JUDGMENT 1. By way of this petition under Article 226 of the Constitution of India the petitioner-borrower has prayed for an appropriate writ, order or direction quashing and setting aside the impugned notice dated 28/11/2003 issued by respondent no. 1-Gujarat State Financial Corporation in purported exercise of powers under Section 29 of the State Financial Corporations Act, 1951 (hereinafter referred to as “the Act”) and also to direct respondent no. 1-Gujarat State Financial Corporation to remove the seal of the factory and handover possession of the factory back to the petitioner. 2. The facts leading to the present Special Civil Application in a nutshell are as under; 2.1. It appears that the petitioner-Company approached respondent no. 1-Gujarat State Financial Corporation for financial assistance of Rs. 60 lakhs as equity participation upon certain terms and conditions as laid down in the letter of sanction dated 15/04/2007 and it was also further agreed to advance further sum of Rs. 30 lakhs as loan. In furtherance to the same and at the time of making payment of the aforesaid amount of Rs. 60 lakhs as financial assistance, the petitioner executed hypothecation deed dated 20/01/1998 and under the said agreement agreed to repay the aforesaid amount with 27% interest after 11 months but before expiry of 18 months from the date of allotment of shares. Not only that but the property in question of the petitioner-Company also came to be hypothecated and put as security. Even the Directors of the petitioner-Company also gave separate personal guarantee and undertaking to repay the amount and another separate undertaking was also given by the petitioner-Company with respect to the amount of Rs. 30 lakhs, which was by way of advance and/or loan. As the aforesaid amount was not repaid, respondent no. 1-Gujarat State Financial Corporation initiated proceedings to recover the said amount by issuing notice under Section 29 of the Act and the petitioner was called upon to make payment and even the property in question also came to be sealed by respondent no. 1-Gujarat State Financial Corporation. The aforesaid notice was replied by the petitioner-Company by submitting that as the amount of Rs. 60 lakhs was not given on loan, respondent no. 1-Gujarat State Financial Corporation cannot initiate proceedings under Section 29 of the Act to recover the amount in question by exercising powers under Section 29 of the Act. Despite the above reply, respondent no. The aforesaid notice was replied by the petitioner-Company by submitting that as the amount of Rs. 60 lakhs was not given on loan, respondent no. 1-Gujarat State Financial Corporation cannot initiate proceedings under Section 29 of the Act to recover the amount in question by exercising powers under Section 29 of the Act. Despite the above reply, respondent no. 1-Gujarat State Financial Corporation continued the seal applied on the property in question and, therefore, the petitioner-Company has preferred the present Special Civil Application under Article 226 of the Constitution of India for the aforesaid reliefs. 3. Ms. J.K. Mehta, learned advocate appearing on behalf of the petitioner-Company has vehemently submitted that as the amount of Rs. 60 lakhs was given/granted by way of equity participation and was not given by way of loan, respondent no. 1-Gujarat State Financial Corporation could not have initiated the proceedings under Section 29 of the Act for recovery of the amount due and payable by the petitioner-Company and, therefore, it is requested to allow the present petition. No other submissions have been made. 3.1. Ms. Mehta, learned advocate appearing on behalf of the petitioner-Company has relied upon the decision of the Hon'ble Supreme Court in the case of Mahesh Chandra Vs. Regional Manager, U.P. Financial Corporation & Ors reported in AIR 1993 SC 935 and the decision of the Division Bench of this Court in the case of Alka Ceramic, Pipladi, Himatnagar Vs. Gujarat State Financial Corporation & Ors reported in AIR 1990 GUJARAT 105. 4. Shri Munshaw, learned advocate appearing on behalf of respondent no. 1-Gujarat State Financial Corporation has submitted that admittedly Rs. 60 lakhs was advanced/given to the petitioner, which the petitioner agreed to repay by executing the hypothecation deed and agreed to repay the same after 11 months but before expiry of 18 months from the date of allotment of shares with 27% interest and considering the terms and conditions mentioned in the hypothecation agreement, when the said amount has not been repaid by the petitioner-Company, which was due and payable under the said hypothecation agreement, respondent no. 1-Gujarat State Financial Corporation is well within its jurisdiction and hence Gujarat State Financial Corporation has rightly initiated the proceedings under Section 29 of the Act for recovery of the said amount. 1-Gujarat State Financial Corporation is well within its jurisdiction and hence Gujarat State Financial Corporation has rightly initiated the proceedings under Section 29 of the Act for recovery of the said amount. It is further submitted By Shri Munshaw, learned advocate appearing on behalf of the respondent that Section 29 of the Act is very wide and it includes recovery of any amount due and payable by the industrial undertaking, which was advanced under any agreement, which may or may not be even the loan amount and, therefore, it is submitted that when the petitioner-Company has failed to repay and has not paid any amount, which was advanced to the petitioner-Company, which was required to be repaid under the hypothecation agreement, no illegality has been committed by respondent no. 1-Gujarat State Financial Corporation in issuing notice under Section 29 of the Act to recover the said amount and sealing the property of the petitioner-Company in question. 4.1. It is further submitted that even otherwise, considering the fact that the property of the petitioner-Company has been mortgaged and/or hypothecated at the time of advance, the prayer of the petitioner-Company to handover possession of the said property to the petitioner cannot be even otherwise granted and, therefore, it is requested to dismiss the present petition. 5. Heard the learned advocates appearing on behalf of the respective parties at length. The short question, which is posed for consideration of this Court is Whether for any amount due and payable by any industrial concern, which was advanced/given under an agreement other than loan amount, can Gujarat State Financial Corporation exercise powers under Section 29 of the Act to recover the same? 5.1. To consider the above, Section 29 of the Act is required to be considered. Section 29 of the Act reads as under; 29. 5.1. To consider the above, Section 29 of the Act is required to be considered. Section 29 of the Act reads as under; 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 concern, 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 Corporation. (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 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. (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. 5.2. On fair reading of sub-Section (1) of Section 29 it provides that when any industrial concern, which is under a liability to the Financial Corporation under an agreement, makes any default in repayment of any loan and/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 initiate the proceedings under Section 29 of the Act and, therefore for any default in repayment of any loan or advance or any instalment and/or the said industrial concern fails to comply with the terms of the agreement with the Financial Corporation, for such liability and/or non-payment/repayment, Gujarat State Financial Corporation can initiate proceedings under Section 29 of the Act. The contention on behalf of the petitioner that if there is any default in repayment of any amount, which is given by way of loan then and then only Gujarat State Financial Corporation can exercise powers under Section 29 of the Act, has no substance and cannot be accepted. 5.3. On fair reading of sub-Section (1) of Section 29 of the Act when any industrial concern, which is under a liability to the Financial Corporation under an agreement makes any default in repayment of any amount, which was given by way of loan or which was given/advanced under agreement or otherwise fails to comply with the terms of the conditions of the Financial Corporation, Financial Corporation can exercise powers under Section 29 of the Act and, therefore, the liability to the Financial Corporation should be with respect to the amount, which might have been given either by way of loan or advance or the liability is non-payment of any instalment under any agreement and/or when such industrial concern fails to comply with the terms of its agreement with the Financial Corporation. Meaning thereby, for any agreement with the Financial Corporation under which the amount was advanced or given to such industrial concern, an agreement can be by way of hypothecation agreement or in form of mortgage deed or any other agreement under which the amount was advanced or given. Therefore when the amount in question was advanced or given to the petitioner under the hypothecation agreement dated 20/01/1998 under the letter of sanction dated 15/08/2007 and under the said deed of hypothecation, the petitioner agreed to repay the said amount after 11 months but before expiry of 18 months from the date of allocation of the shares with return on investment at 27% per annum and the petitioner agreed to pay the same by filing separate undertaking and furnishing joint as well as personal guarantee and when the petitioner has failed to repay the same and, thereafter, when the proceedings are initiated under Section 29 of the Act by issuing the impugned notice, it cannot be said that such an action is illegal and/or contrary to the provisions of the Act. 5.4 No so far as reliance placed upon the decision of the Hon'ble Supreme Court in the case of Mahesh Chandra (Supra) and the decision of the Division Bench of this Court in the case of Alka Ceramic, Pipladi, Himatnagar (Supra) is concerned, none of the aforesaid decisions would be applicable to the facts of the present case. In the case before the Hon'ble Supreme Court in the case of Mahesh Chandra (Supra) the question was how to exercise the powers under Section 29 of the Act and not with respect to the controversy raised in the present petition. Similarly, the decision of the Division Bench of this Court in the case of Alka Ceramic, Pipladi, Himatnagar (Supra) would not be applicable to the facts of the present case and the controversy in question. 6. In view of the above and for the reasons stated hereinabove, the present petition fails and the same deserves to be dismissed and is accordingly dismissed. Rule is discharged. Ad-interim relief granted earlier, if any, stands vacated forthwith.