Settlement of dues and changed circumstances led to recall of provisional liquidation and restoration of company possession.

Subsequent settlement of secured, statutory and other dues justified recall of the earlier order appointing the Provisional Liquidator and commencing winding-up proceedings. The HC treated the Board for Industrial and Financial Reconstruction's recommendation as non-binding and assessed the matter on the present circumstances, including the absence of continuing prejudice to creditors, workmen or the public interest. As the liabilities had been substantially settled and no useful purpose remained in remitting the matter for reconsideration, the application was allowed and possession of the company was ordered to be restored to its authorised representative after compliance with legal formalities.

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Issues: Whether, in view of the subsequent settlement of secured, statutory and other dues and the changed circumstances, the earlier order appointing the Provisional Liquidator and commencing winding-up proceedings should be recalled and possession of the company restored to its authorised representative.

Analysis: The application was examined in the context of the recommendations made by the Board for Industrial and Financial Reconstruction and the subsequent developments after the company was placed under provisional liquidation. The outstanding dues of the secured creditors and the statutory liabilities were shown to have been substantially settled, and the Court found no justification to remit the matter back for reconsideration when the developments had already come before it. The Court held that the Board's recommendation was not binding and that the final decision had to be taken on the basis of the present circumstances, including the absence of continuing prejudice to creditors, workmen, or the public interest.

Conclusion: The earlier order was recalled and the application was allowed. The Official Liquidator was directed to hand over possession of the company to its authorised representative after compliance with the formalities under law.

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