( 1 ) THIS reference has been placed before the Full Bench as per the order of the Chief Justice dated 26-3-2004. The matter has come up before us on 13-4-2004.

( 2 ) A Division Bench of this Court was considering the appeals. Having heard the submission and considering the case laws relied upon by the learned counsel for the parties, it formulated certain questions for consideration. The Division Bench found no decision of any Court in the country, which touched the questions formulated by it. It found contrary views expressed by a single bench judgment of the Rajasthan High court in Rajasthan Financial Corporation v. Banwari Lai, AIR 1997 Rajasthan 273 and in the decision in Orissa State Financial Corporation v. Sailendra Narayan Patnaik, (1999) Bank Cas 78 regarding applicability of Article 137 of the Limitation Act (for short, 'the Act') to applications under Section 31 of the State Financial Corporations Act ('sfc act' for short ). In view of the conflicting decisions, the Division Bench being of the opinion that an authoritative pronouncement on 'the points would be perfectly justified, directed the office to place the matter before the Chief Justice for constituting an appropriate Bench, vide order dated 4-2-2004. As stated, the matter is placed before us.

( 3 ) THE questions referred to by the Division Bench for our consideration are as follows : (1) Keeping in view the expression used in Section 31 of the State Financial Corporations Act and the provisions of sub-section (11) thereof, (seems to be of S. 32) is an application made to the District Judge for one of the reliefs envisaged under the said provision an application made to a Civil court? (2) Is an application under Section 31 of the State Financial Corporations Act governed by any period of limitation stipulated under the provisions of the Limitation Act, 1963, having regard to the nature of Jurisdiction and the remedy provided under the state Financial Corporations Act ? (3) If applications under Section 31 of the State Financial Corporations Act are held to be governed by the provisions of the Limitation Act, 1963 what is the limitation prescribed for making of such applications ? (4) Are the guarantees furnished by the respondents in the instant case continuing guarantees and if so what is the period of limitation if any applicable for recovery of money under Section 31 on the basis of such guarantees ? (5) What is the true and correct purport of the expression 'ordinarily carries on business' appearing in Section 31 (1) of the State financial Corporations Act ? In particular can an application under Section 31 (1) be made to a District Judge within whose territorial Jurisdiction the borrower used to carry on business but is no longer doing so on the date when the application was filed ?

( 4 ) M. F. A. No. 1467/1997 has been filed by the Karnataka State Financial Corporation (for short, 'ksfc') against the order dated 28-1-1997 passed by the VIII Additional City Civil Judge, Bangalore, in Misc. Case No. 430/1988. The KSFC sanctioned a term loan of Rs. 6,50,000/- to M/s. Kam organic Industries (P) Ltd. , for its industrial concern proposed to be engaged in manufacture of Benzyl Group of Chemicals. The respondents are the Directors of the said industry and sureties for the repayment of the term loan. The loan was secured by hypothecation of plant and machinery and by mortgage of land and building by deposit of title deeds. The respondents signed the documents in their capacity as Directors of the Industry and in their personal capacity as sureties for the repayment of loan. The industry committed default and the respondents did not make good the default. The KSFC issued a certificate dated 23-5-1980 for a sum of Rs. 7,89,233-80 ps. and brought for sale in auction the mortgaged and hypothecated assets of the Industry for recovery of dues. Public auction was held. But no bidder was available. Subsequently, a sum of Rs. 3,75,000/- was realised b