SARFAESI enforcement in liquidation must yield to Company Court control and coordination with the Official Liquidator.

A secured creditor's enforcement rights under the SARFAESI Act continue even after a company enters liquidation, but those rights must be exercised subject to the leave and control of the Company Court. Once a winding-up order is made and the Official Liquidator is in charge of the assets, any action affecting those assets must be coordinated with the liquidation process and carried out on terms fixed by the Court. The sale should therefore be conducted with the Official Liquidator's cooperation, proper publicity and valuation, and remain subject to court confirmation. The SARFAESI framework does not override the Companies Act, 1956 in this context.

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Issues: Whether a secured creditor could invoke the SARFAESI Act to take possession and sell the assets of a company in liquidation without the leave and control of the Company Court, and whether the sale process had to be coordinated with the Official Liquidator under section 446 of the Companies Act, 1956.

Analysis: The SARFAESI Act operates in addition to, and not in derogation of, the Companies Act, 1956. Once a winding-up order has been made and the Official Liquidator is in control of the company's assets, no proceeding affecting those assets can be pursued except with the leave of the Company Court and on terms fixed by it. The secured creditor's right under section 13(4) to take possession and sell secured assets was therefore not excluded, but its exercise had to be harmonised with the supervisory powers of the Company Court so that the liquidation process and the secured creditor's interests moved together. The Court also emphasized that the sale should be conducted with proper publicity and valuation and remain subject to confirmation by the Court.

Conclusion: The secured creditor was permitted to proceed with the sale in collaboration with the Official Liquidator and under the guidance of the Company Court, and not independently of the winding-up jurisdiction.

Ratio Decidendi: The SARFAESI Act does not oust the Company Court's control over assets of a company in liquidation, and the secured creditor's enforcement powers must be exercised subject to the leave and directions of the Company Court.

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