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TMI Blog2011 (7) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... e Companies Act. Let the order be notified to the Registrar of Companies in accordance with the Companies Act, 1956 and the Companies (Court) Rules, 1959. The Ex-Directors will hand over the assets to the Official Liquidator and file statement of affairs within 21 days. The Official Liquidator will thereafter, submit a report to the Court." 2. Prior to the above order, this Court while entertaining the petition of the Reserve Bank of India for winding up of the company vide order dated 27.10.1999 had directed for issuance of notice to the respondent-company and had restrained the respondents company, its servants and agents from transferring, alienating and disposing of any of the assets of the company in any manner. The above interim order dated 27.10.1999 which is still continuing is reproduced herein below:- "Issue notice to the respondent company Krishi Export Com. Corporation Limited having its registered office at Krishi Export Plaza, Sigra, Varanasi to show cause why the petition be not allowed fixing 7.12.1999 by which date the respondent company may file its reply. The petitioner shall take steps to serve by registered post within one week. List on 7.12.99. Meanwhile, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Section 53-A of the Transfer of Property Act, 1882 (in short T. P. Act) and as such the official liquidator has no authority of law to inter meddle with his rights on the strength of the winding up order. It has further been submitted that part of property is under tenancy of M/S Green Power International Private Limited from whom the applicant had been realizing rent but pursuant to the winding up order the official liquidator has issued letter dated 25.5.2009 to the said tenant directing it to pay rent henceforth to the official liquidator. 6. On the other hand, Sri Arnab Banerji, learned counsel appearing for official liquidator on the basis of the judicial report of the official liquidator no. 106 of 2011 submitted that the the agreement to sale executed in favour of the applicant is a void document as it has been executed in violation of the restrain order dated 27.10.1999 passed by this Court in the winding up petition. He has also placed reliance upon sections 536 (2) and 537 of the Companies Act, 1956 which provides that any disposition of the property made after the commencement of the winding up and any sale held without the leave of the Court shall be void. 7. In s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Will, if any, executed by the Ex Managing Director K.K. Gupta in respect of the above property proposing to transfer rights to the applicant is wholly meaningless and is of no avail. It would not confer any rights in respect of the property in question upon the applicant. 18. Now, I examine the effect of the power of attorney executed by K. K Gupta, Ex Managing Director. 19. "Attorney" in its broadest sense means to put someone in place of another i.e., a person appointed by the principal to do something in his absence on his behalf. 20. Section 2 (21) of the Indian Stamp Act, 1899 defines "Power of Attorney" to include any instrument empowering a person to act for and in the name of the person executing it. In other words, it is a formal instrument of authority given by one person to another empowering him to represent him or to act on his behalf. A power of attorney by its very nature is always revocable but lately, a trend of executing irrevocable power of attorney has come into existence. However, even an irrevocable power of attorney cannot operate in perpetuity. It ceases automatically as soon as the principal is dead or the person authorized becomes incapable of actin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the T P. Act., as by Section 54 of the T. P. Act a contract of sale of real property does not create any interest or charge upon the land. 26. The Supreme Court in Purnendu Nath Tagore v. Administrator General of West Bengal AIR 1954 SC 51 observed that according to Indian law, which is embodied in Section 54 of the T. P. Act, a contract of sale of land does not of itself create any interest in the property which is the subject matter of the contract. 27. The above view was reiterated by the larger bench of 5 Judges in the case of Radhakrishna Laxminarayan Toshniwal v. Shridhar Ramchandra Alshi AIR 1960 SC 1368 and in placing reliance upon Section 54 of the T P. Act it was held that where the parties enter into a mere agreement to sell, it creates no interest in favour of the vendee and the proprietary title does not validly pass from the vendors to the vendee. 28. In Ram Baran Prasad v. Ram Mohit Hazara AIR 1967 SC 744 it was observed that previous to the enactment of T. P. Act it was accepted doctrine in India that the agreement created an interest in the land in favour of the purchaser but there has been a change in the legal position since the passing of the T. P. Act. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fidely entered into an agreement to purchase the property on the strength of the order of the company Law Board dated 15.9 1999 which order probably was not brought to the notice of this Court in obtaining the interim order. Therefore, there is no denial of the fact that the applicant is a bona fide and genuine person who had entered into an agreement with the Ex Managing Director of the respondent company for purchasing the property for valuable consideration. 37. The Apex Court in Bai Dosabai v. Mathura Das Govind Das AIR 1980 SC 1334 in considering the provisions of Section 54 of the T. P. Act laid down that the concept of legal and equitable ownership on the execution of an agreement to sell of immovable property as is understood in England is completely alien to Indian Law which recognized only one owner but went on to observe as under:- "It is clear from the ultimate para of Section 54 and the ultimate and penultimate paras of Section 40 of the T. P. Act that a contract for the sale of immovable property though does not, of itself create any interest in or charge on such property creates an obligation annexed to the ownership of immovable property, not amounting to an inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e terminated unless expressly provided in the contract or for the reasons provided in the contract. The aforesaid principal is part of Section 202 of the Contract Act which provides where the agent has interest in the property, the agency cannot be terminated causing prejudice to his interest unless there is a provision to this effect in the contract. 43. It is based upon the aforesaid two provisions of Section 53-A of the T.P. Act and section 202 of the Contract Act, the possession and use of the property by the applicant stands protected. 44. Section 536(2) of the Companies Act, 1956 stipulates that any disposition of the property of the company made after the commencement of the winding up shall be void unless the Court otherwise directs. 45. Section 537(1) of the Act provides that where any company is being wound up by Court, any sale made without the leave of winding up by the Court after such commencement, shall be void. 46. It is important to note that winding up of the company commences with the presentation of the petition for winding up as provided under Section 441(2) of the Companies Act. 47. In Pankaj Mehra v. State of Maharashtra [2002] 2 SCC 756 it has been rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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