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Issues:
1. Interpretation of the right conferred to the Financial Corporation under section 29 of the State Financial Corporation Act regarding the extent of authority over the property mortgaged by a guarantor. Analysis: The judgment dealt with the interpretation of the right conferred to the Financial Corporation under section 29 of the State Financial Corporation Act concerning the authority over the property mortgaged by a guarantor. The petitioner had mortgaged his property to secure a term loan for an Industrial Unit, and when the loanee defaulted on instalment dues, the Corporation sought to take possession of the mortgaged property. The petitioner contended that the Corporation could only take possession of the loanee's property, not the guarantor's. The petitioner relied on a decision of the Allahabad High Court, while the respondent cited a decision of the Orissa High Court, which held that the Corporation could take possession of all properties mortgaged with them under section 29 of the Act. The Court analyzed the relevant provisions of the Act and previous court decisions. It emphasized that the Act allows the Corporation to take over the management or possession of all properties mortgaged with them, including those of guarantors. The judgment referred to the Orissa High Court decision, which clarified that the Corporation's right under section 29 extends to all mortgaged properties, not limited to the borrower's assets. The Court distinguished the Allahabad High Court's view and upheld the Corporation's authority to proceed against both borrower and guarantor properties under section 29. The Court rejected the petitioner's argument that the Corporation should have first proceeded against the loanee's property before the guarantor's. It highlighted that the Act does not restrict the Corporation's choice in initiating action against mortgaged properties. The judgment emphasized that the Corporation's actions were in line with the law, as they had made efforts to recover the outstanding loan amount from the industrial unit but were unsuccessful. The Court reiterated that the Corporation had the right to proceed against all mortgaged properties to recover the loan amount, as per the security arrangement. The judgment concluded that the petition lacked merit and was dismissed, with all interim orders vacated, and no costs were awarded.
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