Judgment :- 1. This is an appeal by the Malabar Iron & Steel works Ltd., from an order winding up the company pursuant to an application moved by the Registrar of Companies under S.433 of the Companies Act, 1956. The ground relied on by the Registrar for seeking the winding up is what is contained in S.433(c): "If the company does not commence its business within a year from its incorporation, or suspends its business for a whole year." This petition was once allowed by Justice Raman Nayar by his order dated 9th of November, 1962. That order disposed of the petition for winding up which was numbered as Company Petition No. 8 of 1962 as well as an Original Petition No. 1002 of 1962. The Original Petition was for compelling the Registrar of Companies to issue a certificate under sub-section (3) of S.149 of the Companies Act, 1956. 2. The learned judge held that the company having once issued a prospectus it was governed by S.149 (1) of the Companies Act and the minimum subscription having not been subscribed the company was debarred from commencing business and that there was no prospect of the company commencing business in future. So the Original Petition 1002 of 1962 was dismissed and the Company Petition No. 8 of 1962 for winding up was allowed. 3. There were separate appeals before the Division Bench. Writ Appeal No. 44 of 1963 against the dismissal of O.P. No. 1002 of 1962 and A.S. No. 634 of 1962 from the order winding up the company. The Division Bench confirmed the dismissal of the Original Petition and held that the company was governed by S.149(1) of the Companies Act, 1956. This aspect has thus now become final. 4. In A.S. No. 634 of 1962 the Division Bench observed: "Counsel for the appellant submitted - apparently on the instructions of his client who was present in Court - that the company has already secured the minimum subscription, that it is in a position to comply with the provisions of S.149 (1) and commence its business, and prayed for an opportunity for his client to file an affidavit stating these facts as well as the particular reasons for not commencing business within a year of incorporation. We feel that this prayer should be granted. 11. The appellant will file the affidavit on or before the 25th May 1963. We feel that this prayer should be granted. 11. The appellant will file the affidavit on or before the 25th May 1963. If the affidavit is filed within that time, this appeal will be posted for further hearing on the 27th May 1963. If no affidavit is filed within the time specified, this appeal will stand dismissed;..." An affidavit was filed as undertaken and so the order under appeal was set aside and the case was sent back. 5. After taking evidence and examining the promoter-Director, the Company Court has again passed an order winding up the Company. It is this order that is challenged in this appeal. 6. The order has elaborately dealt with the question involved and we are in general agreement with what is stated therein. The only question that remained for consideration after remand was whether the conditions provided by clauses (a) and (d) of sub-section (1) of S.149 have been satisfied. These clauses are in these terms: "149. Restrictions on commencement of business. Where a company having a share capital has issued a prospectus inviting the public to subscribe for its shares, the company shall not commence any business or exercise any borrowing powers, unless (a) shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription; (b) ……… (c) ………. (d) there has been filed with the Registrar a duly verified declaration by one of the directors or the secretary, in the prescribed form, that clauses (a), (b) and (c) of this sub-section, have been complied with." 7. Assuming that all what is stated in the several affidavits that have been filed on behalf of the company and in the deposition of the promoter-Director are correct, we are still of the view that the provisions in clauses (a) and (d) of subsection (1) of S.149 have not been satisfied. 8. Sub-clause (a) of sub-section (1) of S.149 insists that shares to an amount not less in the whole than the minimum subscription should be allotted and be held subject to the payment of the whole amount thereof in cash. The direction in the section that the whole amount should be paid in cash is imperative. Even the rule in Spargo's case (1873) 8 Ch. 407) can apply only when two conditions are satisfied. The direction in the section that the whole amount should be paid in cash is imperative. Even the rule in Spargo's case (1873) 8 Ch. 407) can apply only when two conditions are satisfied. The first is that there must be a debt due and presently payable by the company and the second that there must be payment for the shares by set off of the debt. In regard to the first of these, the learned judge has observed: "It seems to me that the first condition can never be satisfied for the purposes of S.149(1)(a) where the allotment is for money due by the company, since, in view of subsections (1) and (4) of the section, money can be due and presently payable by the company only from the date on which the minimum subscription has been raised. Hence, even if despite the prohibition in sub-section (1) of the section, the company incurs debts, those debts being payable only after the minimum subscription is raised, cannot support a plea of payment by set off for the purpose of raising the minimum subscription." 9. We are in entire agreement with what is stated above. One of the two conditions essential for applying the rule in Spargo's case is thus non-existent. We therefore confirm the finding of the court below that there has been no allotment of shares to an amount not less in the whole than the minimum subscription to be held subject to the payment of the whole amount thereof in cash. This being so, the company is not entitled to commence any business. There is no material on the basis of which it is possible to say that the company will be satisfying these conditions in the future. In the circumstances we are not inclined to interfere with the discretion exercised by the learned judge in ordering the winding up of the company. 10. We dismiss this appeal. We however direct the parties to bear their respective costs in this appeal. Dismissed.