The limitation period for an application u/s 31(1)(aa) of the State Financial Corporation Act starts from the date of insertion of Clause (aa) to Section 31(1) of the Act.

JUDGMENT :

Pradipta Ray, J. - Orissa State Financial Corporation (hereinafter referred to as the 'Corporation') has filed this appeal u/s 32(9) of the State Financial Corporation Act (hereinafter referred Jo as the 'Act.') against the Judgment and order passed by the learned District Judge, Cuttack dismissing an application filed by the Corporation u/s 31(aa) of the Act.

2. The relevant facts as pleaded by the appellant-plaintiff are stated herein below :

a) Respondent No. 1 Sailendra Narayan Patnaik, took a total loan of Rs. 1,55,800/- for purchase of a truck. His father Kailash Chandra Patnaik respondent No.2 stood surety and executed necessary deed of guarantee. The vehicle was also hypothecated to the Corporation under deeds of hypothecation. As the borrower defaulted in payment of the debt. Corporation invoked its power u/s 29 of the Act and seized the hypothecated vehicle. After seizure of the vehicle advertisements were published in News Papers for sale of the said vehicle and ultimately on March 11, 1983 the vehicle was sold to one Sisir Kumar Rout for a total consideration of Rs. 1,40,000/-. After adjustment of accounts, it was found that principal amount of Rs. 67,277.82 Paise still remained outstanding. By a letter dated April 18, 1983 (Ext. 6) respondent No.1 was informed about the sale of the vehicle and terms and conditions thereof. On November 16, 1989 respondent No.1 was informed that as on June 20, 1989 outstanding amount including interest was Rs. 1,26,999.94 P. and he was asked to pay the said amount by November 15, 1989. A copy of the said notice was also sent to respondent No.2. Subsequently another notice dated November 19, 1990 was issued to respondent No.1 with a copy to respondent No.2 calling upon them to pay the dues as stood on November 20,1990, (Rs. 1,48,645.66 P.). As no amount was paid, the Corporation on January 22, 1991 filed an application u/s 31(1)(aa) of the Act in the Court of the District Judge. Cuttack for enforcement of personal liability against respondents 1 and 2 for an amount of Rs.1,50,783.18 P. and interest thereon.

3. Respondents land 2 contested the said application by filing a joint written objection. They denied receipt of any notice before auction of the hypothecated vehicle or after. They also raised disputes regarding the amount claimed and legality of invocation of the power u/s 31 of the Act. A question was also raised that as the Corporation parted with security without giving any notice to the surety, the respondent No.2, guarantor, stood discharged from his liability as surety.

4. The trial Court upheld contention of the respondents that the surety stood discharged because of Corporation's action of selling the vehicle without giving any notice to the surety. The trial Court also made certain comments about the delay in raising the demand due to which the outstanding amount became more than double. The trial Court dismissed the application of the Corporation.

5. In this appeal, an application under Order 41, Rule 27, C:P.C.has been filed by the Corporation' including the advertisements published in the News Paper before sale of the Vehicle and Copies of two letters dated January 18, 1983 and February 9, 1983 sent to respondent No.1 .

6. In support of the appeal Mr. S. S. Mohanty, learned counsel raised many interesting questions while assailing the impugned Judgment. However, during hearing one primary question cropped up whether the application was barred by limitation.

7. An application u/s 31 of the Act lies to the District Judge which is no doubt, a Court. Supreme Court in Maharashtra State Financial Corporation v. Jaycee Drugs and Pharmaceuticals Pvt. Ltd. and Ors. reported in JT 1991(1) SC 524 has already held that District Judge exercising jurisdiction under Sections 31 and 32 of the Act functions as a Court of Ordinary Civil Jurisdiction. Thus, although no period of limitation has been prescribed for an application u/s 31 of the Act, the same will be governed by Article