Winding-up asset sales remain under court supervision, and the official liquidator's power is not absolute.

In company winding up, the company's property remains in the custody of the court, and the official liquidator holds it subject to the court's control. The liquidator's power to sell is not absolute; it requires sanction and remains open to judicial supervision. The court may issue directions, modify sale conditions, and choose a more beneficial mode of sale to protect creditors and secure proper realisation of assets. The earlier Division Bench order, read in context, did not exclude the court's power or require that the official liquidator alone conduct or approve the sale. The matter was remitted for consideration on merits with this legal position clarified.

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Issues: Whether, in winding up proceedings, the company's assets vest in the official liquidator so as to exclude the court's power to issue directions for their sale, and whether the official liquidator must be the sole authority to conduct or approve the sale of such assets.

Analysis: The statutory scheme under sections 456, 457 and 458 of the Companies Act, 1956, read with rules 272 and 273 of the Companies (Court) Rules, 1959, shows that the company's property comes into the custody of the court, while the official liquidator holds it as custodian under the court's control. The liquidator's power to sell is not absolute and remains subject to sanction and supervision of the court. The court may issue directions, modify sale conditions, and adopt a beneficial mode of sale where required to protect the interests of creditors and secure proper realisation of the assets. The earlier Division Bench order, read in context, did not lay down that the official liquidator alone must conduct the sale or that the court lacks power to direct an appropriate sale process.

Conclusion: The assets do not vest in the official liquidator in the sense contended, and the court retains power to regulate and direct the sale process. The earlier Division Bench decision does not bar consideration of the matter on merits.

Final Conclusion: The matter was sent back for consideration by the company judge, with the legal position clarified that winding up assets remain under the court's custody and the court may issue appropriate sale directions in aid of the liquidation.

Ratio Decidendi: In company winding up, the assets remain in the custody of the court and the official liquidator acts subject to the court's supervision; consequently, the court may direct or regulate the sale of assets in a manner beneficial to the liquidation estate.

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