Affidavit evidence is sufficient to support a winding up order under the Companies Act, 1956, and oral evidence is not mandatory in winding up proceedings.

( 1 ) THIS is an appeal against the order of winding up of Vijayalakshmi Talkies (private) Ltd. , (hereinafter called the Company) made in Company Petition No. 3 of 1963 by our learned brother, Satyanarayana Raju, J. as he then was. This Company was incorporated in May 1960 as a private Company limited by shares, its registered office being located at Masulipatnam. It started its business on august 1, 1962 with a nominal capital as Rs 1,60,000/-divied into 16 equity shares of Rs. 10,000/-each. The total number of its shareholders did not exceed 11 The affairs of the Company did not run smoothly owing to group politics and sharp differences between the shareholders. The Company s liabilities as a result erelcng rose by leaps and bounds. The petitioner, one of the shareholders owning one share of Rs. 10,000/-, in despair, made the application for winding, up. The grounds on which it is based as shown in the petition and vouched for in the affidavit are that the Company is heavily indebted and is unable to pay to the various credirors the debts due which are to the tune of Rs. 2,00,000/- and that the interest on such borrowings itself comes to nearly Rs. 24, 000/- per year.

( 2 ) BESIDES, there are sharp dissensions between the shareholders of the Company regarding the management of the business and the affairs of the Company. These disputes have assumed enormous dimensions. On account of the dominating influence of the Managing-Director and the other shareholders belonging to this group, the business of the Company could not run smoothly and this has affected the efficient management of the business of the Company. The result is that the Company has no assets except the site, the theatre and cine equipment and it is unable to pay the debts. The petition as filed was under S. 439 of the companies Act read with Rules 95 and 21 (Part III) of the Companies (Court) rules 1959. It was advertised as per rules. All persons were put on notice thereby so that he who seeks to intervene by his own petition at the hearing may send notice of his intention in accordance with law. In respon se thereto, none of the present Directors of the Company eo nomine made any application either supporting or opposing the petition. One creditor, however, Subbarao by name, sent a notice to the counsel for the petitioner that a debt is due to him and he supported the petition. Similarly one Ganapathi Rao, creditor gave notice of his debt and entered appearance, Soeswara Rao and Seshavataram are the other persons who followed suit and entered their appearance through their respective counsel supporting the petition for winding up. The Company and the Managing Director, who were the only party-respondents to the petition, were represented by a common counsel. Both filed counters on 5-4-1963 denying the allegations in the petition and filed affidavit in support thereof. After several adjournments the matter came on 9-8-1963 when one of the shareholders offered to pay a sum of Rs. 40,000/-to the petitioner and his supporters. Joint. memo in relation to the same was filed by Mr. K. Ramachandra Rao, counsel for the petitioner and Mr. Ananta Babu, counsel for the respondent, which provided inter alia that if the amount of Rs. 40,000/-with interest at 9% together with a sum of Rs. 2000/- towards costs was paid before 15-9-1963 the petitioner would withdraw the petition. When the matter thereafter came up for hearing it was represented that the amount agreed upon was not paid. The joint memo consequently could not be ordered. It was also represented by the learned counsel for the respondents (i. e.) the. Company and the Managing Director, that the Company by its Resolution had decided to withdraw the defence and consent to the appointment of the Liquidator and that the Company therefore would no longer contest the petition and withdraw its defence. Thus, the contesting respondents having thus withdrawn their defence, our learned brother found no occasio