( 1. ) THE short question that arises for consideration in the present writ petition is, whether the right conferred to the Financial Corporation under Section 29 of the State Financial Corporation Act (for short called "the Act") extends over the property mortgaged with the Corporation by a guarantor or not? To appreciate the issue, few facts need to be taken note of.

( 2. ) THE petitioner had mortgaged his property for securing a term loan that had been granted by the Corporation (Respondent No. 1) in favour of respondent No. 2 for setting up of some Industrial Unit. As the loanee did not pay up the instalment dues, the Corporation served the notice on the petitioner (Annexure-E) calling upon him to clear the demanded dues with interest failing which the properties mortgaged by the petitioner in favour of Corporation should be taken over, it is against this action of the Corporation, the petitioner has felt aggrieved and filed this writ. Notice of the writ was issued to respondents. They are served and represented so far as respondent No. 1 is concerned. As far as respondent No. 2 is concerned, they are principal borrower and happens to be the son of petitioner.

( 3. ) HEARD Shri P. V. Bhagwat, learned Counsel for the petitioner and Smt. Ritu Bhargav, learned Counsel for the respondent No. 1.

( 4. ) MR. Bhagwat appearing for the petitioner raises the sole contention that under Section 29 of the Act, the Corporation can take possession of the property of the loanee (respondent No. 2) but not the property of the guarantor. Learned Counsel in support of this contention placed reliance on a decision of the Allahabad High Court in the case of Munnalal Gupta v. Uttar Pradesh Financial Corporation AIR 1975 All. 416. Learned Counsel also contended that when the Corporation has in their possession the property of loanee then they ought not to have proceeded against the petitioners property. In reply learned counsel for the respondent while defending the impugned action placed reliance on a decision of Orissa High Court in the case of Miss K. T. Sulochana Nair v. Managing Director, Orissa State Financial Corporation, AIR 1992 Ori. 157 and contended that the issue sought to be raised by the petitioner stands decided by the Orissa High Court against the petitioner and hence, petition be dismissed.

( 5. ) HAVING heard the learned Counsel for the parties and having perused the record of the case, I am of the considered opinion that this petition has no merit and hence, it deserves dismissal.

( 6. ) IN my considered opinion, the question raised in this petition has been decided by the Orissa High Court against the petitioner in the case of K. T. Sulochana Nair (supra) wherein identical question was raised. The Division Bench of the High Court presided over by Justice G. B. Patnaik (as his Lordship then was the Judge of Orissa High Court and later became former Chief justice of India) speaking for the Bench expressly overruled the submission of writ petitioner and held as follows :-

"4. In view of the rival stands of the parties, the sole question that arises for consideration is whether a guarantors property which had been mortgaged with the Corporation can be taken possession under Section 29 of the Act when the loanee did not pay up the loan amount. To appreciate the contention raised, it would be appropriate to extract Section 29 (1) of the Act:-where any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof for in meeting its obligation in relations to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the Financial Corporation, the Financial Corporation shall have the right to take over the management or possession of both of the industrial concern as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecate