THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY Writ Petition No.30533 of 2011 Dated 18th November, 2011 Between: M/s.Venkanna Spinning & Weaving Mills Private Limited …Petitioner And Andhra Pradesh State Financial Corporation, Chirag Ali Lane, Hyderabad, rep.by its Managing Director and others …Respondents Counsel for the petitioner: Sri T.V.S.Prabhakar Rao Counsel for respondent Nos.1 & 2: Sri Y.V.Ravi Prasad The Court made the following: ORDER: This writ petition is filed for a mandamus to set aside proceedings in Ref.No.AFC/73846301/KVR/2011-12/2861-A, dated 27.10.2011, of respondent No.2, whereby he has proposed to auction the properties mortgaged both as primary and collateral securities. The petitioner pleaded that in respect of the two properties covered by item No.1 of Serial Nos.1 and 2 of collateral security as shown in the sale notification, it has given the same as collateral security for the loan sanctioned in favour of respondent No.3 and that the said properties along with other properties are proposed to be sold under the impugned sale notice. It is the further plea of the petitioner that the properties offered as collateral securities cannot be sold by the State Financial Corporations in exercise of their powers under Section 29 of the State Financial Corporations Act, 1951 (for short ‘the Act’). At the hearing, the learned counsel for the petitioner cited the judgment of the Supreme Court in Karnataka State Financial Corporation v. N.Narasimhaiah and others[1] in support of the plea of the petitioner referred to above. Sri Y.V.Ravi Prasad, learned Standing Counsel for APSFC, representing respondent Nos.1 and 2, fairly conceded to this position in law. The writ petition is, therefore, disposed of with the direction to respondent Nos.1 and 2 to consider whether the petitioner has offered its property as collateral security for sanction of loan in favour of respondent No.3 and if they find this question in affirmative, they shall not sell the properties in exercise of their power under Section 29 of the Act in pursuance of the sale notice. This order, however, does not preclude respondent Nos.1 and 2 from enforcing the sale of primary securities under Section 29 of the Act and also from proceeding against collateral securities, if they are entitled to do so under any other provisions of law de hors Section 29 of the Act. As a sequel to disposal of the writ petition, W.P.M.P.No.37853 of 2011 is disposed of as infructuous. C.V.NAGARJUNA REDDY, J 18th November, 2011 VGB [1] (2008) 5 SCC 176