HC Protects Applicant’s Property Post Winding-Up as Sale Agreement with MIDC Approval Was Deemed Fair and Bona Fide

Case Details: Helbon Engineers (P.) Ltd. v. Ferral Anant Machinery Manufacturers (P.) Ltd. - [2024] 163 taxmann.com 775 (HC-Bombay)

Judiciary and Counsel Details

• • Abhay Ahuja, J.
  • Sarosh Bharucha, Hrushi Narvekar, K.V Ramdasan & Arnav Rane, Advs. for the Appellant.
  • Ranjeev Carvalho & Chetan Shelake, Advs. for the Respondent.

Facts of the Case

In the instant case, the Maharashtra Industrial Development Corporation (MIDC) leased a property in favour of the respondent company. A petition for winding up against the respondent was filed before the instant Court, and an Official Liquidator (OL) was appointed.

The applicant company purchased the said property and leasehold rights from the respondent. The applicant issued a public notice inviting objections to the transfer of the said property, but no objections were received.

The Respondent applied to MIDC to transfer the said property in favour of the applicant, which was granted. A sale deed was duly registered in favour of the applicant.

Meanwhile, OL submitted a liquidation report for the respondent, and the order to wind up the respondent was passed by the instant Court. The OL visited the said property and informed the applicant that it would take possession of the said property in view of the winding-up order.

The applicant filed a civil suit before the Civil Judge seeking a declaration that the sale agreement was valid, subsisting, and binding. An interim order was passed restraining OL from dispossessing the applicant of the said property.

The OL filed an application to reject the suit, which was accepted. The applicant then filed an instant interim application seeking various reliefs to declare that the sale agreement was valid and to ratify the sale.

It was noted that the applicant conducted its due diligence before entering into the sale agreement; it paid the entire consideration to the respondent. The sale agreement was duly registered after obtaining permission from MIDC and confirmed no dues from the creditor bank. Further, there were no creditors, claimants, or workmen claiming against the respondent.

High Court Held

The High Court noted that the transaction evidenced by the sale agreement was not only bona fide but also fair, just and reasonable and deserved to be protected. Thus, such a transaction was to be ratified, and section 536(2) of the 1956 act did not affect the sale agreement.

Therefore, the instant application was to be allowed, and an order of permanent injunction was to be passed restraining OL from disturbing the applicant’s possession of the said property and taking any action against the applicant pursuant to the winding-up order.