( 1 ) THESE two petitions are filed under section 31 (l) (aa) of the State financial Corporation Act against the guarantors. Since the facts as well as the contentions raised in both the present petitions are substantially identical, the same are disposed of by this common judgment. The facts are taken from misc. petition No. 34 of 2002.

( 2 ) THE respondent Nos. 1, 2 and 3 are the guarantors and for enforcement of their liabilities under the said guarantees, the present petitions are filed by the petitioners under section 31 (l) (aa) of the State Financial Corporation Act.

( 3 ) ONE M/s Mehta Rubber Chemical Ltd. , was a company incorporated and registered under the Companies Act, 1956. This company is the respondent No. 4 in the present petition. The said respondent No. 4 made an application for sanction of the loan amount of Rs. 149 lacs towards the term loan. The same was sanctioned by the petitioner on the various terms and conditions one of which was to mortgage the entire plant, machinery and land and building of the said respondent No. 4 with the petitioner herein. The said amount was subsequently disbursed on 6-1-1995 and the company has availed of the said loan amount of rs. 149 lacs. A deed of mortgage was executed on 6-1-1995. The respondent no. 4 thereunder created the first charge in favour of the petitioner in respect of the plot of land bearing plot No. T-133 in Tarapur Industrial Area of MIDC as well as the building and structure standing thereon along with the plant and machinery.

( 4 ) IN consideration of disbursement of the said loan to the respondent No. 4 company the respondents No. 1 to 3 have executed personal guarantees on 6-1-1995 and assured the repayment of the dues by the company and undertook that in an event if the default is committed by the respondent No. 4 to make payment, under the terms and conditions of the said loan agreement then in that event the respondent Nos. 1 to 3 agree to make good the said payment under the said guarantee. It is an admitted position that out of the said Rs. 149 lacs sanctioned rs. 147 lacs were disbursed to the respondent No. 4 and respondent No. 4 failed to make repayment of the amount as per the terms and conditions thereof. On 11-7-2000, a notice of demand was issued calling upon the respondent No. 4 to pay the outstanding arrears of instalment amount. However, in spite of the same no payment was forthcoming. Thereafter, a further notice was issued on 16-8- 2001 and the petitioner once again called upon the respondent No. 4 to make payment of the then outstanding amount of Rs. 42,86,191/-, the amount of instalments which were overdue as on that date. Ultimately, the petitioner has recalled the said lean and exercised power under section 29 of the State Financial corporation Act and took over the said property mortgaged in favour of the petitioner herein. Thereafter the guarantees were invoked by the petitioner which were executed by respondent No. 1 to 3. By their demand notice dated 23-4-2002 the petitioners called upon the respondent Nos. 1 to 3 to make payment of the said amount outstand. ng of Rs. 1,06,97,487/ -. The present petition is filed by the petitioner for the enforcement of the said guarantees. An additional affidavit has been filed dated 11-3-2005 inter alia pointing out therein that there is an outstanding amount due and payable by the respondent Nos. 1 to 3 to the petitioner as well as IDBI of Rs. 1,80,40,815 together with interest at the rate of 22%. It has been stated in paragraph 3 of the said affidavit that after filing of the petition the mortgaged assets are disposed of and an amount of Rs. 75,23,647/- has been received by the petitioner towards net sale proceeds which the petitioner has given credit and thereafter the aforesaid amount of Rs. 1,80,40,8157- has been worked out with interest accrued in respect of the said amount.

4a. The learned counsel appearing for the respondent has contended before me the following submissions. F