Hon’ble Ajay Bhanot, J.—Petitioner made a request to the respondent No. 2-U.P. Khadi & Village Industries Board, Lucknow for grant of loan facility to set up a unit for manufacture of handmade hard paper. The respondent-Board acceded to the aforesaid request of the petitioner and sanctioned the loan facility for the aforesaid purpose. A contract was made between the petitioner and the respondent-Board on 31.12.2005 wherein the respondent-Board agreed to disburse a loan to the petitioner to the extent of Rs. 13,50,000/-. The terms and conditions agreed to between the parties and duly embodied in the loan agreement, which bear relevance to the controversy, are reproduced hereunder:

“2. The Hypothecated property is hypothecated as security by way of first charge [unless property is already hypothecated with a State Government or Khadi & Village Industries Commission in which case the lender will have a second charge on the hypothecated property and if one of them has a second charge the lender will have the next charge] for the due repayment by the Borrower/s to the lender