Before appointing a provisional liquidator under section 450 of the Companies Act, the court must be satisfied that circumstances warrant such an appointment and must provide a speaking order that considers the specific reasons and circumstances.

1. This judgment shall govern these two appeals which have arisen from the order of the learned Single Judge in Company Petition Nos. 232 of 1998 and 186 of 1997 whereby the learned Single Judge has made an order appointing the Official Liquidator, High Court, Chennai as the Provisional Liquidator directing him to take charge of the assets of the respondents Company.

2. The Court heard the learned counsel on either side and looked into the materials available, in particular, the orders under challenge.

3. Admittedly, those two Company Petition Nos. 232 of 1998 and 186 of 1997 were filed seeking winding up of the respondent company and for appointment of Official Liquidator under the provisions of the Companies Act.

4. In those two company petitions, the learned single Judge made an order, ordering for publication since it found that there was a prima facie case for liquidation. As against the said order dated 210. 2002, the two appeals were preferred in O.S.A.No.397 of 2002 and O.S.A.No.440 of 2002. The Division Bench of this Court by elaborate order dated 8. 2008 found that there was a prima facie case made out and it was a fit case for ordering for publication, hence, confirmed the order. Not satisfied with the same, the debtor company took it on appeal before the Apex Court on Special Leave Petitions. Insofar as the Company Petition No.232/1998 is concerned and the appeal therefrom, the Apex Court made an order of dismissal. Insofar as the other Company Petition No.233 of 1998 is concerned, though the Apex Court took a view that it was not a fit case where the Apex Court could interfere in exercise of jurisdiction and made an order of dismissal, however, it was observed that, it was made clear that Winding Up Petition pending before the High Court should be decided on its own merits uninfluenced by any observations made by the High Court in its order dated 29. 2007 or the dismissal of the Special Leave Petition by the Apex Court. After passing of those orders, the matters, both the Company Petitions came up before the learned Single Judge and the learned Single Judge in exercise of powers under section 450 of the Company Act made an order appointing the Official Liquidator, High Court, Madras as the Provisional Liquidator. Aggrieved over that part of the order, these two appeals have arisen.

5. Advancing the arguments on behalf of the appellants, the learned Senior Counsel Mr. P.S. Raman, would submit that originally, the order that was passed by the learned single Judge in the Company Petition as to the publication was challenged before this Court before the Division Bench and also before the Apex Court and both the appeals were dismissed. Under such circumstances, it would not mean that the Company Court can directly exercise its power under section 456 of the Companies Act and appoint the provisional liquidator to take up the assets of the Company. The matter is pending from the year 1998. The Company has been running and apart from that, it has shifted its business to the business of solar energy and it originally had number of debtors, out of whom, all have been settled except these two respondents. Under such circumstances, there is no need for appointment of the provisional liquidator and even the order does not speak about any reason whether the circumstances prevail for appointment of official liquidator immediately. The learned counsel in support of his contention that relied on the decision reported in (1948) XVIII Company Cases 8 (Andhra Paper Mills Company Limited., Inre). Under such circumstances, the orders have got to be set aside.

6. Contrary to the above contentions, the learned counsel for the respondents in their sincere attempt to sustain the orders of the learned single Judge would submit that, in the instant case, when the Company Petitions were filed and the publication were also effected, the Company Court considering the reasons found that there was a prima facie case made out for publicati