2012 (8) TMI 322 - HC - Companies Law

Winding up - appellant claims to have entered into an agreement with the Company in liquidation for purchase of land Held that - Agreement to sell relied on by the appellant was of a date after the filing of the winding up petition and was thus unenforceable under Sections 531 & 531A of the Act - the ignorance, even if any of the appellant, of the pendency of the winding up petition was of no avail and would not validate the transaction in question - appellant, in the absence of any valid agreement can neither seek a direction to the Official Liquidator nor will any purpose be served in granting permission to the appellant to sue the Company in liquidation appeal dismissed

Summary

Issues:
- Appeal under Section 483 of the Companies Act, 1956 against the order dismissing winding-up application.
- Validity of the agreement for the purchase of land from the Company in liquidation.
- Requirement of registration of agreement to sell as per State law.
- Admissibility of unregistered agreement as evidence in court.
- Legal implications of seeking specific performance without a valid agreement.
- Interpretation of Section 446 of the Companies Act regarding saving the Company in liquidation from unnecessary litigation.
- Consideration of public policy and legal principles in granting permission for specific performance post liquidation order.

Analysis:
1. The appeal challenged the dismissal of the winding-up application against M/s Koshika Telecom Ltd. based on the appellant's claim of entering into an agreement for land purchase post filing of the winding-up petition.
2. The key issue revolved around the validity of the agreement to sell the land from the Company in liquidation, with the appellant seeking direction for sale deed execution.
3. The court highlighted the State law's requirement for compulsory registration of such agreements, rendering the unregistered agreement unenforceable as per Section 49 of the Registration Act.
4. The appellant's argument for alternative evidence of the agreement was refuted, citing the Indian Evidence Act's provisions and the Supreme Court's precedents on the matter.
5. The court emphasized that without a valid agreement, the appellant could not seek direction for sale deed execution or permission for specific performance, as it would lead to unnecessary costs and delay in liquidation proceedings.
6. Reference was made to Section 446 of the Companies Act, emphasizing the court's role in safeguarding the Company in liquidation from wasteful litigation and unnecessary costs.
7. The judgment cited precedents where permission for specific performance post liquidation was denied, considering public policy and the Company's interests post liquidation order.
8. Ultimately, the appeal was dismissed, emphasizing the lack of merit in seeking specific performance without a valid and enforceable agreement post liquidation order.