Government department status determines limitation, and the State's claim was held within time.

The Industrial Trust Fund was held to be a governmental department rather than a separate corporation because it was administered by civil servants under Government control and lacked indicia of corporate existence such as perpetual succession, a seal, or independent power to contract and sue. As the Fund was treated as money set apart by the Government for specified purposes, the State Government was the real creditor. Accordingly, the special limitation period applicable to suits by or on behalf of a State Government applied, and the debt was not barred by limitation. The objection based on the alleged corporate character of the Fund therefore failed.

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Issues: Whether the debt claimed by the State was barred by limitation, depending on whether the Industrial Trust Fund was a corporation or only a department of the Government, and whether Article 149 of the First Schedule to the Indian Limitation Act 1908 applied.

Analysis: The mortgage deed and the governing rules showed that the Industrial Trust Fund was administered by civil servants as part of the Government machinery and did not possess the attributes of a separate corporate entity such as perpetual succession, a seal, or independent power to contract and sue in its own right. The Fund was treated as money set apart by the Government for specified purposes and controlled as a governmental department. On that basis, the creditor was the State Government, so the special limitation period applicable to suits by or on behalf of a State Government governed the claim.

Conclusion: The debt was not barred by limitation, and the objection based on the alleged corporate character of the Fund failed.

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