KARNATAKA STATE FINANCIAL CORPORATION vs N. NARASIMAHAIAH .

The Supreme Court interpreted Section 29 and Section 31 of the State Financial Corporations Act, 1951, holding that the provisions allow the Corporation to take possession of mortgaged properties of guarantors even if the industrial concern defaults. The Court found that the Karnataka High Court erred in quashing the Corporation's orders under Section 29, as the second part of the section provides independent rights for taking possession. Consequently, the Supreme Court set aside the High Court's judgment and allowed the Corporation to proceed against the properties of the guarantors.