The procedure under S.31 of the State Financial Corporations Act, 1951 was found to be constitutional and not discriminatory, providing advantages to the debtor.

1. The challenge in this writ petition is directed against the constitutional validity of S.31 of the State Financial Corporations Act, 1951. That Section reads.

"31. Special provisions for enforcement of claims by Financial Corporation.

(1) Where an industrial concern in breach of any agreement makes any default in repayment of any loan or advance or any instalment thereof or in meeting its obligations in relation to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the Financial Corporation or where the Financial Corporation requires an industrial concern to make immediate repayment of any loan or advance under S.30 and the industrial concern fails to make such repayment then, without prejudice to the provisions of S.29 of this Act and of S.69 of the Transfer of Property Act, 1882, any officer of the Financial Corporation generally or specially authorised by the Board in this behalf may apply to The District Judge within the limits of whose jurisdiction the industrial concern carries on the whole or a substantial part of its business for one or more of the following reliefs, namely:

(a) for an.order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation as security for the loan or advance; or

(b) for transferring the management of the industrial concern to the Financial Corporation; or

(c) for an ad interim injunction restraining the industrial concern from transferring or removing its machinery or plant or equipment from the premises of the industrial concern without the permission of the Board, where such removal is apprehended.

(2) An application under Sub-section (1) shall state the nature and extent of the liability of the industrial concern to the Financial Corporation, the ground on which it is made and such other particulars as may be prescribed."

The petitioner's contention is that the provisions contained in S 31 of the Act would be hit by the provisions of Art.14 of the Constitution, in as much as different methods for realisation of the amounts due to the Corporation are provided.

2. We have not been shown how the procedure under S.31 of the Act is less favourable or more onerous to the petitioner. As a matter of fact, all the procedure contemplated under the Code of Civil Procedure would be undergone in proceedings under S 31 of the Act also. If at all, in our view, this is more advantageous and more liberal in favour of the debtor; and there is no substance in the argument that the debtor would be subjected to hostile discrimination by following the procedure under S.31 of the Act. We find a similar decision having been taken by a Full Bench of the Orissa High Court in State Financial Corporation v. Satpathy Bros & Nanda Co. (AIR. 1975 Orissa 132).

The result therefore is that the writ petition is dismissed. No costs.