K.S. Mudagal, J.

1. This appeal arises out of the order dated 25.11.2015 passed by the XXXVII Addl. City Civil & Sessions Judge (CCH-38), Bangalore City in Misc.No.484/2002. By the impugned order, the trial Court has allowed the petition of the present respondent nos.1 and 2 under Sections 31(aa) and 32 of The State Financial Corporation Act, 1951 (Hereinafter referred to as ‘The Act’ for short) for recovery of Rs.2,53,25,253/- with interest @ 24% P.A. compoundable half yearly.

2. The appellants are respondents 2 and 3 before the trial Court. Respondent nos.3 and 4 are respondent nos.1 and 4 respectively. Respondent nos.1 and 2 are petitioner nos.1 and 2 before the trial Court. For the purpose of convenience, parties will be referred to hereafter with their ranks before the trial Court.

3. Respondent nos.2 to 4 are the directors of respondent no.1-company. In 1996, respondent no.1-Company availed loan of Rs.125 lakhs from the petitioner to acquire non-convertible debentures of the face value of Rs.100 lakhs executing necessary documents. Respondent nos.2 to 4 are the guarantors to the loan and are also liable as directors of the Company. Petitioners filed the petition conten