Rigby J:

This was a petition brought under s. 166 of the Companies Ordinance by Harrisons & Crosfield (Malaya) Ltd. (hereinafter referred to as the "Petitioners"), as creditors, for the compulsory winding-up by the Court of M/s. Ban Hong Co. Ltd. (hereinafter referred to as the "Company") on the grounds that the said Ban Hong Co. Ltd. was indebted to the petitioners to the extent of $89,673.75, that the petitioners had demanded payment, that the company had failed to pay, and that it was insolvent and unable to pay its debts.

I was fully satisfied that each and every one of those contentions was well founded and I accordingly made the Order sought.

The petitioners are, inter alia, rubber exporters; they have a licence to export rubber, but have no licence to smoke and pack rubber. They are accordingly compelled to purchase their rubber for export from other licensed dealers or producers or other licensed exporters.

The company was licensed to carry on the business of rubber packers and dealers.

In or about February 1954, the petitioners, in furtherance of their business as rubber exporters and with the object of securing further stocks of rubber for export, entered into an arrangement with the company whereby they made cash advances to the company against stocks of wet, unprocessed rubber acquired by the company and brought on to the company's premises at Gopeng. These premises consisted of a godown and nine smokehouses. Thereafter, unprocessed rubber was smoked, sorted, correctly graded and packed by the company's employees, in accordance with the terms of its licences, and delivered to the petitioners at their godown it Permatang Pauh, and later Prai. It is abundantly clear that the final price was not to be paid before delivery of the packed and graded bales of rubber at the petitioner's godown, and even then such final price was subject to adjustment depending upon any claims by the overseas consignees is to incorrect quality and or weight. This was obviously a responsibility of the company since it was the company which did the packing and weighing. The advances made to the company against the unprocessed rubber it brought from time to time on to its premises were, of course, to enable it to do further business and purchase further supplies of unprocessed rubber for processing and delivering to the petitioners to the mutual advantage of both parties. The practice was that as often as there appeared to be a further supply of 10 tones of unprocessed rubber upon the company's premises then the company would apply to the petitioners for a further advance. Daily Stock Statements of the unprocessed rubber on their premises were made and kept by the company and a duplicate copy thereof supplied to the petitioners. After checking the Daily Stock Statements and visually inspecting the unprocessed rubber on the company's premises the petitioners' representative, if satisfied that there appeared to be a further 10 tons of unprocessed rubber on the premises, would authorize a further advance. For the purpose of authorizing such an advance the representative would very largely rely upon the Daily Stock Statements prepared by the company and produced before him, and it would appear that the visual inspection was, to say the least of it, of a somewhat cursory nature. The authorization for such an advance was embodied in the form of a document entitled "Contract For Sale And Purchase - Provisional Advance Against Contract." Specimen copies of such a document are attached to the affidavits of both Mr. Forrester, the petitioners' Penang Manager, and Mr. Chew Chye Leng, the Managing Director of the company. When the rubber had been processed, packed and marked by the company with the particular grade they guaranteed it to be it was delivered in bales to the petitioners' godown. When a sufficient quantity of a particular grade had accumulated at the petitioners' godown, the company would notify the petitioners that such rubber w