Section 29 of the State Financial Corporation Act, 1951, is not violative of Article 14 of the Constitution of India as it provides a guiding policy and principle for the Corporation to select the procedure for enforcement of claims against borrowers.

JAYACHANDRA REDDY, J.

( 1 ) THIS Writ Petition is for the issuance of a writ of mandamus or any other writ or direction declaring the sale of the petition-schedule properties by the Andhra Pradesh State Financial Corporation, i. e. , the 2nd respondent, under Section 29 of the State Financial Corporation Act, 1951 in favour of the 4th Respondent, as unconstitutional, illegal and void, and the same came up for hearing before one of us (Sambasiva Rao, J. , as he then was ). During the course of the arguments, the learned counsel for the petitioner questioned the constitutional validity of the Section 29 of the State Financial Corporation Act, 1951, hereinafter referred to as "the Act", and as the same has to be heard by a Division Bench, the writ petition was directed to be posted before a Bench and accordingly it has come up before us.

( 2 ) THE essential facts for appreciating the contentions on behalf of the petitioner, may briefly be stated. The writ petition schedule properties consisting of both movable and immovable properties, which are necessary for the purpose of maintaining the Khandasi Sugar factory situated at Narasmhunipeta, Bobbili Taluk, belonged to Sri Venugopal Khandasari Sugars of which the 5th respondent was the Managing Partner. The 5th respondent approached the 2nd respondent for a loan of Rs. 1,50,000. It was sanctioned upon the terms and conditions and against the security mentioned in the mortgage deed executed and registered on 26-11-1963 by the 5th respondent in favour of the 2nd respondent. The loan was subsequently reduced to Rs. 1,24,000 and the same had to be repaid by instalments. On 11-2-1966 the first instalment was paid. On 23-10-1967 the petitioner wrote a letter to the 2nd respondent stating that the petition-schedule property was sold to them and that they will be responsible for the repayment of the loan amount by instalments due to the 2nd respondent. The petitioner having thus come into possession of the property become liable to repay the loan amount, but failed to pay off the arrears. In this regard and in regard to the transfer of assets by executing the necessary documents correspondence commenced from 28-11-1967 onwards the details of which will be given later. The 2nd respondent ultimately filed O. P. No. 47 of 1972 on 10-8-1972 in the Court of the District Judge, Srikakulam for the sale of the schedule properties under the provisions of Section 31 (1) (a) of the Act and for other necessary reliefs. During the pendency of this O. P. several interlocutory applications for appointment of a Receiver and other reliefs, were filed from time to time. Ultimately an Advocate-Receiver was appointed for the management of the properties. During the pendency of the O. P. the 2nd respondent-Corporation advertised in the Indian Express dated 28-7-1973 and in Andhra Patrika dated 30-7-1973 inviting tenders for purchase of the Khandasari Unit and among the tenders received the tenders of the 4th respondent was fund to be in order as it satisfied the necessary conditions. While that being so, the 2nd respondent filed I. A. No. 503 of 1973 with a request to advance O. P. No. 47 of 1971, and the permission to withdraw the O. P. The hearing of O. P. was advanced and on 27-8-1973, the O. P. was dismissed as withdrawn. On 28-8-1973 the 2nd respondent exercising its power under Section 29 of the Act executed a sale deed in favour of the 4th respondent.

( 3 ) IN this writ petition, which is filed questioning the above said sale by the 2nd respondent to the 4th respondent, it is mainly contended that Section 29 of the Act is violative of Article 14 of the Constitution of India. This plea was not originally taken, but subsequently the petitioner was permitted to raise the same and a petition seeking for the amendment to this effect is also allowed. Sri Challa Seetharamaiah, the learned counsel for the petitioner contends before us that firstly Section 29 of the Act is violative of Article 14 of the Constitut

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