The main legal point established is that the action against the guarantor under section 29 of the State Financial Corporations Act, 1951, is valid if there is an express acceptance in the bond of guarantee.

J.S. Khehar, J. - M/s San Components Limited had taken term loan of Rs. 1.50 crores from Haryana State Industrial Development Corporation Limited (hereinafter referred to as "HSIDS") on 5.2.2002. M/s Aggarwal Overseas Limited i.e. the petitioner in the instant writ petition signed a bond of guarantee dated 5.2.2002, offering security of its immovable properties. This guarantee was given to secure the loan sanctioned by the HSIDC to M/s San Components Limited.

2. The HSIDC issued a notice dated 19.12.2005 under Section 29 of the State Financial Corporation Act, 1951 to M/s San Components Limited as also to Smt. Neelam Aggarwal and Sanjay Mohan Aggarwal asserting that an amount of Rs. 153.59 lacs was outstanding against M/s San Components Limited as on 31.10.2005. It was also asserted therein that M/s San Components Limited as making persistent default as a consequence whereof the primary security of the industrial unit was taken over under Section 29 of the State Financial Corporation Act, 1951 and put to sale wherein the HSIDS had received a bid of Rs. 67 lacs, which it had decided to confirm. However, M/s Sam Components Limited had challenged the action initiated by the HSIDC under Section 29 of the State Financial Corporations Act, 1951, before this Court. This Court ordered the HSIDC not to confirm the said sale without its approval. It was also brought out that in view of the aforesaid, the sale of the unit of M/s San Components Limited had not yet been confirmed in favour of the highest bidder. It was also brought out that since the aforesaid sale proceeds would not be sufficient towards the amount recoverable from M/s San Components Limited, the HSIDC had decided to issue a notice to the guarantors of the company before taking over collateral security pledged to the HSIDC. The guarantors were accordingly required to clear the arrears within 14 days failing which it was asserted that the pledged securities would be taken over under Section 29 of the State Financial Corporations Act, 1951, and the same would be put up for sale in due course.

3. Through another communication dated 14.8.2006, HISIDC informed the guarantors that collateral securities taken over under section 29 of the Sate Financial Corporations Act, 1951, had been advertised for sale for realising the recoverable balance.

4. The petitioner approached the Delhi High Court by filing CWP (Civil) No. 13647 of 2006, challenging the action of the HSIDC in taking over the properties of the petitioner under section 29 of the State Financial Corporation Act, 1951. It was canvassed before the Delhi High Court that the properties of the guarantors could be taken over in terms of the procedure stipulated under sections 31 and 32 of the State Financial Corporations Act, 1951. On 21.9.2006, the Delhi High Court passed an interim direction to the effect that any sale of the properties of the petitioner under section 29 of the State Financial Corporations Act, 1951, would be subject to the decision in the said writ petition. However, when the aforesaid writ petition came up for consideration on 4.3.2008, the counsel representing the petitioner stated that the Delhi High Court had no jurisdiction to deal with the matter and the jurisdiction in the matter was vested in this Court. The petitioner was accordingly permitted to withdraw the aforesaid writ petition on 4.3.2008.

5. After withdrawing the writ petition filed in the Delhi High Court the petitioner approached this Court. The submission advanced at the hands of the petitioner even before this Court, is the same as it was before the Delhi High Court namely, that the action initiated by the HSIDC against the petitioner under section 29 of the State Financial Corporations Act, 1951, was without jurisdiction. According to the petitioner, the petitioner being a guarantor, action could only be taken against the petitioner under the provisions of sections 31 and 32 of the State Financial Corporations Act, 1951.

6. In o