In Brief
A sugar company entered liquidation in 1999, and an Official Liquidator took charge of its assets. In 2000, the Company Court permitted a creditor bank to pursue recovery proceedings before the Debt Recovery Tribunal (DRT), subject to conditions including no coercive action without the Liquidator's involvement. The bank later obtained a recovery certificate and the DRT's Recovery Officer conducted an auction, selling assets to Anita International for Rs 10.25 crores in 2005. The High Court found the sale violated the 2000 Court order and lacked the Official Liquidator's proper involvement. The Supreme Court held that once a company is in liquidation, asset sales must be conducted with the Liquidator's association; court-imposed conditions remain binding on the Recovery Officer; and workmen's dues must be protected under the Companies Act. The appeal was dismissed.
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