Company in liquidation assets remain under Company Court custody; secured creditor cannot compel transfer to Recovery Officer for execution.

A company in liquidation remains in the custody of the Company Court under the Companies Act, 1956, so its assets cannot be transferred out for execution merely because a secured creditor holds a Recovery Certificate from the DRT. The DRT recovery framework under the 1993 Act operates through the Recovery Officer and the prescribed statutory procedure, and the creditor cannot compel the Company Court to hand over liquidation assets to that mechanism. If money realised from property already in the Court's custody is involved, the Recovery Officer may seek appropriate directions from the Court, but not transfer of the assets themselves. The creditor's application was therefore not maintainable.

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Issues: Whether a secured creditor who has obtained a Recovery Certificate from the Debts Recovery Tribunal can seek transfer of the assets of a company in liquidation from the custody of the Company Court to the Recovery Officer for execution of the certificate.

Analysis: Under the Companies Act, 1956, once a winding-up order is made, the properties of the company are in the custody of the Company Court and sale of those assets can be conducted only with the sanction and confirmation of the Court. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 provides a separate recovery mechanism through the Tribunal and Recovery Officer, but that mechanism requires the Recovery Officer to proceed in the manner laid down in the Act and in the Second and Third Schedules to the Income-tax Act, 1961. The statutory scheme does not authorize a secured creditor to move the Company Court for transfer of assets to the Recovery Officer. Where money realised from property in the custody of the Court is involved, the Recovery Officer may seek appropriate orders from the Court, but the assets themselves cannot be transferred at the instance of the creditor. The cited precedents did not alter this position, because they concerned the exclusivity of DRT adjudication and execution, not a creditor-initiated transfer of assets from the Company Court.

Conclusion: The application was not maintainable and the secured creditor was not entitled to seek transfer of the company's assets to the Recovery Officer.

Ratio Decidendi: A company in liquidation remains under the custody of the Company Court, and a secured creditor cannot compel transfer of its assets to the DRT recovery machinery; the Recovery Officer must act within the statutory recovery procedure and, if necessary, seek directions from the Court in respect of money or property already in its custody.

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