JUDGMENT :

(Prayer in COMP.A.NO.150 of 2019: This Application is filed under Section 460(4), 536 & 537 of the Companies Act, 1956 r/w the Rules 9 and 11(b) of the Companies (Court) Rules, 1959 to take this report on record; To cancel the sale transactions of the landed properties of the company in liquidation during winding up proceedings as stated in para 8 of the report and declare the sale is void in terms of Section 536 and 537 of the Companies Act; To direct the Respondents 6 and 7 herein to cancel the sale transaction of the above said landed properties of the company in liquidation during the winding up proceedings as stated in para 8 of this report and to direct that the cost of this application do come out of the funds of the company in liquidation.

COMP.A.NO.395 of 2019: This Application is filed under Order XIV Rule 8 of the original side rules r/w Rules 9 and 11(b) of the Companies (Court) Rules, 1959 to validate the sale deeds registered with respective Sub Registrars as mentioned in the schedule of property.)

1. C.A.No.150 of 2019 was filed by the Official Liquidator to cancel specific sale transactions pertaining to the immovable properties of the company in liquidation (the Company) in terms of Sections 536 and 537 of the Companies Act, 1956 (CA 1956). An ex-director of the Company filed C.A.No.395 of 2019 seeking validation of the above mentioned sale transactions (the Dispositions) in terms of Section 536(2) of CA 1956.

2. About 65 hectares of land were granted to the Company by the Government of Tamil Nadu in order to carry out limestone mining. Pursuant to a request from the company on 17.08.1995, the Government of Tamil Nadu issued G.O.Ms.No.197, Industries (MMDI) Department, dated 07.10.1996, by which permission was granted to the Company to dispose of the unsuitable limestone mines from the Pudhupatti Mines. Pursuant thereto, it appears that a meeting of the then Board of Directors of the Company took place on 10.06.1997. At such meeting, it was resolved to initiate action for the sale of the idle dry land of the Company of an extent of about 66.15 hectares. The Board authorised Mr. S. Nazirudin, Managing Director, to enter into agreements in relation to the sale of the property. Within about eight days, on 18.06.1997, an agreement of sale appears to have been entered into purportedly on behalf of the Company through one S. Khaja Mohideen acting as a power of attorney of the Company. Such agreement of sale is in favour of one K. Abdul Hameed and one Smt. Ayeshabee. The subject matter of such agreement of sale is the sale of unusable mining land to an extent of 65 hectares at Tuticorin District. The sale consideration specified therein is a sum of Rs.1,32,00,000/-. The said agreement records the receipt of an aggregate sum of Rs.6 lakhs at the time of execution of such agreement of sale. Within about 44 days thereafter, on 30.07.1997, the Board of Directors of the Company made a reference to the Board for Industrial and Financial Reconstruction (BIFR) under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (the SICA). The enclosed Form -A refers to a decision of the Board of Directors on 21.02.1997 to sell the land. The realizable value is indicated therein as Rs.50 lakhs.

3. Meanwhile, the BIFR proceedings continued. Although an operating agency was appointed by the BIFR, it appears that all efforts to rehabilitate the sick industrial company failed. Consequently, by order dated 04.07.2002, the BIFR recommended that the Company be wound up. Pursuant thereto, by order dated 06.03.2006, the Company was ordered to be wound up and the Official Liquidator took charge of the assets and affairs thereof.

4. More than three years subsequent to the date of winding up order, by 7 sale deeds executed between April 2009 and August 2010, the above mentioned 65 hectares of land was conveyed purportedly pursuant to the agreement of sale dated 18.06.1997. Since the sale deeds were executed subsequen