M DEIVAMANI Vs. BRANCH MANAGER TAMIL NADU

JUDGEMENT

(1.) HEARD the learned counsel for the petitioner and respondents.

(2.) THE petitioner has purchased the property from the 2nd respondent who stood as a guarantor for the loan availed by the 3rd respondent. THEreafter, the 2nd respondent sold the property subject to the mortgage in favour of the Land Development Bank for the loan availed by the 2nd respondent. THE 1st respondent has taken steps to recover the amount from the respondents No.2 and 3 and has brought the property which was given as collateral security for the loan availed by the 3rd respondent, by bringing the property into auction and that auction notice was challenged by the petitioner in this writ petition.

(3.) AS the Hon'ble Supreme Court has held that the remedy of the Financial Corporation is to proceed against the guarantor only by invoking Section 31, the action of the 1st respondent in bringing the property of the petitioner who purchased the property of the guarantor by invoking Section 29 is illegal and set aside. The 1st respondent is at liberty to proceed against the petitioner by invoking Section 31 of the Act and it is also open to the 1st respondent to avail other remedies available under law to recover the amount.