Deemed custody of liquidation assets requires surrender to the Official Liquidator when possession is claimed without dispute.

Assets of a company in liquidation remain in the deemed custody of the Court, and a person holding such property must surrender it to the Official Liquidator when called upon to do so. Here, the vehicle was shown in the statement of affairs as a company asset in the respondent's possession, and the respondent neither replied to the notice nor disputed the material facts. Continued possession was therefore unauthorised and inconsistent with the winding-up regime and the Companies (Court) Rules, 1959. The respondent was rightly directed to deliver the scooter to the Official Liquidator within the time granted.

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Issues: Whether the respondent, being in possession of an asset belonging to a company in liquidation, could be directed to hand over the asset to the Official Liquidator.

Analysis: Upon winding up, the assets and effects of the company are deemed to be in the custody of the Court under section 456(2) of the Companies Act, 1956. The statement of affairs showed the scooter as a company asset in the respondent's possession. The respondent did not respond to the notice requiring surrender of the vehicle and did not dispute the material facts. In these circumstances, continued possession by the respondent was unauthorised and contrary to the obligations arising under the winding-up provisions and the Companies (Court) Rules, 1959.

Conclusion: The respondent was liable to deliver the scooter to the Official Liquidator and was rightly directed to do so within the time granted.

Ratio Decidendi: Property of a company in liquidation remains under the deemed custody of the Court, and any person in possession of such property must surrender it to the Official Liquidator when called upon to do so.

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