1. This Original Petition has been filed under Sections 31(a), 31(aa) and 32 of the State Financial Corporation’s Act, 1951 praying to determine the liability and direct the respondents 1 to 3 to pay jointly and severally a sum of Rs. 49,46,166/- to the petitioner corporation with interest at the rate of 18.50% p.a., from the date of the petition till the date of realization in full and order the sale of “A” Schedule property towards the realization of the above sum.

2. In the Original Petition it is stated that the petitioner is a public financial institution incorporated under the Companies Act to grant loans and advances to industries in the State of Tamil Nadu and Pondicherry on the security of hypothecation and mortgages. The petitioner obtains funds from Apex Financial Institutions of India and lend the same to entrepreneurs at concessional rate of interest. The first respondent, to set up a Weaving Mill for manufacture of cotton fabrics approached the petitioner corporation for term loan. Petitioner corporation sanctioned a term loan for Rs. 2.50 lakhs towards purchase and erection of machinery on 13.7.1994. As per the terms and conditions, the term loan is to be repai