JUDGMENT

S.C. AGRAWAL, J.:—Leave granted.

2. We have heard learned counsel for the parties.

3. This appeal is directed against the Judgment of the Madras High Court dated February 23, 1994 in Writ Appeal No. 97 of 1994 arising out of Writ Petition No. 18048 of 1993 filed by Contromix Private Limited, respondent No. 1 herein.

4. Respondent No. 1, a company registered under the Companies Act, 1956, is engaged in the manufacturing of electronic instruments. The State Industries Promotion Corporation of Tamil Nadu Ltd. (for short SIPCOT) is a Financial Corporation established under the provisions of the State Financial Corporations Act, 1950 (hereinafter referred to as the Act). Respondent No. 1 applied for a term loan for setting up a project for manufacture of programmable logic controllers, control panels, electronic timer, temperature scanners, etc. On March 25, 1987 SIPCOT sanctioned a term loan of Rs. 38 lakhs. On June 16, 1987, IDBI soft loan of Rs. 6.8 lakhs was also sanctioned. Respondent No. 1 executed a registered mortgage on July 29, 1987 and created equitable mortgage and has executed other security documents. As per the terms of securities of the loan, respondent No. 1 was r