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Issues:
1. Interpretation of Section 29 of the State Financial Corporations Act, 1951 regarding the authority of the financial corporation to sell assets of a defaulting creditor. 2. Whether the financial corporation can sell machinery and equipment as one lot and landed property separately. 3. Application of Section 529A of the Companies Act in overriding provisions of Section 46B of the State Financial Corporations Act. Analysis: The judgment revolves around the interpretation of Section 29 of the State Financial Corporations Act, 1951, specifically focusing on the authority of the financial corporation to sell assets of a defaulting creditor. The primary contention raised by the appellant was whether the industrial concern could be sold as a whole or piecemeal. The learned single judge held that the financial corporation has the right to sell machinery and equipment as one lot and landed property separately, emphasizing the necessity for timely liquidation to prevent losses to all parties involved. Regarding the sale of assets, the judgment clarifies that Section 29 of the Act grants extensive powers to the financial corporation to realize dues from defaulting creditors. The section enables the corporation to take over management or possession of the industrial concern and transfer or sell it to recover outstanding amounts. It establishes that once the corporation invokes this section, it can be deemed the owner of the concern, allowing it to sell assets as necessary for debt recovery. The court dismissed the appellant's argument that the corporation was limited to selling the industrial concern as a unit, affirming the corporation's discretion in selling assets to maximize recovery. The judgment also addressed the appellant's reliance on Section 529A of the Companies Act, contending that it overrides Section 46B of the State Financial Corporations Act. However, the court differentiated the applicability of Section 529A in the present case, highlighting that the permission granted by the single judge to the financial corporation under Section 29 of the State Financial Corporations Act was valid. The court emphasized that the corporation, being a secured creditor, had the authority to sell the industrial concern as per the provisions of the State Financial Corporations Act, rendering the argument invoking Section 529A futile. In conclusion, the court dismissed the appeal, affirming the decision to allow the financial corporation to sell the assets of the defaulting creditor in a manner deemed fit for debt recovery. The judgment underscores the broad powers granted to financial corporations under Section 29 of the Act and the importance of timely liquidation to prevent losses to all parties involved.
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