Provisional Liquidator powers remain intact absent mala fides, misuse, or material grounds for judicial restriction

Section 450(3) of the Companies Act, 1956 gives a Provisional Liquidator the same powers as a liquidator unless the Court limits those powers by order. The applicants failed to show mala fides, misuse of power, misappropriation, or any material basis to recall the appointment or curtail authority. Actions taken by the Provisional Liquidator under Court supervision were found lawful and directed to protecting the company's assets and creditors' interests. Mere hardship to small depositors was held insufficient to justify interference under section 466, and the request to recall, stay, or restrict the appointment was rejected.

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Issues: Whether the order appointing a Provisional Liquidator in the winding-up proceedings should be recalled or stayed, and whether his powers should be limited or restricted under the Companies Act, 1956.

Analysis: Section 450(3) of the Companies Act, 1956 provides that a Provisional Liquidator has the same powers as a Liquidator unless the Court limits or restricts those powers by the appointing order or by a subsequent order. The applicants did not show any mala fides, misuse of power, misappropriation, or any material justifying recall of the appointment or curtailment of powers. The Provisional Liquidator had already taken steps under the supervision of the Court to protect and deal with the company's assets, and those actions were found to be in accordance with law and in the interest of the company and its creditors. Mere hardship to small depositors was held insufficient to warrant interference under section 466.

Conclusion: The request to recall or stay the appointment of the Provisional Liquidator and to limit or restrict his powers was rejected.

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