( 1 ) THIS appeal arises out of the judgment and order passed by the learned District Judge, 24-Paraganas on March 17,1977 in Misc. Case No. 176 of 1970. Engineers (Overseas) Corporation Private Ltd. incorporated and registered under the Companies Act is the appellant in the instant appeal and the said Misc. case arises out of an application made by the West Bengal Financial Corporation a statutory Corporation under the State Financial Corporations Act, 1951 under Ss. 31 and 32 of the Act against the Engineers (Overseas) Corporation Ltd. and Sisir Kumar Arnab its Director. The aforesaid application under Ss. 31 and 32 of the State Financial Corporations Act (hereinafter referred to as the State Act) was made for sale of mortgage properties belonging to the Engineers (Overseas) Corporation Private Ltd, It was stated in the said application under Ss. 31 and 32 that the Engineers (Overseas) Corporation Private Ltd, was engaged in the manufacturing and processing of goods and was an industrial concern within the meaning of the State Act and the said Company had been carrying on its business at Premises No. 42, Raja Santosh Road Alipore, and the respondent No. 2, Sisir Kumar Arnab was at all material time, a Director of the said Company. The Company was empowered by its memorandum and Article of Association to borrow and/or raise money and to secure the payment or repayment of all sum or sums so borrowed or taken on loan by creation of mortgage, charge or other security upon all or any part of the property of the respondent company. The said company borrowed certain sums of money from the West Bengal Financial Corporation under an Indenture of Mortgage and Guarantee dt. 9th August, 1965 executed by the said company in favour of the West Bengal Financial Corporation and the said Sisir Kumar Arnab was also a guarantor in his personal capacity in respect of the loan and advance and mortgage made under the said indenture.

( 2 ) IT was contended by the West Bengal Financial Corporation that in terms of the said Indenture of Mortgage and guarantee about Rs. 1,90,000/- had been advanced and it was agreed that the said company would make repayment of the said loan in instalments but the said company and/or its Director excepting payment of an instalment failed and neglected to make such payment as agreed upon. It was also contended that the said indenture of mortgage and guarantee was duly registered and the West Bengal Financial Corporation was entitled for a sum of Rs. 1,77,500/- towards the principal minus one instalment paid by the said Company and a sum of Rs. 43,800. 88 as interest thereon and the total amount thus payable was Rs. 2,20,300. 88 The Corporation by its letters dt. 31-1-1969 and 11-6-1970 duly called upon the said company to make payment of the dues but the said company and/or its Director failed and neglected to make such payment. Accordingly, the said application under Ss. 31 and 32 was made for sale of the mortgage property specified in the schedules to the indenture of mortgage dt. August 9, 1965 and a prayer for attachment of the said property was made. It appears that in terms of the said prayer, the mortgage properties have been attached by the learned District Judge. It may be noted in this connection that such application under Ss. 31 and 32 is to be presented before the learned District Judge having its jurisdiction over the properties since mortgaged by the company. It appears that initially, a preliminary objection was raised before the District Judge about the maintainability of the said application on the ground that the said State Act was ultra vires the Constitution because the State Act being in substance an Act for money lending business comes under the jurisdiction of the State Legislature under Sch. VII of the Constitution and the Central Government had no jurisdiction to enact the said State Act of 1951. The said contention, however, was not accepted by the learned District Judge and