JUDGMENT - LODHA R.M., J.:—The applicants, herein have taken exception to the order dated 21-3-1992 passed by the 9th Additional District Judge, Nagpur, in Misc. Civil Application No. 381 of 1991 (Maharashtra State Financial Corporation vs. M/s Rajesh Industrial Corporation), whereby the said Court has rejected the application filed by the applicants, herein for dismissal of the proceedings under sections 31 and 32 of the State Financial Corporations Act, 1951 (for short 'the Act') initiated by the non-applicant herein (hereinafter referred to as 'the Financial Corporation'). 2. Brief facts giving rise to the present controversy are that proceedings under sections 31 and 32 of the Act were initiated by the Financial Corporation against the present applicants Nos. 1 to 3 (for short 'the borrowers') and applicant No. 4 (hereinafter referred to as 'the guarantor') for directions that the borrowers and the guarantor be ordered to make the payment of outstanding debt of Rs. 27,26,436.31 with future interest at the rate of 16.5% with effect from 13-7-1991 and the borrowers and the guarantor be ordered to pay to the Financial Corporation the costs of the proceedings and the expenses incidental to the petition and/or application and the order to be made thereon and/or the same may be tacked on the mortgaged debt, and the Financial Corporation be awarded with such and other reliefs as the nature and circumstances of the case may require. In the application filed under sections 31 and 32 of the Act, it was stated that the Financial Corporation had sanctioned a loan of Rs. 6,80,000/- to the borrowers for the purpose of purchase of plant and machinery as well as construction of factory building, and out of the said loan amount of Rs. 6,80,000/- a sum of Rs. 6,11,000/- was disbursed by the Financial Corporation to the borrowers under the deed of mortgage dated 29-9-1979, and subsequent receipts executed by the borrowers. The remaining balance amount of Rs. 69,000/- was cancelled on 16-3-1984. The loan was repayable within a period of 10 years by 17 half-yearly instalments in the manner provided in the mortgage deed commencing from 20-9-1981, and the subsequent instalments on 20th March and 30th September of each succeeding year and the last of such instalments was payable on 29-9-1989. The remaining balance amount of Rs. 69,000/- was cancelled on 16-3-1984. The loan was repayable within a period of 10 years by 17 half-yearly instalments in the manner provided in the mortgage deed commencing from 20-9-1981, and the subsequent instalments on 20th March and 30th September of each succeeding year and the last of such instalments was payable on 29-9-1989. It was further agreed by the borrowers that they would pay the interest at the rate of 14.5% per annum to be calculated and charged with 6 monthly rests and payable by half yearly payments by 15th June and December in each year, and the first of such payment was to be made on 15th December, 1979. Rest of the terms and conditions were also mentioned in the mortgagee deed and other documents. According to the Financial Corporation, the borrowers failed to adhere to the schedule regarding repayment of the loan as well as the interest due according to the terms and conditions of repayment set out in the mortgage deed and committed the defaults. The guarantor executed an indenture of personal guarantee in favour of the Financial Corporation on 29-9-1979. By the said Deed of Guarantee, the guarantor promised that he would observe all the terms, conditions and covenants contained in the Deed of Guarantee and that guarantee contained in the Deed of Guarantee shall be enforceable against the guarantor as a principal debtor, notwithstanding that the securities specified in the said mortgage deed or any of them shall at the time when proceedings are taken against the guarantor be outstanding or unrealized. In the application under sections 31 and 32 of the Act, the Financial Corporation alleged that a notice under section 29 of the Act was given to the borrowers which was served on them on 3-2-1988 and accordingly possession of the assets of the borrowers Firm was taken by the Financial Corporation on 18-2-1988. At the time of issuance of notice under section 29 of the Act, the borrowers were liable to pay an amount of Rs. 16,84,878/- towards the principal as well as interest due to the Financial Corporation. The Financial Corporation then sold all the plant and machinery after advertising the sale in the newspaper to M/s R.S.A. Polymers, Nagpur, for a total consideration of Rs. 16,84,878/- towards the principal as well as interest due to the Financial Corporation. The Financial Corporation then sold all the plant and machinery after advertising the sale in the newspaper to M/s R.S.A. Polymers, Nagpur, for a total consideration of Rs. 1 lakh and the possession of the plant and machinery was handed over to the said purchaser on 6-2-1991. According to the Financial Corporation, even after the sale of plant and machinery and the land and building, there was a shortfall in the recovery of loan amount payable by the borrowers and the outstanding remained to the tune of Rs. 22,03,186.29 towards interest, Rs. 1,83,774.02 towards expenses and Rs. 1,75,000/- towards principal, in all Rs. 25,61,960.31. The Financial Corporation thereafter through their Counsel issued notice on 11-3-1991 under section 30 of the Act, asking the borrowers as well as the guarantor to discharge the full liability within a week of the receipt of the notice. However, despite the said notice, the amount was not paid, compelling the Financial Corporation to institute the proceeding under sections 31 and 32 of the Act against the borrowers as well as the guarantor. According to the Financial Corporation, on the date of filing of the application under sections 31 and 32 of the Act, the amount of Rs. 27,26,436.31 was outstanding and they were further entitled to future interest at the rate of 16.5 per cent per annum. 3. The borrowers and the guarantor moved an application before the Court for dismissing the application filed by the Financial Corporation under sections 31 and 32 of the Act. The grounds set out in the application for dismissing the application under sections 31 and 32 of the Act are that no money decree can be passed in the proceedings under sections 31 and 32 of the Act against the borrowers as well as the guarantor. 4. The Financial Corporation filed the reply to the said application filed by the borrowers and the guarantor, contested the application and submitted that the proceedings under sections 31 and 32 are tenable and cannot be dismissed as averred by the borrowers and the guarantor. 4. The Financial Corporation filed the reply to the said application filed by the borrowers and the guarantor, contested the application and submitted that the proceedings under sections 31 and 32 are tenable and cannot be dismissed as averred by the borrowers and the guarantor. In para 3 of the reply, it was stated by the Financial Corporation that after the action under section 29 of the Act was taken and the Financial Corporation sought to recover the loan amount by disposing of the assets of the principal debtor and full outstanding could not be discharged, and therefore, necessity of proceedings against the borrowers and the guarantor under sections 31 and 32 of the Act arose. The Financial Corporation asserted that by the application filed by it under sections 31 and 32 of the Act, the amount outstanding against the borrowers and the guarantor is liable to be decreed in its favour. By referring to the amended provision in section 31 of the Act, the Financial Corporation submitted that by enforcing the liability against the guarantor the Financial Corporation has inherent right to recover the dues with the principal debtor. 5. The 9th Additional District Judge, Nagpur after hearing the learned Counsel for the parties, by the impugned order dated 21-3-1992 decided the question that the application filed under sections 31 and 32 of the Act was tenable and the application filed by the borrowers and the guarantor for dismissal of the application under sections 31 and 32 of the Act had no merit. 6. Shri A.S. Jaiswal, learned Counsel for the borrowers and the guarantor, franky conceded that in view of the decision of the Apex Court in (Maharashtra State Financial Corporation v. Jaycee Drugs and Pharmaceuticals Pvt. Ltd. and others)1, 1990(3) Bom.C.R. 1 , the application under sections 31 and 32 of the Act filed by the Financial Corporation for recovery of the amount against the guarantor is maintainable and, therefore, he would not challenge that part of the order, whereby the trial Court has held that such an application under sections 31 and 32 of the Act was maintainable against the guarantor. Shri Jaiswal, however, strenuously urged that in view of the decision of the Apex Court the demand of money by the Financial Corporation in proceedings under sections 31 and 32 of the Act is nothing but a money decree and that cannot be granted in proceedings under sections 31 and 32 of the Act against the borrowers. In this connection, Shri Jaiswal referred to A.I.R. 1978 S.C. 1765, (The Gujarat State Financial Corporation v. M/s Natson Manufacturing Co. Ltd. and others)2, A.I.R. 1987 S.C. 1950, (Everest Industrial Corporation and others v. Gujarat State Financial Corporation)3 and A.I.R. 1994 S.C. 2151, (Andhra Pradesh State Financial Corporation v. M/s GAR Re-Rolling Mills and another)4. Shri Jaiswal submits that so far as passing of money decree against the borrowers under sections 31 and 32 of the Act is concerned, that cannot be passed even after the amendment in section 31 of the Act, whereby Clause (aa) has been inserted. 7. Per contra, Shri Sohoni, learned Counsel for the Financial Corporation, vehemently contended that the proceedings under sections 31 and 32 of the Act are akin to attachment posterior to passing of the decree and, therefore, the Financial Corporation cannot be said to have prayed for money decree in the application under sections 31 and 32 of the Act. Shri Sohoni, therefore, contended that the application filed by the borrowers and the guarantor was wholly misconceived and the trial Court was justified in holding that the application was maintainable and tenable. 8. I have given my thoughtful consideration to the submission made by the learned Counsel for the parties and perused the application filed by the Financial Corporation under sections 31 and 32 of the Act, the application field by the borrowers and the guarantor for dismissal of the application under sections 31 and 32 of the Act, and the reply filed by the Financial Corporation to the application filed by the borrowers and the guarantor. 9. A look at the application under sections 31 and 32 of the Act filed by the Financial Corporation would reveal that the only relief which is sought for in the said application is a direction to the borrowers and the guarantor for payment of outstanding debt of Rs. 27,26,436.31 with future interest at the rate of 16.5 per cent with effect from 13-7-1991 and incidental costs and expenses. 27,26,436.31 with future interest at the rate of 16.5 per cent with effect from 13-7-1991 and incidental costs and expenses. The relief, therefore, makes abundantly clear that the Financial Corporation is seeking the money decree against the borrowers. So far as the provisions of sections 31 and 32 are concerned, it would be seen that in the application under sections 31 and 32 of Act, the reliefs which can be sought for by the Financial Corporation against the borrowers are : “(1) For an order for the sale of property pledged, mortgaged, hypothecated or assigned to the Financial Corporation as security for the loan or advance; (2) For transferring the management of the industrial concern to the Financial Corporation; (3) For an ad interim injunction restraining the industrial concern from non-transferring or removing its machinery or plant or equipment from the premises of the industrial concern, without the permission of the Board where such removal is apprehended.” None of the aforesaid reliefs has been sought for as contemplated under section 31 of the Act by the Financial Corporation. So far as quantification of the amounts is concerned, that has been made under section 31(2) of the Act by the Financial Corporation in its application. As regards the provisions of section 32 of the Act, it may be observed that the said section provides the procedure for disposal of the application under section 31 of the Act. The reliefs which can be sought for by the Financial Corporation under section 31 are the reliefs which are provided in sections 31 and section 32 of the Act only provides the procedure for disposal of the application under section 31 of the Act. The reliefs which can be sought for by the Financial Corporation under section 31 are the reliefs which are provided in sections 31 and section 32 of the Act only provides the procedure for disposal of the application under section 31 of the Act. Section 32(7) of the Act provides that after making an investigation under sub-section (6), the District Judge may— “(a) confirm the order of attachment and direct the sale of the attached property; (b) vary the order of attachment so as to release a portion of the property from attachment and direct the sale of the remainder of the attached property; (c) release the property from attachment; (d) confirm or dissolve the injunction; (d-a) direct the enforcement of the liability of the surety or reject the claim made in this behalf; or (e) transfer the management of the industrial concern to the Financial Corporation or reject the claim made in this behalf : Provided that when making an order under Clause (c), or making an order rejecting the claim to enforce the liability of the surety under Clause (d-a) or making an order rejecting the claim to transfer the management of the industrial concern to the Financial Corporation under Clause (e), the District Judge may make such further orders as he thinks necessary to protect the interest of the Financial Corporation and may apportion the costs of the proceedings in such manner as he thinks fit : Provided further that unless the Financial Corporation intimates to the District Judge that it will not appeal against any order releasing any property from attachment or rejecting the claim to enforce the liability of the surety or rejecting the claim to transfer the industrial concern to the Financial Corporation such order shall not be given effect to, until the expiry of the period fixed under sub-section (9) within which, an appeal may be preferred, or if an appeal is preferred, unless the High Court otherwise directs until the appeal is disposed of.” This provision also is only for the purpose of investigation of the claim filed by the Financial Corporation under section 31 of the Act and by this, it cannot be said that the Financial Corporation can claim money decree against the borrowers. 10. 10. The legal position is no more res integra so far as the relief of money decree by the Financial Corporation against the borrowers is concerned, with reference to the provisions of section 31 of the Act. In Gujarat State Financial Corporation (cited supra), the Apex Court has held as under : “9. Section 31(1) prescribes a special procedure for enforcement of claims by the Financial Corporation. The Corporation is to make an application for the reliefs set out in section 31(1). The reliefs that a Court can grant under section 31(1) are the sale of the property mortgaged, etc. to a Financial Corporation as security for the loan or advance; transfer of the management of the industrial concern to the Financial Corporation or restraining the industrial concern from transferring or removing its machinery or plant or equipment from the premises of the industrial concern without the permission of the Board of the Financial Corporation. An application for such a relief is certainly not a plaint in a suit for recovery or mortgage money by sale of mortgaged property. On a breach of an agreement by an industrial concern the Corporation can seek one or more of the three reliefs set out in section 31(1). If the Corporation seek the relief of transferring the management of the industrial concern to the Financial Corporation it could hardly be said that the application purports to be a plaint for recovering the mortgage money by sale or mortgaged property. It would be inappropriate to say that on an analogy an application under section 31(1) is something akin to a suit by a mortgagee to recover mortgage money by sale of mortgaged property. At any rate, in an application under section 31(1) the Corporation does not and cannot pray for a decree for its outstanding dues. It can make an application for one of the three reliefs, none of which, it granted, results in a money decree, or decree for recovery of outstanding loan or advance. Section 31(1) of the Act, in the circumstances therein set out, permits the Corporation to seek one or more of the three reliefs therein stated.” 11. Reiterating the legal position, the Apex Court in (Everest Industrial Corporation v. Gujarat State Financial Corporation) (cited supra) held as under:- “5. In Gujarat State Financial Corporation v. M/s. Natson Mfg. Co. Section 31(1) of the Act, in the circumstances therein set out, permits the Corporation to seek one or more of the three reliefs therein stated.” 11. Reiterating the legal position, the Apex Court in (Everest Industrial Corporation v. Gujarat State Financial Corporation) (cited supra) held as under:- “5. In Gujarat State Financial Corporation v. M/s. Natson Mfg. Co. (P) Ltd. (supra) no doubt the question involved was whether Court-fee was payable on an application made under section 31 of the Act on an ad valorem basis as if the proceeding was a suit or not. But this Court after analyzing the provisions of the Act held that an application for any of the reliefs that can be granted under the Act was not certainly a plaint in a suit for recovery of mortgage loan and that it was not even something akin to a suit by a mortgagee to recover mortgage money by sale of the mortgage property. The Court held that the applicant in such a case could not pray for a preliminary decree for sale of the property or a final decree for the payment of the money nor it could seek to enforce any personal liability even if such a liability had been incurred under the contract of mortgage as the law stood then. This Court held that the form of the relief to be granted under the Act did not attract Article 1 or Article 7 of Schedule 1 of the Bombay Court-fees Act, 1959, which requires payment of Court-fee on ad valorem basis on any plaint or application in the nature of a plaint instituted for recovery of mortgage amount. Accordingly it held that the demand for payment of ad valorem Court Fee was unsustainable. In the course of its judgment the Court rejected the contention based on sub-section (6) of section 32 of the Act which required a District Judge to apply the procedure of the Code to applications made under section 31 of the Act and ultimately held that the substantive relief in any claim under section 31(1) of the Act was something akin to the relief that could be granted on an application for attachment of property for execution of a decree at a stage posterior to the passing of the decree. The Court further observed that “we are unable to appreciate the view taken by the High Court that the proceeding is not in the nature of execution of the decree because the question of enforcement of the order of attachment or sale would only arise after the same is made absolute under sub-section (7).” Even though in the above decision the question which arose for consideration was whether ad valorem Court-fee was payable on an application under section 31 of the Act as if it was a suit, the Court has decided the said question after determining the true nature of a proceeding instituted under section 31(1) of the Act on a detailed analysis of the provisions of the Act. 6. If as held by this Court the proceeding instituted under section 31(1) of the Act is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of the decree no question of passing any order under section 34 of the Code would arise since section 34 of the Code would be applicable only at the stage of passing of the decree and not at any stage posterior to the decree. It may also be mentioned here that even under the Code the question of interest payable in mortgage suit filed in civil courts is governed by Order 34, Rule 11 of the Code and not by section 34 of the Code which may be applicable only to cases of personal decrees passed under Order 34, Rule 6 of the Code. The High Court was right in holding that interest would be payable on the principal amount due in accordance with the terms of the agreement between the parties till the entire amount due was paid as per the order passed under section 32 of the Act. We hold that the decision of the Karnataka High Court, referred to above, which has applied section 34 of the Code to a proceeding instituted under section 31(1) of the Act is not correctly decided.” 12. We hold that the decision of the Karnataka High Court, referred to above, which has applied section 34 of the Code to a proceeding instituted under section 31(1) of the Act is not correctly decided.” 12. Recently the Supreme Court in A.P. State Financial Corporation v. M/s. GAR Re-rolling Mills and another (cited supra) relying on the decision of the Gujarat State Financial Corporation (cited supra), held as under : “The Court then considering the conspectus of the provisions of sections 31 and 32 of the Act, went on to say that on an application under section 31(1) being made it is obligatory upon the Court to make an interim order attaching the security with or without interim injunction restraining the industrial concern from transferring or removing its plant, machinery or equipment without the permission of the Board of the Corporation. If the relief claimed in the application under section 31 is transfer of management of the industrial concern to the Corporation, the District Judge is also obliged to grant an ad interim injunction and at the same time issue a notice calling upon the defaulting industrial concern to show cause why the interim injunction should not be made absolute. The claim of the Corporation in an application under section 31 is not the monetary claim of its due to be investigated, though it may become necessary to specify the amount for the purpose of determining how much of security should be attached or sold but the investigation of the claim does not involve the raising of all such contentions as are permissible in as money suit. The claim is not a money claim at all. Sub-section (7) of section 32 prescribes the relief which can be granted after investigation under sub-section (6) is made and gives a clue to the nature of the contest between the parties. Sub-section (8) of section 32 prescribes the mode and method for executing the order of attachment or sale of property as provided in the Code of Civil Procedure. Sub-section (7) of section 32 prescribes the relief which can be granted after investigation under sub-section (6) is made and gives a clue to the nature of the contest between the parties. Sub-section (8) of section 32 prescribes the mode and method for executing the order of attachment or sale of property as provided in the Code of Civil Procedure. Indeed, when sub-sections (6), (7) and (8) of section 32 are read together in the context of the provisions of section 31(1) of the Act, in the ultimate analysis, the result may be that the property will be sold for repayment of the loan or advance taken by the industrial concern from the Corporation but even then it cannot be said that it is a substantive monetary relief claimed by the Corporation which can be valued in terms of money in proceedings under section 31 of the Act. The substantive relief under section 31(1) is something in the nature of an application for attachment of property in execution of a decree before the judgment.” 13. Thus, it is clear that it is open to the Financial Corporation to seek for the reliefs against the borrowers only for an order of sale of the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation as security for the loan or advance, or for transferring the management of the industrial concern to the Financial Corporation; or for an ad interim injunction restraining the industrial concern from transferring or removing its machinery or plant or equipment from the premises of the industrial concern without the permission of the Board, where such removal is apprehended and not money decree because the application under section 31(1) of the Act is nothing but an application in the nature of an application for attachment of property in execution of a decree before attachment. As indicated above, the entire perusal of the application filed by the Financial Corporation under section 31 and 32 of the Act would reveal that no relief worth the name which could be granted under section 31 of the Act has been prayed for. The only relief prayed for by Financial Corporation is payment of money which, as has been consistently held by the Supreme Court, cannot be granted in proceedings under section 31 of the Act against the borrowers. 14. The only relief prayed for by Financial Corporation is payment of money which, as has been consistently held by the Supreme Court, cannot be granted in proceedings under section 31 of the Act against the borrowers. 14. In this view of the matter, the trial Court has committed serious error of jurisdiction in holding that the application filed by the Financial Corporation under sections 31 and 32 of the Act for recovery of amount due against the borrowers was maintainable. So far as the application filed by the Financial Corporation against the guarantor/surety for recovery of the outstanding amount of Rs. 27,26,436.31 with future interest and costs is concerned, the same is maintainable. 15. In view of the foregoing discussions, this revision application is partly allowed. The application under sections 31 and 32 of the Act filed by the Financial Corporation seeking money decree against the borrowers is dismissed. The application filed by the Financial Corporation under sections 31 and 32 of the Act against the guarantor/surety is maintainable and the 9th Additional District Judge, Nagpur, is directed to proceed with the said application as expeditiously as possible and in any case the said application shall be disposed of within six months from the date of production of the order from this Court. Order accordingly. Application partly allowed. -----