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Issues: Application for appointment of provisional liquidator under section 175 of the Act for a company facing insolvency and financial distress.
Analysis: The judgment pertains to an application for the appointment of a provisional liquidator for a company, Andhra Paper Mills Ltd., under section 175 of the Act. The company, established in 1929, is facing financial difficulties, with a deficit of Rs. 20 lakhs as per the proposed balance sheet for the year ending 31st March, 1947. The company has not paid dividends on its shares and has outstanding debts, including debentures of Rs. 11 lakhs with interest. The mills were closed in May 1947, and the trustees of the first debenture holders took over control due to non-payment of interest. The petitioner, a creditor, seeks the appointment of a provisional liquidator to secure the company's assets, valued at over 11 lakhs of rupees. There have been conflicts with employees, leading to safety concerns for the company's assets. The company and the trustees of the debenture holders do not oppose the appointment, except for one shareholder. The court finds it appropriate to appoint a provisional liquidator, considering the company's insolvency and the support for the appointment. The appointed provisional liquidator is Mr. R.G.N. Price, a Chartered Accountant, to oversee the company's assets in Rajahmundry, in collaboration with the trustees of the debenture holders. Mr. Price is required to provide security and will have specific powers under section 179 of the Act, except for certain clauses. The costs of the application will be included in the main petition's costs. In conclusion, the judgment addresses the financial distress and insolvency of the Andhra Paper Mills Ltd., leading to the application for a provisional liquidator. The court's decision to appoint Mr. R.G.N. Price as the provisional liquidator aims to safeguard the company's assets and manage the ongoing financial challenges effectively. The appointment is made in consideration of the company's financial status, the support for the appointment from relevant parties, and the necessity to protect the interests of all stakeholders involved.
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