The main legal point established in the judgment is that the decision of the Hon'ble Supreme Court in N.Narasimhaiah's case has retrospective effect and applies to all pending cases, unless specifically stated otherwise.

JUDGMENT :

P.B.BALAJI, J.

Prayer:- Appeal filed under Clause 15 of Letter Patent praying to set aside the order passed by this Court in W.P.No.33499 of 2002, dated 30.11.2004.

The unsuccessful writ petitioner is the appellant in the present writ appeal. The writ petitioner sought issuance of a writ of certiorari seeking to quash the letters dated 05.08.2002 and 09.08.2002 of the 1st respondent, namely, the Tamil Nadu Industrial Investment Corporation Limited (TIIC) relating to an auction dated 25.02.2002. The premise on which the writ petitioner approached the Court was that he had given his residential property, namely, D/No.84, Tiruvallur, Papakurichi,Trichy-19 as collateral security for the loan availed of by one Mr.A.Abdul Rahman, Proprietor, Electrical Industries, from the 1st respondent, TIIC. The principal borrower defaulted in payment of the loan and therefore, the proceedings were initiated by the first respondent under Section 29 of the State Financial Corporations Act, 1951. The property of the writ petitioner was sought to be auctioned to recover the dues of the borrower, Mr.A.Abdul Rahman. The second respondent participated in the auction held in 25.02.2002 and his offer being the highest, the property of the writ petitioner was sold to the second respondent. It is the case of the writ petitioner that the sale had not been confirmed and that the writ petitioner continued to be possession of the said residential property. Despite approaching the 1st respondent with a request not to sell the petitioner’s property, the attempt did not fructify and the first respondent issued the impugned letters calling upon the writ petitioner to pay the auction amount failing which the sale in favour of the second respondent would stand. Before the Writ Court, the auction purchaser, viz., the second respondent filed a counter stating that she was a bonafide purchaser who had parted with the entire consideration. No sympathy can be shown to the writ petitioner who had admittedly offered his property as collateral security for the loan availed of by the principal borrower, Mr.Abdul Rahman. According to the 2nd respondent, auction was conducted in accordance with law and the Act does not bar or prevent the sale of assets of the guarantor.

2. The Writ Court, after hearing the parties, dismissed the writ petition holding that the writ petitioner cannot claim any right to withhold the confirmation of sale in favour of the successful bidder, namely, the 2nd respondent and also held that the 2nd respondent was justified in not paying the balance of the bid amount as the writ petitioner had obtained an interim order from the Writ Court.

3. The said order of the Writ Court, dismissing the writ petition, is under challenge in the present writ appeal. The writ petitioner, as appellant, has raised the grounds that the appellant being only a guarantor, his property could not be brought for sale and no right would accrue to the auction purchaser. It is further contended that being a guarantor, the Writ Court ought to have directed the 1st respondent to consider waiver of penal interest. Pending the appeal, the appellant died and his legal representatives have been brought on record as appellants 2 to 9.

4. We have heard Mr.A.R.Karthik Lakshmanan, learned counsel for Mr.C.T.Murugappan, for the appellants, Mr.R.Viduthalai, learned Senior Counsel for Mr.K.V.Sundararajan, for the 1st respondent and Mr.M.Kamalanathan, learned counsel for the 2nd respondent.

5. Before we proceed to adjudicate the writ appeal, it is seen that earlier, a Division Bench of this Court, in and by order, dated 26.09.2008 dismissed the writ appeal, after elaborately considering the submissions of the parties before it. Thereafter, Review Application No.42 of 2010 was filed by the legal heirs of the appellant and the First Bench of this Court restored the writ appeal to be heard and decided on merits, finding that the judgment of the Hon’ble Supreme Court in Karnataka State Financial