Commercial insolvency and asset risk justified appointment of a provisional liquidator pending final winding-up proceedings.

The company's prolonged cessation of business, absence of proper accounts and balance-sheets, unpaid statutory and operational liabilities, and the unavailability of responsible officers indicated prima facie commercial insolvency. The court also found special circumstances requiring immediate protective action because the company's assets were exposed to theft, deterioration, and neglect, while the reply did not effectively meet the material allegations. On that basis, the court held that there was a continuing stalemate in the company's management and affairs and that appointment of a provisional liquidator was necessary pending final disposal of the winding-up petition.

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Issues: Whether the company had become commercially insolvent and whether special circumstances existed warranting appointment of a provisional liquidator pending final disposal of the winding-up petition.

Analysis: The company had ceased functioning for a prolonged period, no proper accounts were maintained, no balance-sheet had been prepared for years, statutory and operational liabilities remained unpaid, and the responsible officers were not effectively available. The materials showed a serious risk to the company's assets through theft, deterioration, and neglect, while the company's reply did not effectively answer the material allegations. In these circumstances, the court found prima facie insolvency and a continuing stalemate in the management and affairs of the company, making immediate protective intervention necessary under the court's power to appoint a provisional liquidator.

Conclusion: The request for appointment of a provisional liquidator was justified, and the official liquidator was appointed as provisional liquidator.

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