Judgement

G. K. MISRA, C.J. :- Facts may be stated in short. The State Financial Corporation Ltd. (hereinafter to be referred to as the Corporation) is the petitioner before the District Judge, Puri, M/s. Satpathy Brothers and Nanda Company (Private) Ltd. (opposite party No. 1) is an industrial concern. Its Directors are opposite parties 2 to 4. Opposite party No. 1 applied to the Corporation for a loan for setting up a rice mill at Sakhigopal in the district of Puri. The Board of Directors of the Corporation sanctioned a loan of Rs. 2,40,000 on 28-9-1962. Opposite parties executed and registered one mortgage bond on 30th October, 1962 and a supplementary mortgage bond on 27th December, 1963. In the mortgage deeds a first charge was created in respect of properties mentioned in Schedules B to D of the petition. Opposite parties 2 to 4 executed the mortgage deeds as Directors of the company and in their personal capacity as guarantors. The entire amount of Rs. 2,40,000 was paid to the opposite parties in different instalments. As per the terms and conditions of the mortgage bonds opposite parties were to pay the accrued interest quarterly each year and to repay the principal also in