KARNATAKA STATE FINANCIAL CORPORATION Vs. SRI H.I. SHAMSHUDDIN, SRI BASAVEGOWDA, SRI H.S. MOHAMMAD JAFRULLA AND SRI JAYARAJU

JUDGEMENT

(1.) THE legality and correctness of the order passed by the learned Single Judge in W.P. No. 3397/2008, dated 17.06.2010, is called in question in this appeal. Shri. H.S. Mohammad Jafrulla, the third respondent, had availed two loans for purchasing two buses from the appellant from its earlier owners. The loans were transferred to the 3rd respondent and the writ petitioner became a surety for the loan advanced by Karnataka State Financial Corporation (for short 'KSFC') in favour of Shri. H.S. Mohammad Jafrulla on the ground that if Shri. H.S. Mohammad Jafrulla failed to discharge the loan, the property of the surety was taken over by the KSFC under Section -29 of the KSFC Act and based on the same, the property of the writ petitioner came to be sold in favour of Sri. Basave Gowda, the second respondent in this appeal.

(2.) CHALLENGING the legality and correctness of the sale deed executed by the KSFC in favour of Sri. Basave Gowda on 12.02.2008, the writ petition came to be filed contending that the KSFC cannot sell the property of the surety by exercising power under Section -29 of the KSFC Act, without exhausting its remedy by proceeding against the principal borrower at the first instance.

(3.) WE have heard the learned counsel for the parties.