The central legal point established is that the Central Act prevails over the State Act, and recovery against guarantors can be made under the 1993 Act.

( 1 ) THE mam question involved in this writ petition is, whether the recovery under the UP Public Moneys (Recovery of Dues) Act, 1972 (the 172 Act)can proceed after insertion of Section 32-G in the State Financial Corporation Act, 1951 (the 1951 Act) and the enactment of the recovery of Debt Due to Bank and financial Institution Act, 1993 (the 1993 Act ). THE FACTS

( 2 ) M/s J S Patel Private Limited (the company) applied for grant of loan from the u P Financial Corporation (the Corporation)on 18-10-1996. The Corporation sanctioned a term loan of Rs 17 crores however, only a sum of Rs 1,42,48,000/- was disbursed to the company on instalments This loan was to be paid in five years The company premises was also mortgaged with the corporation and the entire machinery, goods (finished and unfinished) were hypothecated.

( 3 ) THE Company could not pay the loan the Corporation issued letter dated 23-11-2000 asking the Company to repay the dues failng which it threatened to take action under section 2 of the 1951 Act The Company filed original Suit No 638 of 2000 beiore the civil Judge (Senior Division), Allahabad for injunction against (he recovery along with application for temporary injunction The temporary injunction was granted on 16-2-2001 the Corporation filed an FAFO No 374 of 2001 before this Court against his order and obtained an interim order on 27-3-2001 the Corporation took possession of the factory premises of the Company on 2-3-2001 and advertised for auction of the factory premises on 9 3-2002 We are informed that the auction has been held and possession has been handed over to the purchaser

( 4 ) THE petitioners are guarantors of the loan The Corporation sent a letter to the collector Kanpur Nagar for recovering the amount as arrears of land revenue under the 1972 Act against the petitioners. The tehsildar issued a citation dated 25-1-2002 to the petitioner to appear and pay the re maining amount mentioned therein, hence the present writ petition

( 5 ) IN this writ petition judgment was delivered on 12-7-2002 The Judges differed in their views and the case was referred to the full bench points FOR DETERMINATION

( 6 ) WE have heard counsel for the parties The following points arise for determination in this case

(i) Which Act will prevail in case an Act enacted by the Parliament in pursuance of an entry in list-I of the seventh schedule of the Constitution is contrary to an Act enacted by the State in pursuance of an entry in list-II of the same schedule?

(ii) Whether the 1972 Act has been rendered void and inoperative, after the insertion of Section 32-G in the 151 Act insofar as it relates to recovery of debt payable to the Corporation?

(iii) Whether Section 3 of the 1972 Act is inconsistent with Section 32-G of the 1951 act and if it is so, what is the effect?

(iv) Whether recovery against the guarantor can be made under the 1993 Act

(v) Whether the jurisdiction of the collector to entertain an application of the Corporation for recovery under Section 3 of the 1972 Act of debt not being less than Rs. 10 lacs, is barred by Section 18 of the 1993 act.

(vi) Whether the Corporation having taken possession of the assets and properties of the borrower company under Section 29 of the 1951 Act was bound to exhaust its remedy under the said provision before initiating recovery proceeding against the sureties/guarantors? point number (ii), (iii), (v) and (vi) were framed by the Division Bench in its referring order; the remaining points have been framed by us.

POINT I : THE CENTRAL ACT WILL PREVAIL

( 7 ) PART XI of our Constitution is titled as relations between the Union and the states. Chapter I of this part is legislative relations and deals with distribution of legislative power between the Parliament and the State legislature. Sub-Article (1) of article 246 (Article 246 (1)) of the Constitution states that the Parliament has exclusive power to make laws with respect to the matters enumerated in List I in the