Winding up sale terms control, and individual electricity dues need not be specially disclosed in auction notices.

In winding up, the Official Liquidator must sell assets under the Companies Act, 1956 and the Court-approved sale terms, and is not required to list individual electricity arrears or other unsecured claims in the sale advertisement. Creditors cannot compel insertion of a special condition that a purchaser must clear such dues before obtaining future supply, because claims must be pursued through the statutory liquidation process under sections 529, 529A and 530. The amended electricity supply code did not override the winding up regime or require modification of the auction notice or sale conditions.

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Issues: (i) whether electricity dues of the applicant companies were required to be specifically disclosed in the sale advertisement and terms for sale of the assets of the companies in liquidation; (ii) whether the applicants could compel the Official Liquidator to incorporate such disclosure and impose a corresponding condition on prospective purchasers; and (iii) whether the amended electricity supply code altered the scheme governing sale of assets in winding up proceedings.

Issue (i): whether electricity dues of the applicant companies were required to be specifically disclosed in the sale advertisement and terms for sale of the assets of the companies in liquidation

Analysis: The sale of assets in winding up is governed by the Companies Act, 1956 and the Companies (Court) Rules, 1959. The Official Liquidator had already framed terms of sale approved by the Court, including sale on an as is where is basis and conditions that the purchaser would bear its own utility requirements and statutory dues as applicable. The applicants were not secured creditors, and their claims, if lodged, would fall within the statutory framework for claims in winding up. The Court held that the sale advertisement was not required to list individual unsecured or preferential creditors or to insert a special warning regarding electricity arrears.

Conclusion: The electricity dues were not required to be separately disclosed in the sale advertisement or proclamation.

Issue (ii): whether the applicants could compel the Official Liquidator to incorporate such disclosure and impose a corresponding condition on prospective purchasers

Analysis: The Court found no statutory provision or rule authorising the applicants to insist that the Official Liquidator modify the sale proclamation to include their dues and a condition that future electricity connection would be denied unless those dues were paid. The applicants were required to lodge their claims before the Official Liquidator in accordance with the statutory priority scheme under sections 529, 529A and 530 of the Companies Act, 1956. The requested direction would have bypassed that scheme and conferred a status not available under the winding up .

Conclusion: The applicants were not entitled to compel insertion of such a condition in the sale process.

Issue (iii): whether the amended electricity supply code altered the scheme governing sale of assets in winding up proceedings

Analysis: The Court held that the electricity regulations operated in the relationship between the electricity company and an intending purchaser after acquisition of the property, and did not control the statutory regime governing the Official Liquidator's sale of assets. The amended supply code could not override the Companies Act, 1956 or the Court-approved terms of sale. The cited electricity-law decisions did not assist the applicants on the facts of the case.

Conclusion: The amended electricity supply code did not require modification of the winding up sale advertisement or terms.

Final Conclusion: The statutory winding up framework and the Court-approved sale conditions prevailed, and the applicants were left to pursue their claims through the ordinary liquidation process rather than by inserting special conditions into the auction notice.

Ratio Decidendi: In winding up, the Official Liquidator must conduct sale of assets in accordance with the Companies Act, 1956 and the Court-approved terms of sale, and individual creditors cannot require special disclosure or conditions in the sale advertisement unless authorised by statute or the winding up scheme.

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