Judgment

Dr. ANAND, J.:- The common question of law which arises in both these appeals, by special leave, is whether the Financial Corporation set up under S. 3 of the State F1nancial Corporations Act (hereinafter the Act) is entitled to take recourse to the remedy available to it under Section 29 of the Act even after having obtained an order or a decree after invoking the provisions of Section 31 of the Act but without executing that decree/ order? The facts in both the appeals are, however, different and we shall first notice the relevant facts in each of the two appeals, before answering the question posed herein above.

CIVIL APPEAL NO. 3689 OF 1987.

2. The respondent borrowed a sum of Rs. 99,500/- from the appellant, the Andhra Pradesh State Financial Corporation (hereinafter the Corporation), for the purpose of carrying on the business of manufacturing agricultural implements. A mortgage deed was executed by the respondent on 27-12-1966. On account of the defaults committed by the respondent, the Corporation filed an application being OP No. 211 of 1969 before the District Judge, Guntur, under S. 31 of the Act for realisation of the sum of Rs. 1,09,020.19 paise together with further interest at the rate of 8 1/2 per cent per annum. Vide order dated 7-9-1971, the learned District Judge allowed the petition, though restricting the future interest to 6 per cent per annum. The respondent filed Civil Misc. Appeal in the High Court of Andhra Pradesh and the execution of the order in OP 211/69 was stayed by the Court on 1-3-1973, subject to the condition of respondent depositing 1/4th of the amount due and furnishing security for the balance amount within two months thereafter. The respondent failed to comply with the order dated 1-3-1973 and neither deposited 1/4th of the amount due nor furnished the security. The Corporation had also filed cross-objections in the High Court, questioning the reduction of the rate of future interest from 8 1/2 per cent to 6 per cent per annum. A Division Bench of the High Court dismissed the appeal filed by the respondent but allowed the cross-objections filed by the Corporation on 5-3-1975. The Corporation, it appears, filed OS No. 13 of 1974 before the Chief Judge, City Civil Court, Hyderabad to enforce the personal liability of the first respondent and his guarantor Shri E. Narapareddy as per the provisions of the Act. The suit was decreed by the learned Chief Judge. The Corporation, however, was not able to enjoy the fruits of the decree as the respondent shifted his place of business and could not be traced. Faced with this situation, the Corporation, issued an advertisement in a local newspaper notifying that sale of the respondent-concern would be conducted under Section 29 of the Act and invited tenders for that purpose before 7-1-1982. The second respondent submitted a tender for the sum of Rs. 2,05,000/-, which was duly accepted by the Corporation. The second respondent, thereupon, deposited Rs. 52,000/- with the Corporation on 12-1-1982 being 1/4th of the tender amount. It was at this stage, that the first respondent filed Writ Petition No. 235/ 82 in the High Court of Andhra Pradesh, questioning the calling of tenders by invoking the provisions of Section 29 of the Act on various grounds. The High Court stayed the sale of the concern subject to the condition that respondent No. 1 should deposit a sum of Rs. 35,000/ -. When the writ petition came up for hearing, it was brought to the notice of the High Court that there was difference of opinion between two Benches of the High Court with regard to the vires of Section 29 of the Act. The writ petition was accordingly referred to a Full Bench. The Full Bench did not go into the question of vires of Section 29 of the Act but held that it was not open to the Corporation to invoke the provisions of Section 29 of the Act, having first successfully invoked the jurisdiction of the District Judge under Section 31 of the Act and consequently the w