The Chief Justice.-This is an appeal against the order of Panchapagesa Sastry, J., made in chambers in the winding up of the Andhra Paper Mills Co., Ltd. (in liquidation). The material facts necessary for the disposal of this appeal are as follows:

The company was incorporated under the Indian Companies Act in January, 1929, with an authorised capital of Rs.23,00,000 but with a paid up capital of about Rs.12,00,000. The company appears to have been under-capitalised, and it became necessary to borrow by way of debentures, first in 1935 a sum of Rs.6,00,000 and again in 1938 a sum of Rs.5,00,000. The debentures were secured by two deeds dated 20th September, 1935, and 19th September, 1938. Under these debenture trust deeds, practically the entire premises of the Mills and all the machinery, plants, fittings, etc., attached to the Mills were mortgaged, to secure payment of the amounts due to the debenture holders. There were other provisions in the debenture deed which conferred rights on the debenture holders and the trustees for the debenture holders to take possession of the Mills on default of payment of interest and to work the Mills, if they chose, or to bring the mortgaged prem

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