JUDGMENT : K. Lakshman, J. Heard Sri B.S Prasad, learned Senior Counsel representing M/s Pearl Law Associates, learned counsel for the appellant, Sri L. Venkateshwar Rao, learned counsel for the 1 st respondent, Sri. G. Kalyan Chakravarthy, learned counsel for respondent Nos.2 and 4 and Sri Duvva Pavan Kumar, learned counsel for 5 th respondent. None appears for 3 rd Respondent. 2. This OSA is filed challenging the order dated 28.03.2025 passed in C.A. No. 70 of 2025 in C.P.No.170 of 2012 and batch, whereby the learned Company Court Judge, held that the auction conducted by appellant bank was not in accordance with law. Learned Judge set aside the auction conducted by appellant bank. 3. The appellant is the Union Bank of India. 1 st respondent herein is the applicant, former Director of 2 nd respondent / company in liquidation. 2 nd respondent is represented by Official Liquidator (OL), 3 rd respondent is a company which offered an amount of Rs.32.39 Crores towards sale consideration in respect of the subject property to the appellant bank. 5 th Respondent is the auction purchaser. 4. The 1 st respondent / Applicant filed C.A.No.70 of 2025 under Section 446 (2) and 537 of Companies Act, 1956 ( hereinafter referred to as ‘Act, 1956’) read with Rule 9 of the Companies (Court) Rules, 1959 ( hereinafter called as ‘Rules 1959’) to declare the action of appellant bank in proceeding against the asset of 2 nd respondent without seeking leave of the Company Court, as illegal. 5. It contended that: i. 2 nd respondent herein was incorporated on 25.07.2006 under the Act, 1956, engaged in manufacture of power distribution of transformers. ii. 2 nd respondent became sick and on 31.10.2013 reference was made to the then Board for Industrial and Financial Reconstruction (BIFR) and it was registered. Upon filing of winding-up petitions, vide order dated 21.08.2018, the company was wound up. Company Court appointed OL to take over the assets and liabilities of 2 nd respondent, to sell the same and disburse the said amount to the creditors. iii. The secured asset i.e. Plot No.40, Industrial Park, Pashamylaram village, Patancheru Mandal, Sangareddy District in Survey No. 315, 317, 318, 319 and 336 admeasuring 20,675 sq.m was taken over by the OL pursuant to the said winding up order. It is in the physical possession of the OL. iv. iii. The secured asset i.e. Plot No.40, Industrial Park, Pashamylaram village, Patancheru Mandal, Sangareddy District in Survey No. 315, 317, 318, 319 and 336 admeasuring 20,675 sq.m was taken over by the OL pursuant to the said winding up order. It is in the physical possession of the OL. iv. As per Sections 446 (1) and Section 537(1) of the Act, 1956, no suit or legal proceeding shall be commenced against the company except by the leave of the court and any attachment, execution, without leave of the company Court is void. v. 1 st respondent/Applicant was the Director of 2 nd respondent, he along with his spouse stood as guarantors for the loan availed by 2 nd respondent by mortgaging their personal properties. They have submitted onetime settlement (OTS) proposal to the appellant bank vide email dated 14.09.2023 offering Rs. 3.00 Crores towards full and final settlement to the extent of value of their personal assets. The said proposal was accepted by the appellant bank vide letter dated 29.09.2023. According to the appellant bank, it has cancelled the said OTS as the amount is not paid by him within due time. vi. 1 st respondent/Applicant has identified a buyer i.e. 3 rd respondent herein, who is willing to pay an amount of Rs.32.29 Crores, and 3 rd respondent has also obtained a demand draft for Rs.10 Crores and offered to the appellant bank. vii. Even then, appellant bank proceeded with auction of the aforesaid secured asset. Despite letter dated 07.01.2025 of the OL, the appellant bank failed to seek leave of the Company Court to proceed with auction of secured asset and has issued E- auction notice dated 27.01.2025 fixing auction on 28.02.2025. Auction was conducted on 28.02.2025. viii. Thus, according to 1 st respondent/Applicant, the said auction, without leave of the Company Court is arbitrary, illegal, and contrary to the provisions of the Act, 1956 , causing irreparable loss to the Applicant and liquidation estate. 5. Auction was conducted on 28.02.2025. viii. Thus, according to 1 st respondent/Applicant, the said auction, without leave of the Company Court is arbitrary, illegal, and contrary to the provisions of the Act, 1956 , causing irreparable loss to the Applicant and liquidation estate. 5. On the other hand, the OL has filed a report dated 28.02.2025, before the learned company court requesting to declare the ongoing sale proceedings as void, and to direct appellant bank to conduct a fresh sale in full association and supervision of the OL from valuation to final sale, and also sought for remitting an amount of Rs.2,00,000/- to the OL towards advertisement charges for publication of notice inviting creditor claims, including workmen and PF dues. 6. The OL further stated that the appellant bank sought NOC on 27.12.2024 to proceed under SARFAESI Act, and issued an e-auction notice on 09.12.2024 fixing auction on 10.01.2025. The OL objected the said conduct of auction by letters dated 07.01.2025 and 06.02.2025, advising the appellant bank that, the secured asset is in the custody OL, no sale can proceed without leave of the Company Court. The OL participation is mandatory at all stages. He has also referred to order dated 01.08.2019 of Company Court in C.A. No.624 of 2018. 7. The appellant bank, by letter dated 14.02.2025, indicated an Asset valuations from empanelled valuers namely M/s Navanirman Associates and M/s. SRA Consultants valuating the land and building at Rs. 23.51 Crores and 24.76 Crores respectively and Plant and machinery at Rs.0.26 Crores, but fixed the reserve price at Rs.21.18 Crores without any basis, and did not involve the OL in valuation and valuation reports, making the process non-transparent and objectionable. The OL further stated that appellant bank must invite and verify creditor claims, but 2 nd respondent has no available funds, thus sought for deposit of Rs.2,00,000/- for advertisement charges. Accordingly, the OL prays that the present sale be declared as void and fresh, lawful sale be directed under Company Court supervision with OL involvement. 8. Opposing the aforesaid contentions, appellant bank contended before the learned Company Court Judge that although statutory notices under Section 13(2) and 13(4) of the SARFAESI Act, were not served on the OL, a sale notice was admittedly issued and communicated to the OL by letter dated 27.12.2024, which according to the bank, constitutes sufficient intimation. 8. Opposing the aforesaid contentions, appellant bank contended before the learned Company Court Judge that although statutory notices under Section 13(2) and 13(4) of the SARFAESI Act, were not served on the OL, a sale notice was admittedly issued and communicated to the OL by letter dated 27.12.2024, which according to the bank, constitutes sufficient intimation. The purpose of notice to the OL is only to ascertain and protect workmen/PF dues and to enable prioritization of claims, not to confer any right to object to the secured-asset sale itself. It further urged that non-service of notices under Section 13 of SARFAESI Act, is not fatal, as the OL raised no objection after 27.12.2024. The present application is not maintainable since the applicant lacks locus to seek a declaration of sale as void or to question the auction process. The appellant bank also contended that having elected to remain outside liquidation since 07.01.2019, creditors’ meeting, it holds an independent statutory right to realize its security without Court leave. It has already fixed the reserve price on the basis of empanelled valuations, and is prepared to safeguard and pay workmen/PF dues from the realized sale proceeds. With the said contentions, appellant bank sought to dismiss the said company application filed by the applicant/ respondent No.1 herein. 9. On hearing both sides and on considering the material on record, learned Company Judge, allowed the company application filed by the 1 st respondent/Applicant holding that 1 st respondent / Applicant has locus to file the said application and it is maintainable. However, learned Judge, set aside the auction conducted by the appellant bank on the ground that the said auction conducted by appellant bank is in violation of the provisions of the Act, 1956 and SARFESI Act and Rules framed thereunder. It was further held that conducting auction by the appellant bank without involving the Official Liquidator at every stage, including at the stage of obtaining valuation report and without putting the OL on notice is illegal. Learned Judge also placed reliance on the principle laid down by the Apex court in Mathew Varghese vs. M.Amritha Kumar , 2014 5 SCC 610 and also Pegasus Assets Reconstruction (P) Limited vs. Haryana Concast Ltd , 2016 (4) SCC 47 and order dated 01.08.2019 in C.A.No.624 of 2018 of this court. 10. Learned Judge also placed reliance on the principle laid down by the Apex court in Mathew Varghese vs. M.Amritha Kumar , 2014 5 SCC 610 and also Pegasus Assets Reconstruction (P) Limited vs. Haryana Concast Ltd , 2016 (4) SCC 47 and order dated 01.08.2019 in C.A.No.624 of 2018 of this court. 10. Aggrieved by the said order, the appellant bank preferred the present appeal contending:- i. 1 st Respondent/Applicant or OL if aggrieved by the measure of sale of the secured asset by the appellant bank, they have to approach the DRT which is the competent forum to adjudicate their grievances. ii. The learned Company Court Judge, erred in entertaining an Ex- Director’s application despite supersession of the Board upon admission of the winding-up petition. iii. The Company Court Judge, failed to appreciate that a secured creditor who opts to stand out of liquidation proceedings is entitled to enforce security independently under SARFAESI Act, without leave of the Company Court. iv. The Company Court Judge incorrectly expanded the role of the OL, ignoring its minimal and procedural character in secured assets. v. The finding disregards that 30-day prior notice and dual valuation by registered valuers. vi. The Court ignored binding ratio in United Bank of India v. Satyawati Tandon , 2010(8)SCC110 on non-interference with SARFAESI measures. vii. Reliance on OTS offer of Respondent No.1 is misplaced as the said proposal was conditional and admittedly not complied with. viii. The Company Court erred in presuming that auction realization of Rs.25.80 Crore shows prejudice to other creditors, despite outstanding admitted dues of Rs.109.62 crore. ix. The interference causes grave prejudice to secured creditors. x. The Company Court erred in overlooking that the OL was duly intimated of the sale, including dual registered valuations, reserve price, and 30-day prior auction notice, with no objection raised, thereby fulfilling all procedural requirements of OL intimation. 11. Whereas, learned counsel for the OL and learned counsel appearing for 1 st Respondent would contend that: i. Once a winding up order is passed, the assets of the company in liquidation stand in custody of Company Court and Sections 446(1) and 537(1) of the Act, 1956 bar any proceedings against the assets of the company in liquidation without the leave of the Company Court. The appellant failed to obtain such leave. ii. The appellant failed to obtain such leave. ii. Excluding the OL from valuation and sale processes defeats the objective of fair and transparent liquidation process. Vide order dated 01.08.2019 in C.A No.624 of 2018, this court has held that the secured creditors must associate with the OL in liquidating securities. iii. Sections 529, 529A and 530 of the Act, 1956, cast a duty on the OL to protect and prioritize claims of secured creditors and workmen. iv. The e-auction conducted by the appellant bank fetched a lower value than could have been realized under Court-supervised liquidation. v. On consideration of the said aspects only, learned Company Court Judge, passed the impugned order and there is no error in it. 12. Whereas learned counsel for 5 th Respondent / auction purchaser contended that the appellant bank suppressed order dated 28.02.2025 and received an amount of rupees 6.45 Crores from it towards 25% of the auction amount. Therefore, it is entitled for refund of it. All the learned counsels appearing for respective parties made their submissions extensively. 13. In support of his contentions, learned counsel for the appellant placed reliance on the principle laid down by the Apex Court in Pegasus Assests (supra), Official Liquidator, Uttar Pradesh and Uttarakhand Vs. Allahabad Bank , (2013) 4 SCC 381 , Jyothi Bhushan Gupta V. Banaras Bank Ltd , AIR 1962 SC 403 , Allahabad Bank V. Canara Bank United Bank of India (supra) , Whirlpool Corporation V. Registrar of Trade Marks, Mumbai , (1998) 8 SCC 1 , Chandra Proteco Limited V. L&T Finance Ltd. & Allahabad Bank , 2018 SCC Online Cal 11717 , Laxmi Fibres Limited V. Andhra Pradesh Industrial Development/corporation Limited , (2015) 16 SCC 464 The Assistant Commissioner of State Tax and Others V. M/s Commercial Steel Limited , Civil Appeal No.5121 of 2021 , Jayanti Ramachandran Ex- Chairman of VTX Industries Ltd. V. Official Liquidator , 2020 SCC OnLine Mad 21330 , Vivek Kumar V. Pearl Cycle Industries Ltd. 1981 Tax LR 2405 , 14. In support of his contentions, learned counsel appearing for OL placed reliance on the principle laid down in Jitendra Nath Singh V. Official Liquidator , (2013) 1SCC 462 , Pegasus (supra) and order dated 1.08.2019 in C.A No. 624 of 2018 of this Court. 15. In support of his contentions, learned counsel appearing for OL placed reliance on the principle laid down in Jitendra Nath Singh V. Official Liquidator , (2013) 1SCC 462 , Pegasus (supra) and order dated 1.08.2019 in C.A No. 624 of 2018 of this Court. 15. Further, Respondent No.5 relied on the principle laid down by the Apex Court in Delhi Development Authority V. Corporation Bank , 2025 INSC 1161 , High Court of Calcutta in Deepak Kumar Agarwal V. Union Bank of India , WPA No. 25571 of 2024 and Division Bench of this Court in K. Indra Mohan V. Union of India Order dated 14.10.2025 in W.P.No.14530 of 2025 of Division Bench of this Court. ANALYSIS AND FINDINGS OF THE COURT: 16. It is not in dispute that vide order dated 21.08.2018, Company Court passed winding up order and appointed OL, who in turn, took over the assets and liabilities of 2 nd respondent including the secured asset. 17. It is also not in dispute that appellant bank proceeded with conduct of auction of the secured asset contending that 2 nd respondent obtained loan by mortgaging the secured assets. 1 st respondent /Applicant and his wife stood as guarantors for the said loan. 18. It is the specific contention of the 1 st respondent / Applicant and OL, that the said auction is in violation of the provisions of the Act, 1956, SARFAESI Act, and the appellant bank failed to put the OL on notice and it has conducted auction without seeking leave of the Company Court, which is mandatory. 19. In the light of the said contentions, it is apt to refer Sections 446, 529(A), 537 of the Act, 1956 and certain provisions of SARFAESI Act and Rules which are relevant are extracted below:- Section 446:- SUITS STAYED ON WINDING UP ORDER (1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the [Tribunal] and subject to such terms as the [Tribunal] may impose. (2) The [Tribunal] shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of – (a) any suit or proceeding by or against the company ; (b) any claim made by or against the company (including claims by or against any of its branches in India) ; (c) any application made under section 391 by or in respect of the company ; (d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company ; whether such suit or proceeding has been instituted, or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960. (4) Nothing in sub-section (1) or sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a high Court. Section 529A. : OVERRIDING PREFERENTIAL PAYMENTS (1) Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in the winding up of a company - (a) workmen's dues ; and (b) debts due to secured creditors to the extent such debts rank under clause (c) of the proviso to sub- section (1) of section 529 pari passu with such dues, shall be paid in priority to all other debts. (2) The debts payable under clause (a) and clause (b) of sub-section (1) shall be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportions. Section: 537. AVOIDANCE OF CERTAIN ATTACHMENTS, EXECUTIONS, ETC., IN WINDING UP BY TRIBUNAL (1) Where any company is being wound up by the Tribunal - (a) any attachment, distress or execution put in force, without leave of the Tribunal against the estate or effects of the company, after the commencement of the winding up; or (b) any sale held, without leave of the Tribunal of any of the properties or effects of the company after such commencement; shall be void. (2) Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government. 20. (2) Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government. 20. Relevant Provisions of SARFEASI Act are as follows:- 13. Enforcement of security interest .— (1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of court or tribunal, by such creditor in accordance with the provisions of this Act. (2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any installment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4). Provided that (i) the requirement of classification of secured debt as non-performing asset under this sub-section shall not apply to a borrower who has raised funds through issue of debt securities; and (ii) in the event of default, the debenture trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of security documents executed in favour of the debenture trustee (4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:— (a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; (b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset. Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt; (c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; (d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. Security Interest Enforcement Rules, 2002 8. Sale of immovable secured assets.- (6) the authorized officer shall serve to the borrower a notice of thirty days for sale of the immovable secured assets, under sub- rule (5): 21. In Pegasus Assets Reconstruction (supra), the Apex Court held that a secured creditor, can enforce its security independent of winding-up proceedings, and that Section 529-A priority applies only to the distribution of sale proceeds, at post sale stage or sale stage. The Court further clarified that the Company Court’s jurisdiction is limited in dealing with surplus, after satisfaction of the secured debt. It was also held that OL, as a representative of the borrower company under winding up, has to be associated not for supplying any omission in the SARFEASI Act, but because of express provisions therein as well as in the Rules. 22. Paragraph No.30 of the said judgment is relevant and it is extracted below:- “30. It was also held that OL, as a representative of the borrower company under winding up, has to be associated not for supplying any omission in the SARFEASI Act, but because of express provisions therein as well as in the Rules. 22. Paragraph No.30 of the said judgment is relevant and it is extracted below:- “30. …..If the borrower is a company in liquidation, the sale proceeds have to be distributed in accordance with the provisions of Section 529-A of the Companies Act; even where the company is being wound up after coming into force of the Sarfaesi Act, if the secured creditor of such company opts to stand out of the winding-up proceedings, it is entitled to retain the sale proceeds of its secured assets after depositing the workmen's dues with the liquidator in accordance with the provisions of Section 529-A of the Company Act. The third proviso is also meant to work out the provisions of Section 529-A of the Companies Act, in case the workmen's dues cannot be ascertained, by relying upon communication of estimate of such dues by the liquidator to the secured creditor, who has to deposit the amount of such estimated dues with the liquidator and then it can retain the sale proceeds of the secured assets. The other two provisos also are in aid of the liquidator to discharge his duties and obligations arising under Section 529-A of the Companies Act. Thus, it is evident that the required provisions of the Companies Act have been incorporated in the Sarfaesi Act for harmonizing this Act with the Companies Act in respect of dues of workmen and their protection under Section 529-A of the Companies Act. In view of such exercise already done by the legislature, there is no plausible reason as to take recourse to any provisions of the Companies Act and permit interference in the proceedings under the Sarfaesi Act either by the Company Judge or the liquidator. In view of such exercise already done by the legislature, there is no plausible reason as to take recourse to any provisions of the Companies Act and permit interference in the proceedings under the Sarfaesi Act either by the Company Judge or the liquidator. As noted earlier, the Official Liquidator as a representative of the borrower company under winding up has to be associated, not for supplying any omission in the Sarfaesi Act but because of express provisions therein as well as in the Rules Hence, the exercise of harmonising that this Court had to undertake in the context of the SFC Act or the RDB Act is no longer warranted in respect of the Sarfaesi Act vis-à-vis the Companies Act. 23. The Apex Court in Official Liquidator, Uttar Pradesh and Uttarakhand (Supra), referring to the principle laid down by it in Jyothi Bhushan Gupta (supra) held that DRT exercises exclusive jurisdiction to adjudicate and sell secured assets under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 ( for short, ‘RDDB Act’), overriding Company Court powers during winding-up under the Act, 1956. The Apex Court referred to Pravin Gada V. Central Bank of India , (2013) 2 SCC 101 wherein it was held that DRT has exclusive jurisdiction to sell the properties in a proceeding instituted by the banks or financial institutions, such sale must be conducted with a notice and association of the OL so that the interests of workman and other stakeholders are duly represented at auction stage. 24. The Apex Court in Allahabad Bank vs. Canara Bank , (2000) 4 SCC 406 held that Section 34 of the RDDB Act, has overriding effect over other laws, including provisions of the Act, 1956 to the extent of inconsistency. 25. It was further held that a secured creditor can realize its security without obtaining leave of the Company Court, by standing outside winding-up. The Apex Court clarified that Company Court’s jurisdiction is not over the enforcement or sale of secured assets , but is limited to the stage of distribution of surplus, if any, remaining after full satisfaction of the secured creditor’s debt , ensuring that such surplus, once remitted, is dealt with as per Section 529-A of the Act, 1956, priorities in winding-up. The decision did not expand the powers of the OL to supervise, control, or veto the sale of secured assets, nor did it hold that the secured asset forms part of the liquidation estate at the stage of realization. 26. Paragraph Nos.62 and 64 of the said judgment are relevant and the same are extracted below:- “62. Secured creditors fall under two categories. Those who desire to go before the Company Court and those who like to stand outside the winding-up. xxx 64. The second class of secured creditors referred to above are those who come under Section 529-A(1)(b) read with proviso (c) to Section 529(1). These are those who opt to stand outside the winding-up to realize their security. Inasmuch as Section 19(19) permits distribution to secured creditors only in accordance with Section 529-A, the said category is the one consisting of creditors who stand outside the winding up. These secured creditors in certain circumstances can come before the Company Court (here, the Tribunal) and claim priority over all other creditors for release of amounts out of the other monies lying in the Company Court (here, the Tribunal). This limited priority is declared in Section 529-A(1) but it is restricted only to the extent specified in clause (b) of Section 529-A(1). The said provision refers to clause (c) of the proviso to Section 529(1) and it is necessary to understand the scope of the said provision.” 27. The Delhi High Court, in Vivek Kumar (supra), held that the applicant therein, not being a creditor, shareholder or contributor, possessed no locus to contest decrees passed against the company and applicant right to challenge was confined only to the personal decree passed against him. The Court analyzed the scope of Section 446 of the Act, 1956, and reaffirmed that unless an applicant falls within the categories recognized under the Act, creditor, contributor or person affected in law, he cannot maintain an application challenging decrees binding on the company in liquidation. 28. The High Court of Madras in Jayanthi Ramachandra (supra) held that a sale pursuant to a valid assignment cannot be interdicted unless fraud or jurisdictional error is demonstrated. Interim protection was granted only to prevent an irreversible situation pending adjudication of the main application, but the Court observed that the company court’s jurisdiction cannot be invoked to unsettle transactions completed under statutory frameworks and recognized by prior binding orders. 29. Interim protection was granted only to prevent an irreversible situation pending adjudication of the main application, but the Court observed that the company court’s jurisdiction cannot be invoked to unsettle transactions completed under statutory frameworks and recognized by prior binding orders. 29. In Jitendra Nath Singh (supra), the Apex Court has unequivocally held that, in liquidation proceedings, the dues of workmen and secured creditors enjoy a pari passu charge under Section 529-A of the Act, 1956. The Court further affirmed that the Official Liquidator acts as the statutory custodian and representative of the liquidation estate, and any sale or transfer of the company’s assets cannot be carried out without due notice. The Apex Court emphasized that such transparency is essential to safeguard the rights of stakeholders and to ensure that the liquidation estate is not alienated without the knowledge of its lawful custodian. 30. Relying on the principle laid down by it, in Whirlpool Corporation (supra), Apex Court in Assistant Commissioner of State Tax (supra), held that the existence of an alternate remedy does not bar to maintain a writ petition under Article 226 of the Constitution of India. However, it may be entertained in exceptional cases involving: (i) breach of fundamental rights; (ii) violation of natural justice; (iii) excess of jurisdiction; or (iv) challenge to the vires of a statute or delegated legislation. 31. In Laxmi Fibres Ltd. (supra), the Apex Court examined whether the OL could claim authority to adjudicate or quantify secured-creditor claims outside winding-up proceedings. Analyzing Sections 529, 529-A and 445 of the Act, 1956, the Court reaffirmed that secured creditors retain the statutory option either to stand outside the winding-up and realize their security independently, or to come within the winding-up fold and prove their debts. The Court further held that where a secured creditor exercises its right outside the winding-up, the OL’s role is limited to ensuring those workmen’s dues and pari passu rights are protected. 32. The High Court at Calcutta in Chandra Proteco Ltd. (Supra) while referring to Pegasus (Supra) it held that the OL if satisfied that the assets of the company in liquidation are secured asset of the bank he should make over the symbolic possession thereof to the applicant bank to effect the sale. 32. The High Court at Calcutta in Chandra Proteco Ltd. (Supra) while referring to Pegasus (Supra) it held that the OL if satisfied that the assets of the company in liquidation are secured asset of the bank he should make over the symbolic possession thereof to the applicant bank to effect the sale. The applicant bank should conduct the sale observing all formalities upon prior notice to the OL and after the sale proceeds available for distribution so that the OL after scrutinizing the claims of the workmen, if any and other secured creditors apart from the banks can formulate a scheme to distribute the same amongst the secured creditors including the applicant bank. 33. The Apex Court in United Bank of India (supra), reaffirmed that the High Courts must exercise extreme restraint in interfering with financial-recovery proceedings under SARFAESI Act, and other debt-recovery statutes. The borrower therein challenged SARFAESI measures initiated by the bank directly under Article 226 of Constitution of India. On examination of the facts of the said case, the Supreme Court held that the High Court should not have entertained the writ petition and passed interim order ignoring the fact that the respondent had an effective and alternative remedy under the provisions of the SARFAESI Act. 34. The sum and substance of the principle laid down in the aforesaid judgments is:- a. A secured creditor can conduct auction of ‘secured asset’ by invoking the procedure laid down under SARFAESI Act, without seeking leave of the Company Court but secured creditor shall necessarily associate with the OL and involve the OL at every stage including the stage of obtaining valuation report of a ‘secured asset.’ b. The secured creditor shall put the OL on notice at every stage of the auction of the secured asset right from the stage of obtaining valuation report to conduct of auction and realization of secured debt. c. Despite availability of alternative remedy, a writ petition is maintainable under Article 226 of the Constitution of India, under the following exceptional cases i.e. 1) breach of fundamental rights, 2) violation of principles of natural justice 3) Excess of jurisdiction 4) challenge to the vires of the statute or delegated legislation. c. Despite availability of alternative remedy, a writ petition is maintainable under Article 226 of the Constitution of India, under the following exceptional cases i.e. 1) breach of fundamental rights, 2) violation of principles of natural justice 3) Excess of jurisdiction 4) challenge to the vires of the statute or delegated legislation. d. The secured creditor may, in principle, enforce security outside the winding up, however, such enforcement is subject to the limited supervisory jurisdiction of the Company Court to ensure equitable treatment of all the creditors and compliance with injunctions issued by DRT. 35. In the light of the said principle, coming to the facts of the case on hand, as discussed supra, the undisputed facts in the present case are as follows:- i) 2 nd respondent has obtained loan from appellant bank and failed to repay the same. Therefore, appellant bank has filed OA No.302 of 2017 and obtained recovery certificate from DRT-II , Hyderabad for an amount of Rs.69,60,61,165.16 against the 2 nd respondent and its Directors including 1 st respondent herein and his wife. ii) 2 nd respondent was ordered to be wound up on 21.08.2018. iii) On 07.01.2019, a meeting was held with secured creditors of 2 nd respondent at the office of OL, Corporate Bhavan, 1 st floor, Bandlaguda (Nagole), Hayath Nagar, Ranga Reddy District, wherein Mr. C.P.Srivatsava, Assistant General Manager of the appellant bank participated. iv) 1 st respondent is an Ex-Director of 2 nd respondent. v) He and his wife stood as guarantors to the loan obtained by 2 nd respondent by mortgaging their personal assets. vi) He along with his wife has submitted OTS proposal to the appellant bank by way of sending e-mail offering to pay a sum of Rs.3 Crores towards full and final settlement to the extent of value of their personal assets. vii) He has also identified a buyer i.e. 3 rd respondent herein who is ready and willing to buy the property of the 2 nd respondent for an amount of Rs.32.39 Crores within 30 days of acceptance of the proposal by the appellant bank. According to 1 st Respondent herein, 3 rd Respondent has also obtained a Demand Draft for an amount of Rupees 10.00 Crores to pay it to the appellant bank. According to 1 st Respondent herein, 3 rd Respondent has also obtained a Demand Draft for an amount of Rupees 10.00 Crores to pay it to the appellant bank. viii) Vide letter dated 29.09.2023, the competent authority of the appellant bank approved the said OTS for an amount of Rs.29 Crores towards full and final settlement of running ledger of 2 nd respondent on certain conditions. ix) Vide letter undated, appellant bank informed 1 st respondent and his wife that the upfront OTS amount of Rs.0.10 Crores deposited in no lien account will be adjusted immediately upon sanction communication and borrower shall pay the balance OTS amount of Rs.2.9 Crores within sixty days from the date of communication of sanction to the borrower. x) Vide letter dated 27.03.2023, 1 st respondent has stated that he has identified one prospective buyer namely; Mr. Balakrishna Rao, Hyderabad, who deposited an amount of Rs.3 Crores with the appellant bank by way of D.D.Nos.531971, 531972, 531973, 531974, 531975, 531979 dated 16.03.2023 and 17.03.2023 respectively drawn on Kotak Mahindra Bank. xi) Vide letter dated 29.09.2023, the appellant bank, while approving the OTS submitted by the 1 st respondent, informed the 2 nd respondent that the OTS amount of Rs.2.90 Crores deposited in no lien account will be adjusted immediately upon sanction of communication. xii) Vide letters dated 30.10.2023, 01.12.2023, appellant bank informed the 1 st respondent that he failed to pay the balance OTS amount of Rs.26.10 Crores within the timelines committed by him and sanctioned by bank, his OTS sanction stands lapsed and the upfront amount paid by him stands forfeited. xiii) The Appellant Bank, vide letter dated 07.01.2019 expressed its intention to stand outside the winding-up proceedings in the creditors’ meeting held at the office of the Official Liquidator. xiv) The Appellant, thereafter issued a sale notice dated 27.12.2024 proposing to sell the secured Asset through public auction, which was scheduled on 10.01.2025. xv) The OL, by communication dated 07.01.2025 , objected to the auction attempt on the ground that leave of the Company Court had not been obtained and that bids ought not to be invited without such leave. xv) The OL, by communication dated 07.01.2025 , objected to the auction attempt on the ground that leave of the Company Court had not been obtained and that bids ought not to be invited without such leave. xvi) In response, the appellant bank sent a reply dated 27.01.2025, to the OL stating that upon obtaining legal opinion, its counsel had advised that no prior leave of the Company Court is required for sale of secured assets under the SARFAESI Act, 2002 and therefore it has decided to stand outside the winding-up proceedings. Appellant bank also placed reliance on the principle laid down in Pegasus Assets Reconstruction (supra) xvii) Appellant bank has issued notices under Section 13(2) and 13(4) of the SARFAESI Act, dated 26.03.2024 and possession notice dated 01.10.2024 and notice dated 11.10.2025 with regard to sale of secured asset. xviii) Appellant bank has conducted auction of the secured asset on 28.02.2025, pursuant to the E-auction notice dated 27.01.2025. xix) 5 th respondent stood as successful bidder by offering an amount of Rs.25.80 Crores and it has paid an amount of Rs.6.45 Crores, 25% of the bid amount including EMD. xx) Vide its letter dated 27.12.2024, appellant bank sought NOC from OL for recovery through SARFAESI /OTS/DRT. 36. As discussed supra, there is no need of appellant bank obtaining leave from the company court to conduct auction of secured asset. At the same time, appellant bank shall put the OL on notice right from obtaining valuation of the secured asset. The OL, as a representative of the borrower company under winding up proceedings, has to be associated not for supplying any omission in the SARFAESI Act, but because of express provisions therein as well as in the Rules. 37. In the light of the same, it is to be noted that the appellant bank has obtained valuation reports dated 29.11.2022 from ER K.Vamshikrishna Reddy, panel valuer, for an amount of Rs. 644.34 Lakhs in respect of 1239.13 sq.yards in Sy.No.311 and 317 of Quthbullapur Mandal, Medchal Malkajgiri District and dated 15.02.2023 from Varasiddi Vinayaka Associates, a bank panel valuer for an amount of Rs.10,53,24,000/- in respect of 1239.13 sq.yards, situated in Sy.No.311 and 317 of Bahadurpalli Village, Medchal Malkajgiri District. 644.34 Lakhs in respect of 1239.13 sq.yards in Sy.No.311 and 317 of Quthbullapur Mandal, Medchal Malkajgiri District and dated 15.02.2023 from Varasiddi Vinayaka Associates, a bank panel valuer for an amount of Rs.10,53,24,000/- in respect of 1239.13 sq.yards, situated in Sy.No.311 and 317 of Bahadurpalli Village, Medchal Malkajgiri District. Further, the appellant bank has obtained Valuation Report dated 19.01.2024 from SRA Consultants where the Market value of the property is mentioned as Rs, 24,75,55,000/- and realizable sale value is 21,04,21,000/-. It has also obtained valuation report from Navaniraman Associates dated 22.01.2024 wherein the fair market value is mentioned as 23,51,00,000/-. The bank, vide letter dated 14.02.2025, has furnished the copies of the aforesaid valuation reports to the OL. The above valuations are without association of the OL. 38. It is apt to note that appellant bank did not put the OL on notice while obtaining the said valuation reports. It has also not informed the said fact to the OL and furnish copies of the said valuation reports. 39. It is also relevant to note that the appellant bank did not serve copy of demand notice issued by it under Section 13(2) of SARFAESI Act upon 2 nd Respondent. In the said notice, appellant bank has mentioned company address i.e. Plot No.40, in Sy.No.315, 317, 318, 319 and 336 Phase-1, TSIIC – IALA, Pashamylaram Village, Patancheru Mandal, Sanga Reddy District. Appellant Bank did not even serve possession notice dated 01.10.2024 on the OL. 40. It is mandatory to serve notices issued under the SARFAESI Act and Rules on the OL as held by Apex Court in Mathew Varghese (Supra). Without serving the said notices, appellant bank cannot contend that 1 st respondent / OL has to avail alternative remedy available under SARFEASI Act. It is also apt to note that appellant bank has not even serve e-auction notice dated 27.01.2025 on the OL. 41. Thus, the appellant bank conducted auction without involving the OL and without serving valuation reports, statutory notices under SARFAESI and without putting OL on notice. It has obtained valuation reports behind the back of OL and did not serve copies of the same on 2 nd respondent. Thus, the appellant bank has conducted the auction behind the back of the OL. 42. It has obtained valuation reports behind the back of OL and did not serve copies of the same on 2 nd respondent. Thus, the appellant bank has conducted the auction behind the back of the OL. 42. It is also apt to note that it is stated by the 1 st respondent that he and his wife have paid an amount of Rs.3 Crores towards upfront price of OTS to the appellant bank. The said fact is also admitted by the appellant bank in the aforesaid letters. 43. It is the specific contention of the 1 st respondent that he has identified 3 rd respondent – buyer and it has offered an amount of Rs.32.29 Crores, and enclosed a Demand Draft for an amount of Rs.10 Crores. 44. The appellant bank has fixed reserve price of the secured asset as Rs.21,18,00,000/- which according to the OL is very lower side compared to valuation price of Rs.25.02 Crores (for land, buildings plant & machinery etc.). Thus, the appellant bank fixed the reserve price behind the back of OL, and sold the secured asset to 5 th respondent for an amount of Rs.25.80 Crores. 5 th respondent has paid an amount of Rs.6.45 Crores. 45. It is also apt to note that on 28.02.2025 in C.A.No.70 of 2025 in C.P.No.170 of 2012 and batch, learned Company Court Judge, directed the appellant bank not to finalize the sale pursuant to the auction held on 28.02.2025 and it was extended until further orders on 03.03.2025. In view of the same, 5 th respondent could not pay the balance sale consideration in terms of the auction notice to the appellant bank. It is seeking return of the 25% of the amount and EMD paid by it on the ground that the appellant bank suppressed about the pendency of the C.A.No.70 of 2025 filed by 1 st respondent herein and the interim order granted by this Court. 46. It is apt to note that appellant bank has conducted auction on 28.02.2025 pursuant to the auction notice dated 27.01.2025 and 5 th respondent, being the successful bidder, has paid an amount of Rs.6,45,00,000/-. Learned Company Court Judge, vide order dated 28.02.2025, directed the appellant bank not to finalize the same pursuant to the auction held on 28.02.2025 till the next date of hearing and the same was extended on 03.03.2025 until further orders. 47. Learned Company Court Judge, vide order dated 28.02.2025, directed the appellant bank not to finalize the same pursuant to the auction held on 28.02.2025 till the next date of hearing and the same was extended on 03.03.2025 until further orders. 47. It is apt to note that the said orders were passed on hearing learned counsel appeared for appellant bank. Thus, the appellant bank is aware of the aforesaid order dated 28.02.2025 and even then, did not inform the said fact to the 5 th respondent, successful bidder. On the other hand, it has received an amount of Rs.6.45 Crores on 01.03.2025 including EMD amount of Rs.2,11,80,000/- submitted by 5 th respondent on 28.02.2025. 48. Thus, the entire action of the appellant bank in conducting auction is in violation of the procedure laid down under the Act, 1956 and SARFAESI Act, and also the principle laid down in the aforesaid judgments. At the cost of repetition, it is apt to note that the appellant bank though obligated to put the OL on notice right from the obtaining the valuation report to auction and receipt of sale consideration from the successful bidder, did not put the OL on notice. Therefore, the auction conducted by the appellant bank shall be set aside. 49. OL, being statutory custodian and representative of the liquidation estate, any sale or transfer of the company’s assets cannot be carried out without due notice to him and he has to disburse dues of workmen and secured creditors, who enjoy as pari passu charge under Section 529-A of the Act, 1956. Transparency is essential to safeguard the rights of stake holders and to ensure that the liquidation estate is not alienated without knowledge of its lawful custodian. 50. It is contended by learned senior counsel appearing for the appellant bank that the appellant bank has sent a mail on 04.03.2025 informing 5 th Respondent that argument in the above company application has been completed by the parties before this Court on 03.03.2025 and after pronouncement of the order, the bank will inform 5 th respondent accordingly. In its reply dated 13.03.2025, 5 th respondent expressed its readiness and willingness to pay the balance sale consideration. Therefore, it is aware of the pendency of the aforesaid application and interim order granted by this Court. In its reply dated 13.03.2025, 5 th respondent expressed its readiness and willingness to pay the balance sale consideration. Therefore, it is aware of the pendency of the aforesaid application and interim order granted by this Court. The said contention of the appellant bank cannot be accepted since there is suppression of interim order dated 28.02.2025 and 03.03.2025 on the part of the appellant bank and suppressing the said orders, it has received an amount of Rs.6.45 Crores from the 5 th respondent. Therefore, the appellant bank has to return/refund the said amount to the 5 th respondent. 51. In Delhi Development Authority (supra), the Apex court held that e-auction notice and sale held by the DRT were invalid for non-disclosure of statutory dues of Delhi Development Authority and also failed to comply with the provisions of the Income Tax Act. The Bank failed to disclose encumbrances of property in auction notice invalidates sale. The Court set aside the auction and sale confirmation and directed refund with an interest of 9 % to the auction purchaser. The Auction Purchaser entered the auction in good faith, placed its bid and deposited its hard earned money in the belief that the law clothed the auction with legitimacy. The Auction Purchaser neither breached the covenant nor failed in diligence and did not seek to profit from the illegality. The restitution therefore becomes not merely a legal device but a moral imperative. The jurisdiction to make restitution is inherent in every Court and will be exercised wherever the justice of the case demands. 52. The Divisional Bench of Calcutta High Court in Deepak Kumar Agarwal (Supra) observed that the writ petitioner, a successful auction purchaser, had paid the entire sale consideration, but possession could not be handed over due to an interim order of the Debt Recovery Tribunal. The learned Single Judge directed refund of the entire consideration with simple interest, noting that the bank retained the petitioner’s money despite the subsisting stay and the writ petitioner was put to prejudice on account of the order of stay. Finding no arbitrariness in the exercise of discretion, the Division Bench upheld the order and directed refund along with interest of 4% within 15 days. 53. Finding no arbitrariness in the exercise of discretion, the Division Bench upheld the order and directed refund along with interest of 4% within 15 days. 53. A Division Bench of this Court in K. Indra Mohan (Supra) held that the Bank failed to disclose restraint orders passed by the High Court while demanding payment of the balance amount. The failure on the part of the Bank to make full disclosure of the Court order to the petitioner assumes importance since the Bank proceeded to demand the balance 75% consideration price from the petitioner despite its obligation to keep the petitioner informed of the restraint order. The Bank, being under an unequivocal restraint from confirming the sale, cannot invoke Rule 9 (5) of the 2002 Rules, the Court directed refund of Rs. 2,16,25,000/- within four weeks. 54. On consideration of the said aspects only, vide impugned order date 28.03.2025, learned Company Court Judge allowed the C.A.No.70 of 2025 in CP No.170 of 2012 and batch setting aside the auction dated 28.02.2025 conducted by the appellant bank. However, liberty was granted to the appellant bank to proceed with the liquidation process, by involving the OL in valuation and the sale as observed vide order dated 01.08.2019 passed in C.A.No.624 of 2018 in C.P.No.39 of 2016 and 60 of 2013 by another Company Court Judge of this Court. 55. As rightly held by the learned Company Court Judge the Company application filed by the 1 st Respondent, Ex-Director of 2 nd Respondent is maintainable. Since the appellant bank conducted auction of the secured asset in gross violations of principles laid down by the Act 1956, SARFAESI Act, and Rules framed thereunder and the principle laid down by the by the Apex Court in Pegasus (supra) and also this Court by order dated 1.08.2019 in C.A No. 624 of 2018 in CP No. 39 of 2016 and 60 of 2013 and it will definitely affect the rights of secured creditors including workmen and will negatively impact the liquidation process. 56. 1 st Respondent, being Ex-Director, has legitimate interest in challenging the impugned action of the appellant bank in conducting auction since he has submitted OTS proposal, paid an amount of Rs.03 Crores, and also identified 3 rd respondent buyer which offered to purchase the secured asset for an amount of Rs.32.39 Crores and obtained a demand draft for Rs.10 Crores. 1 st Respondent, being Ex-Director, has legitimate interest in challenging the impugned action of the appellant bank in conducting auction since he has submitted OTS proposal, paid an amount of Rs.03 Crores, and also identified 3 rd respondent buyer which offered to purchase the secured asset for an amount of Rs.32.39 Crores and obtained a demand draft for Rs.10 Crores. Therefore, 1 st respondent can be treated as an informant as held by the Madras High Court in Jayanthi Rama Chandra (Supra). Therefore, despite availability of alternative remedy, the aforesaid company application filed by 1 st respondent is maintainable. 57. The impugned order is a reasoned order and well founded. Appellant bank herein failed to make out any case to interfere with the said order. Thus, this appeal is liable to be dismissed and is dismissed 58. The appellant bank shall refund an amount of Rs.6.45 Crores to the 5 th respondent along with 6% interest per annum from the date of receipt of this order till payment. As a sequel thereto, miscellaneous applications, if any, pending in this appeal shall stand closed.