Hemant Gupta, J.

1. The petitioner has challenged the recovery of the loan amount granted to respondent No. 3 under the Punjab State Aid to Industries Act, 1935 (for short the Act).

2. Vide agreement dated 9.3.1977, a sum of Rs. 5,000/- was advanced as loan to Smt. Satya Sharma, respondent No. 3 for the purpose of development of Foundary Unit. The petitioner has agreed in accordance with Rule 7 of the Rules framed under Section 46 of the Act to stand as surety for the repayment of the said loan.

3. Since there was default by respondent No. 3 to make the payment of the loan amount, the State Government in exercise of the powers conferred under Section 35 of the Act granted sanction to recover the entire amount of loan of Rs. 5,000/- together with penal interest accrued thereon from Satya Sharma as well as surety as arrears of land revenue. After the State Government has ordered to recover the amount as arrears of land revenue a notice was issued by the Assistant Collector II Grade, Union Territory, Chandigarh upon respondent No. 3 but the loan amount was not paid. On 13.1,1982, a notice was served upon the petitioner as well as upon respondent No. 3 for repayment of the loan