Valid extraordinary resolution is required for voluntary liquidation before any public examination can be ordered under company law.

The power to order a public examination under Section 196 of the Companies Act arose only where the company was already in liquidation. A voluntary winding up required a valid extraordinary resolution stating that the company could not continue business because of its liabilities and that winding up was advisable, with prior notice of the intention to move such a resolution. As the notice and meeting procedure did not satisfy these requirements, the company had not validly entered voluntary liquidation under Section 203(3). The court therefore had no power to direct the respondent's public examination.

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Issues: Whether the company had been placed in voluntary liquidation by a valid extraordinary resolution so as to empower the Court to order the respondent to be publicly examined under Section 196 of the Companies Act.

Analysis: The statutory power to direct a public examination under Section 196 was available only if the company was in liquidation. A voluntary winding up under Section 203(3) required an extraordinary resolution that the company could not, by reason of its liabilities, continue its business and that it was advisable to wind up. An extraordinary resolution under Section 81(1) also required prior notice specifying the intention to propose such a resolution. The notice and meeting proceedings did not satisfy these requirements, and the company had not validly passed the resolution contemplated by Section 203(3).

Conclusion: The company was not in voluntary liquidation in accordance with the Act, and the Court had no power to order the respondent's examination under Section 196.

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