ORDER In these two writ petitions, the petitioners have raised a legal question to the following effect : "Whether in terms of Section 29 of the State Financial Corporations Act, 1951 the Financial Corporation could take over the possession and/or management of the property of the surety secured in favour of the Corporation and could direct the sale or lease of the property of the surety mortgaged/hypothecated to the Corporation ?" 2. The petitioners have placed reliance on the judgment of Honble Karnataka High Court in N. Narasimahaiah v. Karnataka State Financial Corpn., 2003(2) ISJ (Banking) 594 wherein the Honble High Court of Karnataka has laid down as under : "It, therefore, follows that in so far as the property of the surety which is secured in favour of the State Finance Corporation, the remedy of the corporation lies either under Section 31 of the Act or by having recourse to Civil Court and not by recourse to Section 29 of the Act. The remedy available to Financial Corporations against sureties, under Section 31 of SFC Act is also speedy and efficacious remedy. Therefore, non-application of Section 29 to the properties of surety will in no way prejudice the rights of the Financial Corporation against sureties. The corporation can neither take over the possession and/or management of the property of the surety secured in favour of the Corporation nor directing sale or lease the property of the surety mortgaged/hypothecated to the Corporation by exercising the power under Section 29." 3. It has also been pointed out that prior to the decision of Honble Karnataka High Court there had been other decisions i.e. Miss K.T. Sulochana Nair v. M.D. Andhra Pradesh Financial Corporation, AIR 1992 Orissa 157; Surjit Singh v. Haryana Financial Corporation, (1)1999 Banking Cases 86 and Jasbir Kaur v. Punjab State Industrial Development Corporation, 2002(2) ISJ (Banking) 138 holding the view that like in the case of Industrial concern, State Financial Corporations had the power to take over and sell the other mortgaged properties under Section 29 of the SFC Act. 4. The contention of the learned counsel for the petitioners is that the view taken by Andhra Pradesh High Court and this Court was not a correct view. Section 29(1) of the SFC Act is in two parts; first pertaining to take over of management/possession of Industrial Concern alone. 4. The contention of the learned counsel for the petitioners is that the view taken by Andhra Pradesh High Court and this Court was not a correct view. Section 29(1) of the SFC Act is in two parts; first pertaining to take over of management/possession of Industrial Concern alone. Second half of Section 29(1) of the said Act simply provided for the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the State Financial Corporation. Firstly, this part of the sub- section conferred right to transfer and the Legislature had nowhere conferred the "power" of take over with regard to other properties not connected with the industrial concern. This right to take over simply did not extend to properties other than the Industrial Concern although mortgaged. As such, a residential property having nothing to do with the industrial concern could not be taken over and/or sold by a State Financial Corporation on its own i.e. without the assistance of the Court by way of suit or a petition under Section 31 of the SFC Act. 5. At the time of issuing notice of motion the following order was passed by this Court on 19.9.2005 : "In support of the proposition the recourse to Section 29 of the State Financial Corporation Act, 1951 (for short, the Act) cannot be taken by the Corporation in respect of the property mortgaged by Surety, Mr. Ratta, learned counsel for the petitioner has placed reliance on a Division Bench decision of the Karnataka High Court in N. Narasimahaiah v. Karnataka State Financial Corp., 2003(2) ISJ (Banking) 594. Learned counsel submits that in view of the said decision, the decision of this Court in Jasbir Kaur v. Punjab State Industrial Development Corporation, 2002(2) ISJ (Banking) 138 needs reconsideration, particularly when the effect of insertion of sub-clause (aa) in sub-section (1) of Section 31 of the Act has not been considered in the said case. In view of the submission, let notice of motion issue to the respondents to show-cause as to why the petition be not admitted, returnable on 14.12.2005. In the meanwhile, if the subject-property has been auctioned, the sale shall not be confirmed." We have considered the relevant provisions of the Act i.e. Sections 29, 31, 32 (G) of the Act which are to the following effect : "29. In the meanwhile, if the subject-property has been auctioned, the sale shall not be confirmed." We have considered the relevant provisions of the Act i.e. Sections 29, 31, 32 (G) of the Act which are to the following effect : "29. Rights of Financial Corporation in case of default. - (1) 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 or in meeting its obligations in relation 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 or both of the industrial concerns, as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the Financial Corporations. (2) Any transfer of property made by the Financial Corporation, in exercise of its powers under sub-section (1), shall vest in the transferee all rights in or to the property transferred as if the transfer had been made by the owner of the property. (3) The Financial Corporation shall have the same rights and powers with respect to goods manufactured or produced wholly or partly from goods forming part of the security held by it as it had with respect to the original goods. (4) Where any action has been taken against an industrial concern under the provisions of sub-section (1), all costs, charges and expenses which in the opinion of the Financial Corporation have been properly incurred by it as incidental thereto shall be recoverable from the industrial concern and the money which is received by it shall, in the absence of any contract to the contrary, be held by it in trust to be applied firstly, in payment of such costs, charges and expenses and, secondly, in discharge of the debt due to the Financial Corporation, and the residue of the money so received shall be paid to the person entitled thereto. (5) Where the Financial Corporation has taken any action against an industrial concern under the provisions of sub-section (1), the Financial Corporation shall be deemed to be the owner of such concern, for the purposes of suits by or against the concern, and shall sue and be sued in the name of the concern. 31. Special provisions for enforcement of claims by Financial Corporation. - (1) Where an industrial concern, in breach of any agreement, makes any default in repayment of any loan or advance or any instalment thereof or in meeting its obligations in relation to any guarantee given by the Corporation or otherwise fails to comply with the terms of its agreement with the Financial Corporation or where the Financial Corporation requires an industrial concern to make immediate repayment of any loan or advance under Section 30 and the industrial concern fails to make such repayment, then, without prejudice to the provisions of Section 29 of the Act and of Section 69 of the Transfer of Property Act, 1882 (4 of 1882) any officer of the Financial Corporation generally or specially authorised by the Board on this behalf, may apply to the district judge within the limits of whose jurisdiction the industrial concern carries on the whole or a substantial part of its business for one or more of the following reliefs, namely :- (a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation as security for the loan or advance; or (aa) for enforcing the liability of any surety; or (b) for transferring the management of the industrial concern to the Financial Corporation; or (c) 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. (2) An application under sub-section (1) shall state the nature and extent of the liability of the industrial concern to the Financial Corporation, the ground on which it is made and such other particulars as may be prescribed. 32. Procedure of district judge in respect of application under Section 31. (2) An application under sub-section (1) shall state the nature and extent of the liability of the industrial concern to the Financial Corporation, the ground on which it is made and such other particulars as may be prescribed. 32. Procedure of district judge in respect of application under Section 31. - (1) When the application is for the reliefs mentioned in clauses (a) and (c) of sub-section (1) of Section 31, the district judge shall pass an ad interim order attaching the security, or so much of the property of the industrial concern as would on being sold realise in his estimate an amount equivalent in value to the outstanding liability of the industrial concern to the Financial Corporation, together with the costs of the proceedings taken under Section 31, with or without an ad interim injunction restraining the industrial concern from transferring or removing its machinery, plant or equipment. (1A) When the application is for the relief mentioned in clause (aa) of sub- section (1) of Section 31, the district judge shall issue a notice calling upon the surety to show cause on a date to be specified in the notice why his liability should not be enforced. (2) When the application is for the relief mentioned in clause (b) of sub- section (1) of Section 31, the district judge shall grant an ad interim injunction restraining the industrial concern from transferring or removing its machinery, plaint or equipment and issue a notice calling upon the industrial concern to show cause, on a date to be specified in the notice, why the management of the industrial concern should not be transferred to the Financial Corporation. (3) Before passing any order under sub-section (1) or sub-section (2) for issuing a notice under sub-section (1A), the district judge may, if he thinks fit, examine the officer making the application. (4) At the same time as he passes an order under sub-section (1), the district judge shall issue to the industrial concern or to the owner of the security attached a notice accompanied by copies of the order, the application and the evidence, if any, recorded by him calling upon it or him to show cause on a date to be specified in the notice why the ad interim order of attachment should not be made absolute or the injunction confirmed. (4A) If no cause is shown on or before the date specified in the notice under sub-section (1A) the district judge shall forthwith order the enforcement of the liability of the surety. (5) If no cause is shown on or before the date specified in the notice under sub-sections (2) and (4), the district shall forthwith make the ad interim order absolute and direct the sale of the attached property or transfer the management of the industrial concern to the Financial Corporation or confirm the injunction. (6) If cause is shown, the district judge shall proceed to investigate the claim of the Financial Corporation in accordance with the provisions contained in the Code of Civil Procedure, 1908 (5 of 1908) insofar as such provisions may be applied thereto. (6) If cause is shown, the district judge shall proceed to investigate the claim of the Financial Corporation in accordance with the provisions contained in the Code of Civil Procedure, 1908 (5 of 1908) insofar as such provisions may be applied thereto. (7) 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; (da) 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 (da) 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 interests 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 the appeal may be preferred or, if an appeal is preferred, unless the High Court otherwise until the appeal is disposed of. (8) An order of attachment or sale of property under this section shall be carried into effect as far as practicable in the manner provided in the Code of Civil Procedure 1908 (5 of 1908) for the attachment or sale of property in execution of a decree as if the Financial Corporation were the decree-holder. (8) An order of attachment or sale of property under this section shall be carried into effect as far as practicable in the manner provided in the Code of Civil Procedure 1908 (5 of 1908) for the attachment or sale of property in execution of a decree as if the Financial Corporation were the decree-holder. (8A) An order under this section transferring the management of an industrial concern to the Financial Corporation shall be carried into effect, as far as may be practicable, in the manner provided in the Code of Civil Procedure, 1908 (5 of 1908) for the possession of immovable property or the delivery of movable property in execution of a degree, as if the Financial Corporation were the decree-holder. (9) Any party aggrieved by an order under sub-section (4A), sub- section (5) or sub-section (7) may, within thirty days from the date of the order, appeal to the High Court, and upon such appeal the High Court may, after hearing the parties, pass such orders thereon as it thinks proper. (10) Where proceedings for liquidation in respect of an industrial concern have commenced before an application is made under sub-section (1) of Section 31, nothing in this section shall be construed as giving to the Financial Corporation any preference over the other creditors of the industrial concern not conferred on it by any other law. (11) The functions of a district judge under this section shall be exercisable - (a) in a presidency town, where there is a city civil Court having jurisdiction, by a judge of that Court and in the absence of such Court, by the High Court; and (b) elsewhere, also by an additional district judge or by any judge of the principal Court of civil jurisdiction. (12) For the removal of doubts it is hereby declared that any Court competent to grant an ad interim injunction under this section shall also have the power to appoint a Receiver and to exercise all the other powers incidental thereto." 6. The reading of Section 29 of the Act shows that the words used are industrial concern and the power has been bestowed on the Financial Corporation to deal with the property pledged, mortgaged, hypothecated and assigned to it by the industrial concern. The reading of Section 29 of the Act shows that the words used are industrial concern and the power has been bestowed on the Financial Corporation to deal with the property pledged, mortgaged, hypothecated and assigned to it by the industrial concern. It is pertinent to mention here that the legislature specifically used the word obligation for the industrial concern to meet any guarantee given by the Corporation to third party on behalf of the industrial concern. It further used the words right to take over the management and possession of the industrial concern with right to transfer by way of lease or sale. Similarly the words used in Section 31(1) are with regard to the industrial concern, whereas Section 31(1)(aa) was added to this section to bring the surety within the purview of the said section for enforcement of its liability. Section 32 also makes a specific reference to the liabilities against the surety. 7. Under Section 32(G), which is in the nature of execution proceedings, liberty is granted to the Financial Corporation to make an application to the State Government for the recovery of the amount due to it. Thus, the word "surety" would also be included as the recovery is not restricted only from the industrial concern, but to recover the amount due (which can be recovered even from surety). However, under Section 29, prima facie it is only the property of industrial concern which can be taken over by the Financial Corporation and not that of surety. 8. The Division Bench of this Court in Jasbir Kaur v. Punjab State Industrial Development Corporation, 2002(2) ISJ (Banking) 138 has been pleased to hold that the right of the Corporation to recover from the property of guarantor was legal and valid. Para Nos. 14, 16 and 18 of the said judgment read as under : "14. The basic purpose of Section 29 is to ensure a speedy recovery of the public dues. In order to achieve this objective the Corporation has been given the power to take over the industrial unit as also the property which is pledged/mortgaged or hypothecated etc. The provision is not restricted to the property belonging to the industrial concern. Any property which has been mortgaged or pledged can also be taken over. In order to achieve this objective the Corporation has been given the power to take over the industrial unit as also the property which is pledged/mortgaged or hypothecated etc. The provision is not restricted to the property belonging to the industrial concern. Any property which has been mortgaged or pledged can also be taken over. Keeping in view the plain language and the dominant purpose of the provision, we find no reason to give it a restricted meaning. An interpretation which may defeat the object has to be avoided. 16. We are unable to accept this contention. Section 31 makes a provision for enforcement of claims. It is primarily procedural in nature. In any case, the power under Section 31 is "without prejudice to the provisions of Section 29 of the Act." Thus, the power under Section 29 is available irrespective of the mechanism provided under Section 31. Thus, the contention of the counsel cannot be accepted. 18. On a perusal of the judgment, we find that even in this case it was held by their Lordships that "the right given to the Corporation under Section 29 will extend to the property of the surety also." Thus, the decision does not help the petitioners. Still further, we may notice that in Miss K.T. Sulochana Nair v. Managing Director, Orissa State Financial Corporation, AIR 1992 Orissa 157 : 1992 RSJ(Banking) 472 it was inter alia observed that "there cannot be any fetter on the power of the Corporation under Section 29 to take possession of the property of the surety also." A similar view had also been taken by a Division Bench of the Kerala High Court in Thressismma Varghese v. Kerala State Financial Corporation, AIR 1986 Ker. 222. The reading of above judgment would show that reference was made to para No. 9 of the judgment in Munnalal Gupta v. Uttar Pradesh Financial Corporation, AIR 1975 All. 416 (FB). Para No. 9 of the said judgment is reproduced below for ready reference. "The learned Advocate General who appeared for the Corporation, laid emphasis upon Section 29. Section 29, no doubt, defines the rights of the Financial Corporation to take over the management of the industrial concern or realise the mortgage property by way of lease or sale. As we have already mentioned, the right given to the Corporation under Section 29 will extend to the property of the surety also. Section 29, no doubt, defines the rights of the Financial Corporation to take over the management of the industrial concern or realise the mortgage property by way of lease or sale. As we have already mentioned, the right given to the Corporation under Section 29 will extend to the property of the surety also. But such a right can be enforced by taking recourse to the ordinary law contained in the Transfer of Property Act and the Code of Civil Procedure. The special and speedy remedy contained in Section 31 of the Act cannot be availed of by the Corporation. There is no conflict between the two provisions. Section 29 defines the general right of the Corporation in cases of default and Section 31 provides for a speedy and summary remedy. From the scheme of the Act, it is clear that the speedy remedy contained in Section 31 is available not against the surety but against the borrower only. Now, in the instant case the Corporation has sought to avail of the special remedy contained in Section 31. As is evident from Section 32, the reliefs contained in Section 32 can only be granted against the borrower and his property mortgaged with the Corporation. If the Corporation wants to proceed against the property of the surety also, it may do so by taking recourse to the ordinary law." The reading of para 9 of Munnalal Guptas case (supra) shows that Honble Full Bench of the Allahabad High Court was pleased to lay down that if the Corporation is to proceed against the surety it has to take recourse to the ordinary law. 9. It is also pertinent to mention here that after the decision of Honble Full Bench in Munnalal Guptas case Section 31(1)(aa) was added to the statute. 10. The Orissa High Court in Miss K.T. Sulochana Nair v. Managing Director, Orissa State Financial Corporation, AIR 1992 Orissa 157 has taken the view that the property of the guarantor can also be taken over under Section 29 of the Act. In the said judgment also the judgment of Honble Full Bench in Munnalal Guptas case (supra) was distinguished by observing that the said conclusion has been drawn by reading the provisions of Sections 31 and 32 of the Act together and does not apply to action under Section 29 of the Act. In the said judgment also the judgment of Honble Full Bench in Munnalal Guptas case (supra) was distinguished by observing that the said conclusion has been drawn by reading the provisions of Sections 31 and 32 of the Act together and does not apply to action under Section 29 of the Act. The Kerala High Court in Thressismma Varghese v. Kerala State Financial Corporation, AIR 1986 Ker. 222 though was pleased to hold that the property mortgaged by the guarantor to secure the loan would be covered under Section 29 of the Act but the following order was passed : "22. In the light of the above discussion, we hold that the Corporation could proceed against the mortgaged property (that is, property not belonging to the industrial concern but belonging to a third party surety) in an application presented before the District Judge under Section 31 and that application also has to be disposed of in accordance with the procedure contemplated in Section 32. We, therefore, indicate that the duty to issue notice to the surety also can safely be implied." As already referred to above, the High Court of Kerala has taken totally a different view. 11. We may also like to refer to the judgment of Kerala High Court in Joseph v. Kerala Financial Corporation, 1990 ISJ(Banking) 110, wherein it has been laid down as follows : "It is, therefore, clear from this section that the Financial Corporation has the right to convert the property into cash and adjust the same towards the loan. By such transfer the properties would become vested in the transferees as if the transfer was made by the owner of the properties. We should in this connection make specific reference to sub-section (5) of Section 29. It provides that, where the Financial Corporation takes action against an industrial concern under sub-section (1), the Financial Corporation shall be deemed to be the owner of such concern, for the purposes of suits by or against the concern, and shall sue and be sued in the name of the concern. And, therefore, as an owner of the concern, the Financial Corporation has the right to have transactions include sale of the properties of the concern for the purpose of recovery of the amounts due under the loan transactions, without the junction of the Courts. This right will extend to the property of the surety also. And, therefore, as an owner of the concern, the Financial Corporation has the right to have transactions include sale of the properties of the concern for the purpose of recovery of the amounts due under the loan transactions, without the junction of the Courts. This right will extend to the property of the surety also. But that right can be enforced only by taking recourse to the proceedings contemplated under Section 31 or by instituting a regular suit, the reason being that the industrial concern cannot to be said to be the owner of the property belonging to surety." The reading of above judgments shows that a different view has been expressed with regard to the right of Financial Corporation to take over the mortgaged property of the surety for disposing of the same to recover the dues due from the industrial concern. Though this Court has taken a view that property of the guarantor would also be covered under Section 29 of the Act, however, we feel that insertion of sub-clause (aa) in sub-section (1) of Section 31 has not been considered as referred to in the order of motion Bench. Therefore, we feel that it would be appropriate that the matter may be heard and authoritatively decided by the Full Bench. Let the papers be placed before Honble the Acting Chief Justice for constitution of the Full Bench in the matter. Order accordingly.