JUDGMENT

S.B. Sinha, J. —

INTRODUCTION

1. Interpretation of Section 29 vis-‘-vis Section 31 of the State Financial Corporations Act, 1951 (for short “the Act”) is in question in these appeals which arise out of a judgment and order dated 26.03.2003 passed by a Division Bench of the Karnataka High Court in Writ Petition Nos. 37209 & 37907 of 2000, 24452 of 2001, 13354 and 16614 of 2002.

FACTUAL BACKDROP

2. Respondents herein furnished sureties and/ or guarantees in respect of the loans taken by the industrial concerns (Respondent Company)

3. We may notice the fact of the matter from the case of AP Rocks Private Limited (Writ Petition No. 37209 and 30907 of 2000) before the High Court. AP Rocks Private Limited is an industrial concern. It approached the appellant Corporation for grant of loan in the form of non-convertible debenture facility to the extent of 100 lakhs to meet its working capital requirements.

Respondents who were Directors of Company executed deeds of guarantee dated 15.05.1996 and 9.08.1996 agreeing to guarantee repayment/ redemption by the Company to the Corporation of the said non-convertible debenture subscription together with interest, etc. The said Company