The provisions of O. 21, R. 58 of the CPC, including those relating to claims by third parties, are applicable to proceedings under Section 32 of the State Financial Corporation Act, 1951.

R. C. PATNAIK, J.

( 1 ) THE question that has arisen in these two matters - a Civil Revision and a Miscellaneous Appeal have been filed by way of abundant caution - is, if the provisions contained in O. 21, R. 58 of the C. P. C. are applicable to proceeding under S. 31 of the State Financial Corporation Act, 1951 (Central Act No. LXIII of 1951) (Hereinafter called 'the Act') read with S. 32 thereof.

( 2 ) SHORN of unnecessary details, the facts in short are : one Parikhit Chhotary, brother of the petitioner, had obtained a loan from the Orissa State Financial Corporation (hereinafter called, 'the Corporation') mortgaging certain property as security for the loan. On his default in payment of loan, steps were taken for sale of the property mortgaged. In course of the proceeding, the property was directed to be sold. At this stage, the petitioner, brother of Parikhit, filed an application under O. 21, R. 58 of the C. P. C. for the lifting of the order of attachment and release of his property from the proposed sale. The learned District Judge rejected the application as incompetent holding that the provisions contained in O. 21, R. 58 were not applicable to proceeding under S. 32 of the Act.

( 3 ) NOT being sure about the legal position, the claimant has filed an appeal as well as a revision. For convenience I would treat the claimant as the appellant.

( 4 ) SHRI Samareswar Mohanty, the learned counsel of the appellant, has urged that the learned District Judge has erred in law in the face of the express provisions contained in S. 32 (8) of the Act in holding (a) O. 21, R. 58 did not have any application to a proceeding under S. 32, and (b) denial of an opportunity to a third party, whose property has been fraudulently mortgaged, hypothecated or assigned to the Corporation, to seek release of his property would render the provision of S. 32 of the Act unconstitutional and, therefore, this Court should so construe the provision as to save it from the vice of unconstitutionality.

( 5 ) SHRI S. N. Sinha, the leaned counsel for the Corporation, has sought to repel the challenge contending that the proceeding under S. 32 of the Act not being a suit, no decree is passed therein. Sub-Section (8) of S. 32 provides the procedure for attachment and sale but nothing more. The proceeding is between a Corporation and the industrial concern. Therefore, a third party has no locus standi. When the only defence available to the industrial concern is, whether the Corporation is entitled to the reliefs under S. 31 of the Act, conceding to a third party the right to raise claims would widen the scope of S. 32 not contemplated by the provisions and would encourage unscrupulous persons to raise bogus claims to defeat the interest of the Corporation. Introduction of such claims would defeat the provisions and their purpose would be frustrated. He has further urged that the interpretation as advocated by the counsel for the appellant would open up a floodgate of litigations.

( 6 ) LET me touch on the last contention of the learned counsel for the respondents, i. e. the floodgate plea, which does not appeal to me. If the provisions would bear the meaning and permit third parties to raise claims to property mortgaged, hypothecated or assigned to the Corporation, it would not be permissible to shut the door of a claimant, who has reason to be aggrieved, on the basis of the floodgate argument. I close this part by quoting a line from the speech of Lord Wilberforce in the House of Lords. Repelling the floodgate argument and the plea of increased litigation, the noble Lord observed : "be it so, if that is the route to justice. "

( 7 ) WITH a view to providing medium and long-term credit to industrial undertakings, which fall outside the normal activities of commercial Banks, a Central Industrial Finance Corporation was set up under the Industrial Finance Corporation Act, 1948. The State Governments wished that similar Corporations should also be set up