M/S CHAMUNDESWARI DIAMOND TOOLS (P) LTD. Vs. THE MANAGING DIRECTOR KARNATAKA STATE FINANCIAL CORPORATION AND OTHERS

JUDGEMENT

(1.) The first petitioner is a Company of which the second petitioner is the Managing Director. The petitioner-Company had availed financial assistance to the tune of Rs. 14,15,300/- from the respondent-Karnataka State Financial Corporation (for short 'KSFC'). The loan was sanctioned on 16.04.1996. In this regard, the land along with the factory premises was mortgaged as primary security, while three other immovable properties were mortgaged as collateral security, by the respective owners, as guarantors. While it is an admitted fact that the primary security of the factory and premises along with the machinery was sold by KSFC for recovery of outstanding debt, KSFC has proceeded to recover the balance amount by bringing the other properties for sale, under Section 32(G) of the State Financial Corporation Act, 1951 (for short 'SFC, Act'). The petitioners are before this Court seeking to challenge the initiation of proceedings undertaken by KSFC.

(2.) The prayer in the petition is as follows:

(3.) Sri. Harsha D Joshi, learned counsel for the petitioners has raised the following grounds: