Kamani Metallic Oxides Limited vs Kamani Tubes Limited on 29 June, 1982
In R.C.Mehta's case [1970] 40 Comp Cas 1230 (Guj), the judge based his decision on the following three factors, viz., (1) the plain language of s. 536(2) shows that the order contemplated by the said provisions can be passed only after a winding up order is passed. (2) the order would become otiose if no winding up order is passed ultimately. 93) The liquidator who can challenge the transaction is not in the picture. There wer considerations which weighed with Vaisey J. in In re Miles Aircraft Ltd. [1948] 1 All ER 225; 18 Comp Cas 250 (Ch D). with respect we are unable to agree with this view. Firstly, the opening clause of S. 536(2). "In the case of winding up" does not mean "after the winding up order is passed " or "upon passing such order." It means "during winding upto order is proceedings", which admittedly commence on the date on which the petition for winding up is filed. This interpretation which we are putting does not leave bona fide dispositions of assets of the company, open to challenge at the hands of the liquidator, in the event of the winding up order being passed. Some-times dispositions would be necessary in the interest of the company and thus in the ultimates interest of the creditors of the company. during the pendency of the application for winding up. But the directors would be reluctant to enter into transactions of their own for fear of the transactions being declared invalid on the passing of the winding up order. The company court must have jurisdiction to protect such transactions . We,therefore fell that rule of harmonious contrucontions supports the view that the court can exercise juridication under s. 536(20, even before the winding up order is made. THe facts that the order would become otiose, if the application for winding up is ultimately rejected, does not take away the jurisdiction.