The Industrial Trust Fund, H. E. H. the Nizams Government, was not a corporation but a department of the Government, and the claim by the State of Andhra Pradesh was governed by Article 149 of the First Schedule to the Indian Limitation Act 1908 and was not barred by limitation.

( 1 ) THIS is an appeal by one Devi Dayal Marwah against the order of our learned brother, Satyanarayana Raju, J. in O. P. 4 of 1959 directing the winding up of the Deccan Porcelain and Potteries Ltd. , Saifabad, Hyderabad. The Original Petition was filed by the State of Andhra Pradesh represented by the Secretary to Government, Industries (Industrial Fund) Department, Hyderabad under Section 439 of the Indian Companies Act (I of 1956) praying that in the circumstances stated in the affidavit filed therewith the High Court may be pleased to wind up the said company by order of the Court.

( 2 ) THE company was incorporated under the Hyderabad Companies Act (IV of 1320 F) in the Fasli year 1352 with its registered office at Saifabad in Hyderabad. It had a nominal capital of Rs. 10 lakhs O. S. (Rs. 8,57,142-13-9 I. G.) divided into 40,000 ordinary shares of Rs. 25 O. S. each. The paid up capital was Rs. 4,47,734-12-0 O. S. (Rs. 3,83,772-10-4 I. G. ). The Company was constituted for the purpose of acquiring the business of the Hyderabad Potteries and to carry on the business of manufacturers, buyers and dealers in all kinds of clay work, chemical preparations and glazes whatsoever and obtain patents for them to carry out the other objects as set forth in the memorandum of association. On the 1/10/1947, the Company executed a deed of mortgage in favour of the Industrial Trust Fund, H. E. H. the Nizams Government (Industrial Department, Government of Andhra Pradesh, now) for O. S. Rs. 2,50,000 (Rs. 2,14,285/- I. G.) for purchase of machinery tools and construction of furnace, buildings etc. , agreeing to repay the amount with interest at 3 1/2 % per annum. Under the deed of mortgage, the Company agreed to repay the loan in instalments of Rs. 8,000. 00per month commencing from 1/10/1950. On 19/09/1949, the Company took a further loan of O. S. Rs. 13,000. 00 from the Industrial Trust Fund and executed a promissory note agreeing to repay the said amount with interest at 4% per annum. This promissory note was renewed by the Company on 6/12/1952, and on the same date, the Company executed a further promissory note in favour of the Government for O. S. Rs. 1,655-8-0 the same being the amount of interest that had accrued on the promissory note of the 1 9/09/1949.

( 3 ) AS stated above, the petition was filed by the State of Andhra Pradesh represented by the Secretary to Government Industries (Industrial Fund) Department, Hyderabad. It is averred by the petitioners that the total amount due by the Company under the deed of mortgage and the promissory notes, including the interest that accrued thereon and the amount paid by the Government towards the insurance premia is Rs. 3,10,351-38 (I. G.) and that the petitioners made demands on the Company for repayment of the amount due to them. They also sent a registered notice through their advocate on 11/05/1958, demanding repayment of the amounts due. This notice was refused by the Company. It is further alleged that the Company has ceased to function since 1949 consequent upon its managing agents migrating to Pakistan.

( 4 ) THE winding up of the Company was sought on the following grounds: 1. That the company has neglected to pay the amount due to the petitioners in spite of repeated demands: 2. That the company ceased to function since 1949; and 3. that the assets of the company are insufficient to meet its liabilities.

( 5 ) THE appellant in this appeal is one Devi Dayal Marwah, a lessee of the Company. He filed a counter opposing the petition for winding up. He claimed that the Company leased out in his favour the entire factory buildings etc. , of the Company for a period of 15 years under a registered deed dated 8/09/1955 on a yearly rent of Rs. 10,000. 00 till the end of the 5th year of the lease and thereafter at Rs. 10,000. 00 annually or 25% of the gross profits, whichever is higher. It is claimed by him that pursuant to the said lease, he spent so far a sum of Rs. 1,23,000.