Mr. Hemant Gupta, J.: - I. The Subject of Reference

The present writ petition came up before the Division Bench of this Court on 2.11.2011. The challenge in the writ petition is to action taken by the State Financial Corporation against the petitioner under Section 29 of the State Financial Corporation Act, 1951 (for short ‘the Act’) being guarantor. The learned counsel for respondent No.1 relied upon a Division Bench judgment of this Court reported as M/s Aggarwal Overseas Limited Vs. State of Haryana and others 2008(4) PLR 772 and also the Full Bench judgment of this Court reported as Paramjit Singh Ahuja Vs. Punjab State Financial Industrial Development Corporation Limited & others 2006 (2) PLJ 480 to contend that the State Financial Corporation can proceed against the guarantor under Section 29 of the Act. The question of law in respect of the scope of Section 29 of the Act in view of the judgment of the Supreme Court in Karnataka State Financial Corporation Vs. N. Narasimahaiah & others (2008) 5 SCC 176 reads as under:

“Whether a clause in the deed of guarantee, entitle a financial corporation to proceed against the Guarantors including mortgagors to realize its dues