Mandatory notice to Official Liquidator is required before recovery sale of assets in liquidation; sale without it is void.

Assets of a company in liquidation vest in the Official Liquidator, so a recovery sale conducted after a winding-up order without notice to the Official Liquidator is invalid. The DRT or recovery officer may proceed against such assets only after giving mandatory notice and hearing the Official Liquidator; failure to do so vitiates the proceedings. Applying that principle, the court rejected reliance on the recovery proceedings to sustain the auction sale and upheld the setting aside of the sale as void.

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Issues: Whether the sale of the assets of a company in liquidation, conducted by the bank pursuant to proceedings before the Debt Recovery Tribunal without notice to the Official Liquidator or intervention of the Company Court, was void.

Analysis: Once the company had been ordered to be wound up, its assets stood vested in the Official Liquidator. The sale and auction were conducted after the winding-up order, and there was no notice to the Official Liquidator before the recovery steps were taken. The legal position, as affirmed by the Supreme Court, is that a Debt Recovery Tribunal or recovery officer may proceed against assets of a company in liquidation only after notice to the Official Liquidator and after hearing him. The absence of such notice is mandatory and vitiates the proceedings. The same principle was applied to reject the attempt to sustain the sale on the strength of the recovery proceedings.

Conclusion: The sale was void and could not be sustained; the challenge to the order setting aside the sale failed.

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