Strict compliance in liquidation sales required; vague notices and sale beyond transferable interests cannot sustain confirmation.

A liquidation sale must comply strictly with the court-prescribed procedure under Rule 273, including clear identification of the assets, proper public auction or sealed tender process, and supervision by the official liquidator. Where the sale notification is vague, omits a material participant, and is not conducted in the required manner, confirmation of sale is unsustainable. The company's sale can extend only to its transferable interest; leasehold rights beyond the company's own interest and movable assets not properly notified cannot be validly sold without following the statutory procedure under the State Financial Corporations Act, 1951. The confirmation order was set aside and the matter remitted for a fresh sale in accordance with law.

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Issues: (i) whether the sale of the assets of the company in liquidation was conducted in compliance with Rule 273 of the Companies (Court) Rules, 1959; and (ii) whether the leasehold rights in the plot and the movable assets could have been sold and confirmed in the manner adopted without following the statutory procedure under the State Financial Corporations Act, 1951.

Issue (i): whether the sale of the assets of the company in liquidation was conducted in compliance with Rule 273 of the Companies (Court) Rules, 1959.

Analysis: The sale notification omitted a material participant required by the earlier direction of the Company Court, described the sale in a vague manner, and did not specify the assets with sufficient clarity. The notification contemplated invitation of offers and inter se bidding, but the assets were not sold by a proper public auction in the manner required by the rule. The procedure adopted did not conform to the statutory requirement that the sale be conducted by the official liquidator under court supervision by public auction or sealed tenders in the manner directed by the Court.

Conclusion: The sale procedure was not in compliance with Rule 273 and the objection to confirmation of sale succeeded.

Issue (ii): whether the leasehold rights in the plot and the movable assets could have been sold and confirmed in the manner adopted without following the statutory procedure under the State Financial Corporations Act, 1951.

Analysis: The company had only leasehold rights in the plot, while ownership remained with the allotting authority. The record also showed that the movables and plant and machinery taken into possession were not properly notified for sale. The statutory procedure for dealing with mortgaged property under the State Financial Corporations Act, 1951 was not followed, and the sale could not validly extend to property beyond the company's own transferable interest. On that basis, confirmation of the sale could not be sustained.

Conclusion: The leasehold rights and unnotified movable assets could not validly be sold and confirmed in the manner adopted.

Final Conclusion: The impugned confirmation order was unsustainable, the appeal was allowed, and the matter was remitted for a fresh sale of only the transferable interests and movable assets in strict compliance with law.

Ratio Decidendi: In a liquidation sale, only the company's transferable interest can be sold, and the sale must strictly follow the prescribed court-supervised procedure; any material departure from the statutory mode of sale renders the confirmation invalid.

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