RAMANNA Vs. KARNATAKA STATE FINANCE CORPORATION

JUDGEMENT

(1.) 1. The petitioner has challenged the validity of section 29 of the State Finance Corporation Act 1951 (Central Act 63 of 1951) (hereinafter referred to as the 'Act') as ultra vires ; confers unguided and unbriddled power on Corporation to deprive possession of the property by a debtor and more ownerous than the normal procedure prescribed for recovery of a debt.

(2.) Section 29(1) reads thus :-

(3.) Two objects intended to be achieved are (i) to take possession of the property for realisation of debt out of rents/profits/proceeds and (ii) to sell the property to realise the debt. Firstly, such rights are analogous to various rights of a mortgagee as are conferred under the Transfer of Property Act Simple mortgagee has a right to bing the property for sale ; usufructuary mortgagee has got right to retain possession till payment of mortgaged money and to receive rents and profits accrued from the property and to appropriate the same in lieu of interest or partly in payment of mortgaged money; ananamolous mortgagee can sue either for fcreclosure of the rights of the mortgagee or bring the property for sale depending upon the terms and conditions of the deed. Under section 69 of the T. P. Act the mortgagee has right to sell the mortgaged property without the intervention of the Court for realisation of his debts, under certain circumstances. Under clause (b) of subsection (1) of Section 69 of the Transfer of Property Act if the mortgagee is Governmert and terms of deed provide for sale without intervention, the mortgagee has got a right to sell.