The main legal point established is the premature challenge to SARFAESI proceedings, the availability of an alternative remedy under the SARFAESI Act, and the requirement for proper evidence and documents to decide disputed facts.

B. Veerappa, J.

1. The above matter has been remanded from the Hon'ble Supreme Court in Civil Appeal No. 10437/2013 decided on 19th November, 2013. This Court is directed to decide the appeal afresh after giving an opportunity of hearing to the present appellant/KSFC and respondents herein in accordance with law.

2. The factual matrix of the case are:

The appellant/Corporation has been established by the Government of Karnataka under the provisions of Section 3 of the State Financial Corporation Act (hereinafter referred to as 'the SFC Act') and the Corporation has to deal with the funds on business principles having due regard to the interests of the industry, commerce and the general public as required under the provisions of Section 24 of the SFC Act and in accordance with the required Financial Discipline. The Financial Corporation discharges the public duty while disbursing loan as well as while recovering the same from the beneficiaries for recycling. That one M/s. Sunsu Garments Pvt. Ltd., had availed the financial assistance of Rs. 26 lakhs from the appellant/Corporation on 31.3.1989 payable in 23 quarterly installments and an additional term loan of Rs. 31 lakhs was obtained on 31.3.1995 payable in 18 quarterly installments and the 1st respondent/petitioner stood as guarantor to the said loan of M/s. Sunsu Garments Pvt. Ltd., by mortgaging his property. The principal borrower committed default and was subjected to liquidation by the process of this Court and the company was wound up by an order dated 24.7.2000. The appellant/Corporation having no other option, initiated recovery proceedings against the guarantors and for the sale of the collateral security mortgaged by the 1st respondent. It is further case of the appellant/Corporation that the principal borrower had lastly paid a sum of Rs. 6,17,000/- on 20.3.1999 towards the dues as on that date and cause of action arose for non payment of regular installments as on September, 1999 and immediately, the liability was crystalised on 2.4.2001. Accordingly, the appellant had initiated recovery action in Misc. No. 370/2001. During the pendency of the said proceedings, the subject schedule property was deleted from the said proceedings by an order dated 16.6.2005. Later the appellant/Corporation initiated recovery proceedings against the mortgaged property under the provisions of Section 29 of the SFC Act, 1951 by issuing a notice dated 6.8.2005. Aggrieved by the said notice, the 1st respondent filed a writ petition i.e., W.P. No. 25001/2005 before this Court and subsequently, the appellant withdrew the said notice in the light of the law declared by the Apex Court in the case of N. Narasimhaiah vs. KSFC [(2008) 5 SCC 176] and this Court disposed of the said writ petition permitting the appellant/Corporation to proceed in accordance with law against the 1st respondent's property which was mortgaged to the appellant/Corporation.

3. The appellant, thereafter initiated proceedings against the property mortgaged by the 1st respondent under the provisions of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (for short hereinafter referred to as 'SARFAESI Act') by issuing notice dated 23.9.2008 demanding the due amount. Aggrieved by the said demand notice, the 1st respondent filed W.P. No. 14820/2008 before this Court and the learned Single Judge of this Court, after hearing both the parties, by an order dated 21st October, 2010 allowed the said writ petition and quashed the notice dated 23.9.2008 on the ground that the impugned action of the appellant to proceed against the 1st respondent under the provisions of Section 13(2) of the SARFAESI Act was barred by limitation.

4. Aggrieved by the order passed by the learned Single Judge of this Court, KSFC/the present appellant herein has filed the above appeal and this Court after hearing both the parties to the lis by the order dated 3rd December, 2012 allowed the writ appe