Provisional liquidator relief refused where winding-up application lacked bona fides and evidence showed only temporary financial distress.

An application for appointment of a provisional liquidator under section 450 of the Companies Act, 1956 was found not bona fide and equitable interim relief was refused. The Court did not decide the objection that such appointment was available only after admission of the winding-up petition, and noted that the petition had not yet been advertised, so the rule against multiple winding-up proceedings was not engaged. On the merits, the company was said to have faced only temporary financial distress, had settled with most creditors, and had already paid the first instalment under that arrangement. The material relied on did not justify the drastic relief sought and suggested pressure for immediate full payment.

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Issues: Whether the application for appointment of a provisional liquidator under section 450 of the Companies Act, 1956 was maintainable and bona fide on the facts, and whether equitable considerations justified refusal of interim relief.

Analysis: The Court considered the objection that a provisional liquidator could be appointed only after admission of the winding-up petition, but did not decide that question. It further noted that the petition had not been advertised and that the principle against multiple winding-up proceedings had not yet become applicable. On the merits, the Court found that the company had passed through only a temporary financial distress, had secured arrangements with the large majority of its creditors, and had already paid the first instalment under that arrangement. The Court also held that the material relied on by the petitioner, including the extracted letter, did not show a genuine basis for the drastic relief sought and indicated that the application was being used as pressure to obtain immediate full payment rather than instalments.

Conclusion: The application was not bona fide, equitable relief by appointment of a provisional liquidator was unwarranted, and the petition was dismissed.

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