The Act provides guidelines for the exercise of power by the Corporation, and the Corporation acted with due care and caution, thus not violating Article 14 of the Constitution.

BHASKARAN NAMBIAR, J. :- The petitioner challenges the validity of Section 29 of the State Financial Corporations Act, 1951 (for short, the Act) under the following circumstances. He obtained a loan of Rs. 99,752/- from the Kerala Financial Corporation for purchasing machinery for a mini industry in the Mini Industrial Estate at Koduvayur, by hypothecating his properties and executing an agreement on 7-9-1977. He, however, defaulted in the payment of the instalments due to the Corporation and the Corporation therefore demanded by a written notice the payment of the balance amounts with interest and also warned the petitioner that on his failure to comply with the demand, possession of the premises would be taken over by the Corporation and assets disposed of under the provisions of the Act. The petitioner did not pay the arrears demanded; nor did he show his willingness even to pay any portion of the debt. Instead he replied that the steps may be dropped for a further period of six months and requested that his case for granting interest rebate, refixation of the loan amount and re-schedule of the instalment may be considered afresh. When he did not make any remittance as demanded, the Corporation was constrained to take possession of the factory premises on 14-8-1982. This writ petition is thus filed challenging the validity of Section 29 of the Act and for a direction commanding the Corporation to hand over possession of the factory to the petitioner and to direct them to reschedule the instalments after allowing interest rebate as claimed by him.

2. The petitioner's rights and liabilities arise under a contract which he has entered into with the Corporation and therefore his claim as to the amounts actually due by him are outside judicial examination under Article 226 of the Constitution of India as held by this Court in the decision in David v. Kerala State Financial Corpn., (1988) 1 Ker LT 585 : (AIR 1988 Ker 319) wherein it has been held thus :-

"the jural relationship between the petitioners and the Corporation is purely contractual. For breach of any conditions in the said contract, or for enforcing the rights thereunder, or for getting redressal against recovery of amounts pertaining to such contract, the remedy of the petitioners should be, by filing a suit in the ordinary civil court. It is not open to the petitioners to invoke the extraordinary jurisdiction vested in this Court under Art.276 of the Constitution of India."

3. He has, therefore, confined his attack, in this Court, to the validity of Section 29 and if his contention is upheld, he may be entitled to restoration of possession of the factory premises. He contends that the Act has given an unguided, uncanalised power to the Corporation to take possession of the property of a defaulter and the Corporation can pick and choose one of the two remedies available to them against the same defaulter, as their discretion is not controlled by any statutory guidelines. Section 29, according to the petitioner is harsh, and capable of arbitrary exercise and thus violative of Article 14 of the Constitution.

4. We shall, therefore, straightway advert to the constitutional question raised by the petitioner. The two remedies available to the Financial Corporation under the Act are contained in Sections 29 and 31 of the Act. Section 29 of the Act reads thus :

"29. Rights of Financial Corporation in case of default.- (1) Where any industrial concern, which is under a liability to the Financial Corporation under an 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, the financial Corporation shall have the right to take over the management or possession or both of the industrial concern, as well as the right to transfer by way of tease or sate and realise the