Auction sale confirmation without court authority is a nullity, and later sale documents cannot validate the illegal sale.

Where a company court had expressly required its own confirmation of an auction sale and association of the Official Liquidator, the Recovery Officer lacked authority to confirm the sale independently. A confirmation made without jurisdiction was a nullity, and the subsequent sale certificate and registered sale deed could not validate it or create enforceable rights. The absence of the Official Liquidator's participation provided an additional basis for interference. Although the purchaser had paid the full consideration and incurred incidental expenses after the illegal confirmation, the sale was not restored and only limited equitable relief was granted.

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Issues: Whether the sale of the company's assets in favour of the appellant, confirmed by the Recovery Officer without the company court's approval, could be set aside, and whether the appellant was entitled to restoration of the sale or other equitable relief.

Analysis: The company court had imposed an express condition that the proposed auction sale would be subject to its confirmation, and the Official Liquidator was to be associated with the process. In such circumstances, the Recovery Officer had no authority to confirm the sale. An order passed without jurisdiction does not create enforceable rights, and the subsequent issuance of a sale certificate and registration of the sale deed could not validate the illegal confirmation. The Court also held that the absence of participation of the Official Liquidator furnished an additional ground supporting interference with the sale. At the same time, the Court noticed that the appellant had paid the entire sale consideration and had incurred incidental expenditure after the illegal confirmation.

Conclusion: The setting aside of the sale was upheld and the appellant was not entitled to restoration of the auction purchase, but the Court granted limited equitable relief by directing payment of Rs. 20 lakhs to the appellant.

Ratio Decidendi: Where a court has expressly required confirmation of an auction sale by itself, any confirmation made by an without authority is a nullity and all consequential acts based on it are of no legal effect, though equitable relief may still be granted in appropriate circumstances.

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