Sale of property by a company before winding up is void against the liquidator if it lacks good faith and adequate consideration, even if transactions are valid inter partes.

ORDER

The application has been filed under Section 531A of the Companies Act, 1956 , for a declaration that the alleged sale of Annexure A immovable property is void against the Official Liquidator and to set aside the sale. There is also a prayer to permit the Official Liquidator to take over possession of the said immovable property of the Company, which forms part of the assets of the company in winding up administration.

2. M/s.Parthasarathy Properties Private Limited was promoted and started by two employees of Apple A Day Properties Pvt. Ltd., namely, Sri Shanil Sadanandan and Sri Gireesakumar K., in the year 2007. In 2008, they announced 9 projects but dropped all the projects after completing the pile cap work. As part of the joint development in all the projects, sale deeds were executed in favour of the Company with respect to less than 10% of the undivided share in landed properties on which projects were envisaged, without payment of any sale consideration. As per the joint venture agreements, the landowners were offered nearly 30% of the constructed area as consideration for the land. With a portion of the amounts collected from the investors of all the projects, the Company purchased the property having an extent of 76.30 Ares (188.55 cents) in Vazhakulam Village, Aluva, as per the sale deed No.3232 of 2008 of SRO, Perumbavoor. They also announced a project named "Signet Arc" in the said property, which was the only property that belonged to the Company. The Company had collected money from several people who had booked apartments in the project "Signet Arc". The owners of the lands on which different projects were envisaged filed civil suits for reconveyance of undivided shares in their favour, and the said suits have been decreed. In several litigations filed by investors and contractors, orders have been issued attaching 76.30 Ares of property, which was owned by the Company.

3. The Company got the attachment orders lifted by making payments. After lifting the attachments, the 76.30 Ares of property was sold to the winding up petitioner as per the sale deed No.2104/2013 of SRO, Perumbavoor. The validity of the said sale has been challenged in this application. It can be seen from the Annexure A document that the sale deed was executed on 11.04.2013. Soon thereafter, the purchaser filed the winding-up petition, CP No.34 of 2013, which is well within the period of one year contemplated in Section 531A of the Companies Act. The Company was ordered to be wound up by an order dated 16.10.2014, and the official liquidator was appointed to take possession of the assets and records.

4. It can be seen from the petition that Sri Shanil Sadanandan, one of the two Ex-Directors of the Company, had filed a criminal complaint against the other Director, Sri Gireeesakumar, alleging manipulation of the board resolution, to facilitate the sale of the property in question. Sri Shanil Sadanandhan informed the Official Liquidator on 15.09.2016 about the criminal complaint filed. The Official Liquidator wrote to Sri Gireeesakumar, requesting to furnish details and to produce a copy of the sale deed, the authorisation of the Company to execute the sale deed, and the details of the sale consideration received and deposited, etc. A similar letter was sent to the winding-up petitioner seeking details and copies of the sale deed, the previous title deed, etc. It is stated in the petition that the Official Liquidator did not receive any reply. The Official Liquidator issued notice in Form No.55 to the Ex- Directors directing them to file a statement of assets, which was also not filed. It is stated that Sri Gireeesakumar had informed that all the documents have been seized by the SI of Police, Palariva