Sale proceeds may be retained absent verified liquidation claims, subject to workmen's priority and pari passu unsecured claims.

Where sale proceeds from immovable property were held by a financial institution, the Court held that retention was permissible because no verified unsecured creditors' claims or quantified workmen's dues were shown for immediate distribution. The funds remained subject to any future verified unsecured claims on a pari passu basis and to prior satisfaction of workmen's dues. The Court also held that the official liquidator could not insist on transfer of the proceeds without verified claims or prior written intimation of advertisement expenses. The impugned orders were modified accordingly, while the petitioner remained bound by its undertaking.

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Issues: (i) Whether the petitioner was entitled to retain the amount realised from sale of the immovable properties, subject to the claims of any verified unsecured creditors and workmen in liquidation; (ii) whether the official liquidator could insist on transfer of the sale proceeds to it in the absence of verified claims and prior communication of advertisement expenses.

Issue (i): Whether the petitioner was entitled to retain the amount realised from sale of the immovable properties, subject to the claims of any verified unsecured creditors and workmen in liquidation.

Analysis: The amount realised from the immovable properties was lying with the petitioner, and the petitioner was not a secured creditor in relation to that amount. At the same time, no verified claim of any unsecured creditor had been shown, and the record did not establish any quantified workmen's claim requiring immediate distribution. The Court also noted that the petitioner had already undertaken to abide by any future verified claims and that any such claims would rank pari passu with the petitioner's claim to the extent applicable, while workmen's dues would have priority.

Conclusion: The petitioner was entitled to retain the amount realised from sale of the immovable properties, subject to future verified claims of unsecured creditors on a pari passu basis and prior satisfaction of workmen's dues.

Issue (ii): Whether the official liquidator could insist on transfer of the sale proceeds to it in the absence of verified claims and prior communication of advertisement expenses.

Analysis: The Court found no verified or quantified claims justifying immediate transmission of the money to the official liquidator. It also recorded that the costs of further advertisements had not been communicated in writing, though the petitioner had undertaken to bear such costs. In these circumstances, insistence on transfer of the funds to the official liquidator was not warranted.

Conclusion: The official liquidator could not insist on transfer of the proceeds in the absence of verified claims and prior intimation of the advertisement costs.

Final Conclusion: The impugned orders were modified so that the petitioner could retain the sale proceeds from the immovable properties, while remaining bound by future verified claims and by the undertaking regarding advertisement expenses and any subsequent lawful distribution.

Ratio Decidendi: Where no verified unsecured or workmen's claims are shown, sale proceeds lying with the financial institution need not be transferred to the official liquidator, and distribution must respect workmen's priority and pari passu treatment of unsecured claims only when such claims are established.

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