MAHESH CHANDRA vs REGIONAL MANAGER, U.P. FINANCIAL CORPORATION AND ORS.

The Supreme Court held that the Uttar Pradesh Financial Corporation's actions under Section 29 of the State Financial Corporations Act, 1951, were invalid due to a lack of notice and opportunity for the debtor before taking possession and selling the hypothecated property. The Court emphasized that the Corporation, as an instrumentality of the State, is required to act fairly and reasonably, and that principles of natural justice apply even in the exercise of statutory powers. The appeal was allowed, and the sale was declared vitiated and not binding on the debtor.