Judgment :- 1. This civil miscellaneous appeal is directed against the order of the learned Principal District Judge, Coimbatore dated 30.07.2002 made in T.S.F.C.O.P.No.38 of 1997 on the file of the said court. 2. The respondents 3 to 5 in the above said OP on the file of the court below have filed this civil miscellaneous appeal under Section 32(9) of the State Financial Corporation Act, 1951. 3. The facts leading to the filing of the appeal, in brief, are as follows:- a) Tamil Nadu Industrial Investment Corporation Ltd., the respondent herein had filed T.S.F.C.O.P.No.38 of 1997 on the file of the Principal District Judge, Coimbatore against the appellants 1 to 3 herein and two other persons presumably under Section 31(1)(aa) of the State Financial Corporations Act, 1951 for enforcement of the liability of one Natarajan arrayed as respondent no.2 and respondents 3 to 5 (the appellants herein) respectively in the said O.P. in their capacity as sureties. b) M/s.Everbright Spinners (P) Ltd., a private limited company, and the directors of the said company, namely the appellants herein and one N.Natarajan, had been arrayed in the above said original petition before the court below as respondents 1 to 5. The said company was manufacturing cotton yarn and for the said business the respondent corporation sanctioned a term loan of Rs.16,00,000/-for the purpose of purchase and erection of machineries and for the construction of additional factory building, office block, toilet, etc. in the factory premises in Survey No.45, Sundakkamuthur Village, Coimbatore. As per the terms of the agreement, the loan was to be repaid in 12 half yearly installments, after the initial holiday period of 18 months from the date of disbursement of the loan, along with an interest at the rate of 15.5% per annum. c) The appellants herein and yet another director of the company by name Natarajan, on behalf of the company, executed a registered mortgage deed in favour of the respondent corporation on 08.05.1985 for a sum of Rs.50,000/-mortgaging the land and building situated in Survey No.45 in Sundakkamuthur Village, Coimbatore. The balance amount of Rs.15,50,000/-was secured by an equitable mortgage created by deposit of title deeds relating to the above said properties of the company and a memorandum of deposit of title deeds was executed in favour of the respondent corporation on 09.05.1985. The balance amount of Rs.15,50,000/-was secured by an equitable mortgage created by deposit of title deeds relating to the above said properties of the company and a memorandum of deposit of title deeds was executed in favour of the respondent corporation on 09.05.1985. The plant and machineries of the company were also hypothecated in favour of the respondent corporation under a hypothecation deed dated 08.05.1985. In addition to that, the Directors of the company (Natarajan and the appellants herein) stood sureties and guaranteed the due repayment of the loan availed by the above said company by executing a deed of guarantee on 08.05.1985. As the company committed default in making repayment of the loan, under Section 29 of the State Financial Corporation Act, 1951, the mortgaged assets of the company were sold in public auction for a sum of Rs.20,00,000/-on 25.08.1994 and the same was appropriated by the respondent corporation towards the amount due from the company. The said sale was confirmed after the appellants herein and the first respondent in the OP (Everbright Spinners (P) Ltd.) gave their consent for the confirmation of the sale. Even after realising the said amount, there was a balance of Rs.51,33,323.61P as on the date of filing of the original petition as per the accounts maintained by the respondent corporation. Therefore the above said OP was filed for enforcing the liability of the appellants herein and Natarajan, all directors of M/s.Everbright Spinners (P) Ltd., as sureties. It was also claimed in the OP that the liability of the sureties should be enforced by directing them to pay the above said amount of Rs.51,33,323.61P together with subsequent interest at the rate of 16% per annum from the date of petition till realisation. 4. It was also claimed in the OP that the liability of the sureties should be enforced by directing them to pay the above said amount of Rs.51,33,323.61P together with subsequent interest at the rate of 16% per annum from the date of petition till realisation. 4. The 4th respondent in the OP, the 2nd appellant herein filed a counter on behalf of the respondents in the OP and resisted the same contending that originally a partnership firm consisting of the appellants and Natarajan as partners under the name and style of "Everbright Spinners" was carrying on the business of manufacturing cotton yarn; that when the firm approached the respondent corporation for financial aid, the respondent corporation advised the partners of the said firm to convert the partnership business into that of a private limited company so as to enable the respondent corporation to advance loan to it and that accordingly the partnership was converted into a private limited company. It was the further contention raised in the counter statement that though a sum of Rs.16,00,000/-was sanctioned as financial assistance to the above said company by the respondent corporation, the actual amount disbursed was only Rs.14,88,000/-; that in view of the failure on the part of the Indian Overseas bank to disburse sufficient amount for working capital, the companys unit at the inception itself became sick; that despite recommendation by the state level committee, the said bank and the respondent corporation failed to advance any amount for working capital; that because of the omission to mention blow room machineries worth about Rs.10,00,000/- the assets of the company fetched only a sum of Rs.20,00,000/-in the auction; that having already recovered more than the principal amount, the respondent corporations claim of Rs.51,33,323.61P towards interest was not justifiable and that since the loan itself was foreclosed on 20.01.1990, the claim of balance was barred by limitation and that hence the petition for enforcement of the sureties liability filed under Section 31(1) of the State Financial Corporation Act, 1951 was also barred by limitation. 5. The court below framed two points for determination:-(1) whether the claim is barred by limitation? and (2) whether the corporation is entitled to a decree as prayed for against the sureties? 6. In the enquiry, P.W.1 was examined and Ex.A1 to A17 were marked on the side of the respondent/petitioner corporation. 5. The court below framed two points for determination:-(1) whether the claim is barred by limitation? and (2) whether the corporation is entitled to a decree as prayed for against the sureties? 6. In the enquiry, P.W.1 was examined and Ex.A1 to A17 were marked on the side of the respondent/petitioner corporation. R.W.1 was examined and Ex.B1 was marked on the side of the respondents in the OP before the court below. The court below, after considering the pleadings and evidence, came to the conclusion that the relief sought for against the sureties was not barred by limitation. Ultimately, disallowing the claim of Rs.45,469.06P on the heading "other dues", the court below held that a sum of Rs.50,87,854.01P was due up to the date of petition (excluding the disallowed sum of Rs.45,469.06P claimed under the heading other dues) from the principal debtor, namely the above said company and that the respondents 3 to 5 in the OP/appellants 1 to 3 in the appeal being the sureties as per the guarantee deed were liable to pay the said amount to the appellant corporation with future interest at the rate of 12% per annum and that the said liability of the appellants herein as sureties has got to be enforced. Accordingly a decree was passed directing the respondents 3 to 5 in the OP (appellants herein) to pay the respondent herein a sum of Rs.50,87,854.01 with future interest at the rate of 12% per annum from the date of OP till the date of realisation with proportionate litigation cost and the said decree was passed purporting to enforce the liability of the sureties, namely the appellants herein. The above said order of the learned Principal District Judge dated 30.07.2002 is challenged in this civil miscellaneous appeal on various grounds set out in the memorandum of appeal. 7. This court heard the submissions made by Mr.A.S.Vijayaragavan, learned counsel for the appellants and Mrs.Rita Chandrasekaran, learned counsel for the respondent. The materials available on record were also perused. 8. The learned counsel for the appellants submitted that a petition under Section 31 of the State Financial Corporation Act, 1951, by no stretch of imagination construed to be a suit; that the said OP should be construed to be a preceding analogous to execution proceedings and that hence the court below should not have ventured to pass a decree against the appellants herein. According to the learned counsel for the appellants, the court in which the petition under Section 31(1) and Section 31(1)(a)(aa) of the State Financial Corporation Act, 1951 has the limited power of enforcing the securities for the realisation of the loan amount due to the State Financial Corporation; that the same postulates the determination of the amounts before ever the petition under Section 31 (1)(aa) of the State Financial Corporations Act, 1951 could be moved and that in a petition under Section 31 of the State Financial Corporations Act, 1951, the court is not supposed to make an adjudication as to the amounts due to the corporation and pass a money decree. In support of the above contention, the learned counsel for the appellants relied on the following judgments as precedents:- (i) M/s.O.K.Gaur & Company and another V. Rajasthan Finance Corporation reported in AIR 2001 RAJASTHAN 4; .(ii) M/s.Prakash Playing Card Manufacturing Co., Delhi and others V. Delhi Financial Corporation, New Delhi reported in AIR 1980 DELHI 48; (iii) The Maharashtra State Financial Corporation V. M/s.Jaycee Drugs & Pharmaceuticals Pvt. Ltd. and others reported in AIR 1991 BOMBAY 96; AND (iv) M/s.Kril Fine Art, Chandrapur others V. The Maharashtra State Financial Corporation having its Head Office at Bombay and branch office at Chandrapur through its Branch Manager reported in AIR 1998 BOMBAY 207. Of course in the first of the above said cases relied on by the learned counsel for the appellant, a learned single judge of the Rajasthan High Court has held as follows:- " it can be said without hesitation that on an application under Section 31 of the State Financial Corporations Act, 1951, a decree for money cannot be passed because the reliefs which can be granted under Section 32 are against the property whereas a money decree is to be passed by the Civil Court against the concerned person i.e., the judgment-debtor." Similarly in the second of the above said judgments relied on by the learned counsel for the appellant, a learned single judge of the Delhi High Court has observed as follows:- " An application under Section 31 carries the little information provided for in Section 31 (2) and does not contain the several details prescribed for a plaint under the Code of Civil Procedure." In the third judgment relied on by the learned counsel for the appellant, a division bench of the Bombay High Court dealing with the meaning of the words "enforcing the liability of any surety" occurring in Sections 31 and 32 of the State Financial Corporations Act has held that a claim for passing a decree for recovering money against sureties who have not furnished any property as security cannot be entertained under Section 31(1) read with Section 32. Similarly, in the fourth judgment relied on by the learned counsel for the appellants, Justice V.S.Sirpurkar, as he then was, sitting in the Nagpur Bench of Bombay High Court, expressed the very same view that the court, in an application under Section 31 of the State Financial Corporations Act, 1951 could not pass an order directing any payment to the Corporation by way of an independent relief. 9. All the above said judgments relied on by the learned counsel for the appellants, have been cited to show that an application filed under Section 31 of the State Financial Corporations Act against the principal-debtor or the sureties who have not given securities have to be treated as applications for enforcement of such securities and the application under the said Section cannot lead to a decree for payment of money. 10. 10. However, the learned counsel for the respondent has submitted that all those judgments relied on by the learned counsel for the appellant so far as the enforcement of the liability of the surety is concerned, has been overruled by the Honble Supreme Court in Karnataka State Financial Corporation V. Narasimiah and others reported in 2008(4) Scale 473 and that hence the liability of the surety in terms of money can be fixed and the surety can be directed to pay the amount found due in an application filed under Section 31 of the State Financial Corporations Act. 11. The learned counsel for the respondent also relied on a judgment of a learned single judge (Justice A.S.Naidu) of Orissa High Court in Orissa State Financial Corporation Vs.Ramesh Chandra Behera and another reported in AIR 2003 ORISSA 30. In the above said case the learned judge made the following observations:- " The liability of a surety is co-extensive with that of the principal debtor and a decree can be executed either against the principal debtor or the surety, at the discretion of the creditor. However, where the surety is made to discharge such liability of the principal debtor, such surety has got a right to be reimbursed by the principal debtor. Section 31 of the Act, contemplates several relies which can be granted on the basis of an application of a Financial Corporation. However before passing an order under any of the clauses i.e. (a), (aa), (b) and (c) of Section 31(1), it is incumbent upon the District Judge to find out the liability of the principal debtor first, and only after being satisfied about the liability of the principal debtor, i.e. the industrial concern, and regarding the default in payment of any loan or advance as envisaged under Section 31(1) has to pass appropriate order granting reliefs in accordance with the various clauses enumerated in Section 31(1). Though there is no provision in Section 31 to enforce the personal liability of an industrial concern, a cumulative reading of the Section leads to the conclusion that there is no bar to decide about such liability. Thus order allowing Corporation to proceed against surety without finding out the liability of the principal debtor, is not proper" 12. Though there is no provision in Section 31 to enforce the personal liability of an industrial concern, a cumulative reading of the Section leads to the conclusion that there is no bar to decide about such liability. Thus order allowing Corporation to proceed against surety without finding out the liability of the principal debtor, is not proper" 12. Furthermore, the judgment of the Division Bench of Bombay High Court in "The Maharashtra State Financial Corporation v. M/s.Jaycee Drugs & Pharmaceuticals Pvt. Ltd. and others reported in AIR 1991 Bombay 96 relied on by the appellant was challenged before the Supreme Court and the appeal was heard by a three judge bench of Supreme Court in which by a majority view of 2:1, the saidf judgment of the Division Bench of the Bombay High Court was set aside. As per the majority view, Section 31(i) (aa) is attracted for the enforceability of not only the surety who has given any property as security but also in respect of the surety who has give only personal guarantee and not any property in security. It was also held that the courts order under the above said section for the enforcement of personal liability of the surety shall be in the nature of a money decree and that even in the absence of Section 46-B, provisions of C.P.C. would be applicable. In view of the said judgment the view expressed by the learned single judge of the Bombay High Court in M/s.Kril Fine Art, Chandrapur others V. The Maharashtra State Financial Corporation having its Head Office at Bombay and branch office at Chandrapur through its Branch Manager reported in AIR 1998 BOMBAY 207 also does not reflect the correct position of law in this regard. 13. In Karnataka State Financial Corporation Versus N.Narasimahaiah and Others reported in (2008) 5 Supreme Court Cases 176, the Honble Supreme Court made it clear that the relief available under Section 29 of the State Financial Corporations Act is different from the relief available under Section 31 of the Act and that Section 29 cannot be invoked against the surety. 13. In Karnataka State Financial Corporation Versus N.Narasimahaiah and Others reported in (2008) 5 Supreme Court Cases 176, the Honble Supreme Court made it clear that the relief available under Section 29 of the State Financial Corporations Act is different from the relief available under Section 31 of the Act and that Section 29 cannot be invoked against the surety. The Supreme Court also observed that Section 32(1-A) inserted by 1985 amendment along with Section 31(1)(aa) can be invoked against the surety and that Section 32(4-A) empowers the court to forthwith order the enforcement of the liability of the surety if no cause is shown on or before the date notified by the parties. The following were the observations made by the Supreme Court in this regard:- " Section 32 of the Act provides for the procedure in respect of the proceedings before the District Judge on applications under Section 31; sub-section (1-A) whereof reads as under: "32.(1-A) 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." For enforcing a claim envisaged under Clause (aa) of sub-section (1) of Section 31 of the Act, a special procedure has been laid down in sub-section (4-A) of Section 32 which reads as under: "32.(4-A) If no cause is shown on or before the date specified in the notice under subsection (1-A), the District Judge shall forthwith order the enforcement of the liability of the surety." Section 32-G of the Act, which was also inserted by Act 43 of 1985, provides for yet another additional remedy to a financial corporation in the following terms: "32-G. Recovery of amounts due to the Financial Corporations as an arrear of land revenue. — Where any amount is due to the Financial Corporation in respect of any accommodation granted by it to any industrial concern, the Financial Corporation or any person authorised by it in writing in this behalf, may, without prejudice to any other mode of recovery, make an application to the State Government for the recovery of the amount due to it, and if the State Government or such authority, as that Government may specify in this behalf, is satisfied, after following such procedure as may be prescribed, that any amount is so due, it may issue a certificate for that amount to the Collector, and the Collector shall proceed to recover that amount in the same manner as an arrear of land revenue." It was further observed by the Honble Supreme Court in the very same judgment in paragraph 32 as follows:- "2. Section 31 of the Act provides for the reliefs which may be sought for by the corporation strictly in terms thereof. Clause (aa) of sub-section (1) of Section 31 of the Act provides for a final relief. It does not speak of any interlocutory order. Clause (aa), as noticed hereinbefore, has been inserted by Act 43 of 1985. Thus, prior thereto even Section 31 could not have been taken recourse to against a surety. Such a relief, if prayed for, would also lead to grant of a final relief and not an interlocutory one." 14. In an earlier case, namely A.P.State Financial Corpn. v. Gar Re-Rolling Mills reported in (1994) 2 SCC 647 , it was observed as follows: "If the Corporation chooses to take recourse to the remedy available under Section 31 of the Act and pursues the same to the logical conclusion and obtains an order or decree, it may thereafter execute the order or decree, in the manner provided by Sections 32(7) and (8) of the Act. The Corporation, however, may withdraw or abandon the proceedings at that stage and take recourse to the provisions of Section 29 of the Act." 15. The Corporation, however, may withdraw or abandon the proceedings at that stage and take recourse to the provisions of Section 29 of the Act." 15. In view of the emphatic pronouncement of the law in this regard in all the above said cases, especially in (1991) 2 SCC 637 , namely The Maharashtra State Financial Corporation V. M/s.Jaycee Drugs & Pharmaceuticals Pvt. Ltd. and others to the effect that in an application filed under Section 31(1)(aa) of the Act for enforcing the liability of the surety who has given only personal guarantee the courts order for enforceability of the surety will be in the nature of money decree the contentions of the learned counsel for the appellant that the court dealing with a petition under Section 31(i)(aa) cannot pass any order in the nature of a money decree has got to be discountenanced. The following are the observations made by the Honble Supreme Court in the said case:- " In our opinion, on the same principle, even in a case where the relief claimed in the application under Section 31(1) of the Act is for enforcing the liability of a surety who has given only a personal guarantee, sub-section (4-A) of Section 32 where no cause is shown and clause (da) of sub-section (7) where cause is shown contemplate cutting across and dispensing with the provisions of the Code from the stage of filing a suit to the stage of obtaining a decree against the surety, the passing of an order which can straightway be executed as if it were a decree against the surety which may be passed in the event of a suit being filed. As seen above, sub-section (2) of Section 31 enjoins upon the Financial Corporation to state the "extent of the liability of the industrial concern" in the application to be made under sub-section (1) thereof. Since the liability of the surety is co-extensive the same shall, in the absence of anything contrary in the surety bond, be the liability of the surety also. In a case where there is any provision confining the liability of the surety, the extent of the liability to be shown in the application shall be such as in conformity with the surety bond. In a case where there is any provision confining the liability of the surety, the extent of the liability to be shown in the application shall be such as in conformity with the surety bond. When no cause is shown by the surety on being served with the show cause notice the order which will be passed under sub-section (4-A) of Section 32 would be for the enforcement against the surety of that liability which is stated in the application. Where, however, cause has been shown by the surety the extent of his liability shall be determined as contemplated in sub-section (6) of Section 32 and it is the liability so determined which shall be enforced under clause (da) of sub-section (7) of Section 32. It does not require any elucidation that the extent of the liability referred to above will necessarily have to be in the very nature of things in terms of monetary value even though it may not be possible to call it a decree stricto sensu as defined in Section 2(2) of the Code for recovery of money." 16. It is quite obvious that, for enforcing the liability of the surety, it is mandatory to give a finding regarding the extent of liability of the principal debtor so as to fix the extent of liability and by its very nature such an order fixing the liability shall be in the nature of an order or decree for payment of money. If at all the liability of the surety is not ascertained and fixed by the court, enforcing the liability of the surety shall be impracticable and impossible. This court is of the considered view that Section 31(1)(aa) will be redundant, so far as enforceability of the liability of the surety who has not given any security and given only personal guarantee is concerned, if the contention of the appellants is accepted for the simple reason that enforcing the liability of the surety without fixing his liability in terms of money will be quite impossible. Therefore the contention of the appellant that the District Judge dealing with an application under Section 31(1)(aa) cannot adjudicate upon the liability of the surety and pass an order in the nature of decree directing the surety to pay the said amount, has got tobe discountenanced. Therefore the contention of the appellant that the District Judge dealing with an application under Section 31(1)(aa) cannot adjudicate upon the liability of the surety and pass an order in the nature of decree directing the surety to pay the said amount, has got tobe discountenanced. The learned counsel for the appellants has also raised a contention that the claim against the appellants towards interest alone after having collected the principal is not maintainable in law. The normal practice is that in the absence of any understanding between the parties, the amount paid by the debtor, shall be at the first instance appropriated towards interest and thereafter towards principal. In this case even though the amount due was stated to be representing the interest, the contract being for payment of compound interest, compounded at a fixed interval, the outstanding amount, namely principal plus interest shall be taken as the principal. Therefore, this court finds no substance in the above said contention raised by the appellants. The court below has correctly fixed the liability as per the accounts produced and proved to be maintained properly in the ordinary course of business of the respondent. Therefore no interference can be made on the said ground also. As the above said grounds alone happened to be the grounds on which the order of the District Judge passed in T.S.F.C.O.P.No.38 of 1997 is challenged in this appeal, this court finds no merit in the appeal and comes to the conclusion that the appeal deserves to be dismissed. 17. In the result the civil miscellaneous appeal No.2440 of 2002 is dismissed. However, there shall be no order as to cost.