JUDGEMENT
BHATT, J. -
(1.)THIS is an application under section 536(2) of the Companies Act, 1956, by Prasad Mills Ltd., which is sought to be would up, for allowing the applicant company to enter into transactions by creating charge over the movable and/or immovable properties of the company for the purpose of borrowings/advances/credit limits and facilities to be given by the State Bank of India, Commercial Branch, Ahmedabad, and the Industries Development Bank of India for the purpose of meeting the obligations of the company and for the purpose of keeping the business of company going on. It is prayed in the said application that the said transactions be declared as authorised, valid and binding on the company and the petitioning creditor under section 536(2) of the Companies Act.
(2.)SECTION 536(2) of the Companies Act, 1956, reads as under : '536(2). In the case of a winding -up by or subject to the supervision of the court, any disposition of the property (including actionable claims) of the company, and any transfer of shares in the company or alteration in the status of its members, made after the commencement of the winding -up shall, unless the court otherwise orders, be void.'
A question had arisen before a Division Bench of this court in the matter of Navjivan Mills Ltd., Mehsana (Company Application No. 95 of 1984 in Company Petition No. 105 of 1983 - [1986] 59 Comp Cas 201), whether it is competent at this state when no winding -up order is passed to sanction and validate any disposition of the properties of the company. This question has been decided by a Division Bench (Coram : B. K. Mehta and D. H. Shukla JJ.) of this court and it has been held that the court can exercise the jurisdiction of giving directions validating the transactions before the winding -up order is made. A similar view has been taken by my learned brother, S. B. Majmudar J. in Company Application No. 209 0f 1984 in Company Petition No. 163 of 1984. (Commercial Ahmedabad Mills Co. Ltd. [1986] 60 Comp Cas 717 (Guj)). In view of this settled position, the same question has not been raised before me and in view of such a position, there does not appear to be any serious objection from any of the parties concerned. Hence, in the present application, I have only to decide whether, in the facts and circumstances of the present case, this application should be granted or not. A few relevant facts may be stated in order to appreciate whether the transactions sought to be entered into are for the benefit of all the concerned persons and whether, on the facts and circumstances of the present case, I should exercise my jurisdiction notwithstanding the fact that no winding -up order has been passed in the present case.
(3.)DUE to financial stringency, the applicant -company had to close down its textile unit with effect from January 12, 1984. Thereupon, the Textile Labour Association filed an application in the Labour Court at Ahmedabad, under the Payment of Wages Act. In the said application, the Labour Court passed an order of attachment of movable as well as immovable properties of the applicant company to secure wages payable to the company, namely, M/s. Parikh Agency, moved this court by filing a winding -up petition being Company Petition No. 20 of 1984 (sic). In the said petition, this court passed an order as under : 'Notice to the company returnable on February 22, 1984, Ad interim relief in terms of para 8(c) granted till further orders.'
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