Official liquidator fee cannot be charged from sale proceeds when court sells secured assets and liquidator does not realise them.

Section 451 of the Companies Act and rule 291 of the Companies (Court) Rules, 1959 apply only where the official liquidator realises property so as to attract the prescribed fee payable to the Central Government. Where secured property is sold by the court through the District Judge, auction expenses are separately met, and the official liquidator does not undertake the realisation of the secured assets, there is no statutory basis to claim a fee from the secured creditor's share of the sale proceeds. On that footing, the objection to release of the proceeds fails and the secured creditor remains entitled to the amount lying with the court.

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Issues: Whether the official liquidator and the Central Government were entitled to a prescribed fee from the sale proceeds when the secured property was sold by the court through the District Judge and not realised by the official liquidator.

Analysis: Section 451 of the Companies Act and rule 291 of the Companies (Court) Rules, 1959 apply only where the official liquidator acts as liquidator and realises property so as to attract the prescribed fee payable to the Central Government. Here, the property was auctioned by the court, the auction expenses were separately met, and the official liquidator did not undertake the realisation of the secured assets for the applicant-bank. The statutory basis for claiming a fee from the applicant's share of the sale proceeds was therefore absent.

Conclusion: The objection of the official liquidator failed, and the applicant was entitled to receive the sale proceeds lying with the court.

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