the validation of a transaction that took place between him and the company in liquidation way back on 30.01.1997, transferring the leasehold rights that the company in liquidation had, on an immovable property. This application is filed under Section 536(2) of the Companies Act, 1956.

2. I have heard Mr. T.K. Seshadri, learned senior counsel for the applicant, Mr. M.Devaraj, learned counsel for the State Bank of India which brought the property to sale before the Debts Recovery Tribunal, Mr. Thiyageswaran, learned counsel appearing for the auction purchaser and Mr. Arvind Shukla, learned Official Liquidator.

3. The sequence of events that have led to the filing of the above application, can be summarised in the chronological order as follows:

(a) M/s. Easun Engineering Co. Ltd. was the sole and absolute owner of two pieces of land, one measuring 52507 sq.ft. (21 grounds and 2107 sq.ft.) and another measuring 6360 sq.ft. (2 grounds and 1560 sq.ft.), both bearing Municipal Door No. Old No.35/5 and New No.476, Anna Salai, Nandanam, Chennai 600 035;

(b) Out of the aforesaid land of the total extent of 58867 sq.ft. (24 grounds and 1267 sq.ft.), the original owner M/s. Easun Engineering Co. Ltd. granted a lease in respect of small extents, out of one portion measuring about 9 grounds in favour of different lessees, with a view to enable all of them to jointly put up a multistoried complex, known as Temple Towers/Meenakshi Plaza;

(c) By a registered lease dated 30.3.1990 (registered as Document No.3256 of 1990 in the office of the District Registrar of Madras South), M/s. Easun Engineering Co. Ltd. granted a lease of an extent of 354 sq.ft. of land, out of the greater extent of 9 grounds, forming part of the whole extent, to and in favour of Sethuraman Thiayagarajan Engineers Pvt. Ltd., for a term of 999 years;

(d) In pursuance of the lease so obtained on 30.3.1990, in respect of the land of the extent of 354 sq.ft. for a period of 999 years, the lessee, namely, Sethuraman Thiayagarajan Engineers Pvt. Ltd. entered into a Builder's Agreement on 9.4.1990 with a builder by name M/s.R.K. Investments, for putting up an office premises in the 5th floor of the proposed multistoried complex, measuring a built up area of 1279 sq.ft.;

(e) On 16.8.1993, a petition for winding up M/s. Sethuraman Thiayagarajan Engineers Pvt. Ltd. was filed on the file of this Court;

(f) When the company petition for winding up was pending, the State Bank of India, which is the third respondent herein, filed a suit on the file of this Court in C.S.No.2117 of 1995, against Sethuraman Thiayagarajan Engineers Pvt. Ltd. as well as its Directors and guarantors, praying for a decree for recovery of a sum of Rs.1,96,44,468.77. The State Bank of India claimed in the suit that on 30.01.1991, the company (borrower) created an equitable mortgage by deposit of title deeds relating to the leasehold property. The leasehold property was described as item No.1 in Schedule 'A' to the plaint in the suit C.S.No.2117 of 1995, as follows:

“Flat situate at Temple Towers of M/s. R.K. Investments, Old Door No.35/3, New No.476, Anna Salai, Nandanam, Madras 600 035, bounded on the North by land belonging to lessor, South by leasehold land belonging to K.Prakash, East by land belonging to lessor and West by leasehold land belonging to K.A. Chakravarthy measuring about 2467 sq.ft. in the premises and 354 sq.ft. of building site;

(g) By a deed of transfer of lease dated 30.01.1997, registered as Document No.1798 of 1997 in the office of the District Registrar of Madras South (actually presented for registration on 17.4.1997 and not on 30.01.1997), Sethuraman Thiayagarajan Engineers Pvt. Ltd., hereinafter referred to as the company in liquidation, transferred their leasehold rights in the land of the extent of 354 sq.ft., created by the lease deed dated 30.3.1990, in favo