IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Company Application No.184 of 2005 in Company Petition No. 26 of 1995 Mr.Mangal Prabhat Lodha ..Applicant vs. 1. The Official Liquidator of M/s Shreeniwas Cotton Mills Ltd. and another ..Respondents Mr.V.V.Tulzapurkar, Sr.Advocate with Mr.Cyrus Ardeshir i/b Mr.B.B.Parekh for applicant. Mr.B.Palav i/b Amarchand Mangaldas for respondent no.2. Mr.S.Ramakantha, Dy.Official Liquidator present. CORAM S.C.DHARMADHIKARI J. CORAM S.C.DHARMADHIKARI J. CORAM S.C.DHARMADHIKARI J. 17th April, 2008 17th April, 2008 17th April, 2008 P.C. P.C. P.C. 1. The Company Application invokes the powers of this Court under section 536(2) of the Companies Act. 2. Sub-section (2) is very clear in as much as any disposition of the property (including Actionable Claims ) of the Company and any transfer of shares in the company in winding up or alteration in the status of its members, made after the commencement of winding up, shall unless the Court otherwise orders be void. 3. Mr.Tulzapurkar, learned Senior Counsel appearing for the Applicant submits that the company (in the present case respondent no.1) was wound up on 25th July, 1984. He invites my attention to the affidavit which has been filed in support and submits that the applicant has acquired 22921 equity shares of Rs.100/- each of respondent no.1 (company in liquidation) pursuant to the Public offer made by respondent no.2 - Life Corporation of India. The Life Corporation of India has made this offer pursuant to the policy decision taken by it. The applicant has pointed out that he purchased the shares and rate is of Rs.608/- per equity share. The Life Corporation of India has confirmed by letter dated 16th January, 2004 that it has accepted the bid of the applicant and has directed him to make payment before 17th January, 2004. The payment in full has been made to L.I.C. The applicant in the additional affidavit has pointed out the mode by which the payment has been made. He has also pointed out that requisite Demand Drafts have already been forwarded to the Official Liquidator. 4. The Official Liquidator had filed two affidavits and submitted that upon strict proof and confirmation of the details, such as number of shares, amount involved, payment of the entire amount etc. this Court may pass appropriate orders. 5. Mr.Tulzapurkar submits that due compliance is made with the requisitions of the Liquidator vide affidavit in reply and additional affidavit. 6. L.I.C. is party to this company application and is duly served. L.I.C. has relied upon the affidavit filed in reply to the company application no.1367 of 2007 in Company Application No.184 of 2005 which was filed in the present company petition. L.I.C. has stated that the share of the company in liquidation are unlisted. There was no scope for respondent no.2 to LIC to sell the shares in open market and liquidate its investments. Pursuant to the same and since there were offers, the L.I.C. thought of disposing of the shares. The price offered was not in tune with the market conditions. In such circumstances, the L.I.C. considered the offers and decided to call upon the bidders for negotiations. Accordingly, brokers who had approached the L.I.C. were addressed communication and pursuant to the bid/offer invited a scrutiny was undertaken. All institutional guidelines have been followed. The press release was issued. The affidavit proceeds to state that due compliance has been made by L.I.C. of all rules, regulations and norms. Thus, the L.I.C.’s decision to liquidate the shares is in public interest and considering that it was a dead investment, the L.I.C. decided to dispose of the same. The disposal is in a transparent manner as pointed out in the affidavit. It is in such circumstances, that the Counsel appearing for the L.I.C. submits that it has received the entire consideration of Rs.1,39,00,000/- from the applicant in the present company application. The requisite details of the payment made in full are disclosed in paragraphs 4 and 5 of the additional affidavit. It is in such circumstances that in para 7 of the affidavit, it is stated by the applicant that on 27th March, 2005 all documents have been duly forwarded to the Official Liquidator. 7. I am satisfied from a perusal of the above material that the necessary permission can be granted by exercising powers that are conferred upon this Court by the Company Act. The decision of the L.I.C. to liquidate its equity shares in the manner stated in the affidavit and reiterated by the Counsel appearing for the same demonstrates that the sale is not contrary to public interest or public policy. The Courtis empowered to protect bonafide transactions. None has come forward lto urge that LIC has not acted in a transparent and bonafide manner. Leave, therefore, deserves to be granted. 8. Company Application is, therefore, made absolute in terms of prayer clauses (a) and (b). No costs. (S.C.DHARMADHIKARI J.) (S.C.DHARMADHIKARI J.) (S.C.DHARMADHIKARI J.)