CWP No.13891/2010 1 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH CWP No.13891/2010 Date of decision: 26.09.2011. Kanwal Kishore ....................Petitioner v. Haryana Financial Corporation and another .....................Respondents Coram: Hon'ble Mr.Justice Hemant Gupta Hon'ble Mr.Justice Jaswant Singh Present: Mr.NK Malhotra,Advocate for the petitioner. Mr.Kamal Sehgal,Advocate for the respondents. Jaswant Singh.J. Petitioner, who stood as a guarantor for a loan granted by the respondents-Haryana Financial Corporation (for short HFC) to M/s Pashupati Feeds, has invoked the jurisdiction of this Court under Article 226 of the Constitution aggrieved against the action of the HFC for initiating action to take possession of the collateral security under Section 29 of the State Financial Corporations Act,1951 (for short 1951 Act) in view of the principal borrower having become a defaulter. It is not in dispute that the petitioner had mortgaged his property as described in the notice (P1) issued by HFC seeking to take over the possession with police help as a collateral security for the loan facility extended to M's Pashupati Feeds. It is also not in dispute that the principal borrower i.e. M/s Pashupati Feeds has become a defaulter and a sum of Rs.4.5 crores alongwith interest is recoverable from it. It is further not in dispute that respondent-HFC has invoked the CWP No.13891/2010 2 provisions of Section 29 of the 1951 Act against the petitioner- guarantor for realisation of their outstanding loan. Learned counsel for the petitioner submits that any action by the HFC under Section 29 of the 1951 Act can only be invoked against the industrial concern/ principal borrower in view of the plain and unambiguous intention of the legislature. He further submits that any action against the guarantor like the petitioner on default by the principal borrower is beyond the scope of Section 29 of the 1951 Act and any action, if warranted against the guarantor can only be initiated under Section 31 of the 1951 Act. It is urged that the matter is squarely covered by the law enunciated by Hon'ble the Supreme Court in Karnataka State Financial Corporation v. N.Narsimahaiah and others, (2008)5 Supreme Court Cases 176. Learned counsel for the respondent-HFC could not dispute the applicability of the said judgement in the facts of this case. He however, prays for liberty to seek their other remedies available in accordance with law. In view of the above stand, writ petition is allowed with the aforesaid liberty. (Hemant Gupta) (Jaswant Singh) Judge Judge 26.09.2011 joshi