LexTHE ANDHRA PRADESH STATE FINANCIAL CORPORATION versus GAR RE-ROLLING MILLS AND ANR.
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•• THE ANDHRA PRADESH STATE FINANCIAL CORPORATION A ..l v . GAR RE-ROLLING MILLS AND ANR. ETC. FEBRUARY 10, 1994 [KULDIP SINGH AND DR. A.S. ANAND, JJ.] B State Financial Corporations Ac~ 1951: Sections 29, 31 and 32--Ex- pression 'without prejudice to the provisions of section 29' appearing in section 31-Meaning and effect of-Nature and scope of sections 29 and 31-Scope of section 29 wider than section 31-Choice of Financial Corporation to in- c itiate proceedings either under section 29 or section 31-Right of Corporation to abandon at any stage the proceedings under either of the Sections and have recourse to the other section-But cannot proceed simultaneously under both the provisions. Constitution of India, 1950: Article 226-Equitable extraordinary juris- D diction-To be.exercised to prevent perpetration of legal fraud and to promote good faith and honesty-Not to be exercised in favour of a defaulting party which attempts to frustrate the legitimate claim of the order party. Equity: Object of-To promote honesty and good faith-To prevent E crafty evasion of law. Doctrines: Doctrine of election-Applicability of-Not to apply where two remedies available under the same statute differ in ambit and scope. ~- In the first of the two appeals the respondent Mill borrowed a sum F of Rs. 99,500 from the appellant Corporation for carrying on the business of manufacturing agricultural implements. A mortgage deed was also executed. On account of the default committed by the respondent Mill, the appellant corporati.on filed an application for the realisation of the loan with interest and the District Judge allowed the same but restricted the G future interest to 6% as against 81/2% claimed. On appeals the High Court stayed the execution sutaect to the condition that the respondent should .... -t deposit 1/4th of the amount due and furnish security for the balance amount. The respondent Mill neither deposited the amount nor furnished the security. The Corporat;on filed cross objections questioning the reduc- tion of the rate of future interest. High Court dismissed the appeal of the H 857 858 SUPREME COURT REPORTS [1994] l S.C.R. A respondent and allowed the cross objection of the Corporation. j... Thereafter the Corporation filed a suit before the City Civil Court to enforce the. personal liability of its respondent and his guarantor. Though the suit was decreed the Corporation could not execute it since the B respondent shifted his place of business and could not be traced. The Corporation issued an advertisement in a local newspaper notifying that sab of the respondent concern wotild be conducted under section 2~ of the State Finance Corporation Act and invited tenders ··+-- therefore. The second respondent submitted a tender for Rs. 3,05,000 c which was duly accepteci ~nd he deposited Rs. 52,000 being 1/4th of the tender amount. At this stage •'lie first respondent filed a Writ Petition before the High Court question mg the invoking of section 29 of the Act on .. various grounds. High Court stayed the same. When the writ petition came up for hearing, it was brought to the notice of the High Court that there D was difference of opinion between two Benches of the High Court with regard to the vires of s. 29 of the Act. The writ petition was accordingly referred to a Full Bench. However, the Full Bench did not go into the question of vires of section 29 of the Act, but held that it was not open to the Corporation to inyoke the provisions of s. 29 of the Act, having first successfully invoked the jurisdiction of the District Judge under s. 31 of E the Act and allowed the Writ Petition. In the second of the appeals, the facts were similar. Following the decisions of the Full Bench referred to above, the Division Bench allowed the writ petition in this case as well holding that the Corporation having ~ moved the Court for relief under section 31 of the Act was not entitled to F recover the amount of debt by taking recourse to the Provisions of s. 29 of ' the Act. The present appeals by s,ecial leave, were filed by the Corporation against the High Court's decisions mentioned above. Allowing the appeals, this Court G HELD: 1.1. The right vested in the Corporation under Section 29 of the State Financial Corporations Act is besides the right already possessed +- ~ by it at common law to institute a suit or the right available to it under section 31 of the
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