Statutory recovery powers against surety property are strictly limited; Section 31 provides the separate route for enforcement.

The SC construed the State Financial Corporations Act, 1951 as confining Section 29 to action against the defaulting industrial concern, so the Corporation could not take possession of mortgaged property belonging to a surety or guarantor. It held that a surety's liability, though coextensive under the Contract Act, is not the same as the industrial concern's liability and cannot expand Section 29 by implication. The Court further held that Section 31 creates a distinct and additional remedy that specifically permits enforcement against a surety, operating without prejudice to Section 29 and Section 69 of the Transfer of Property Act. The statutory route against surety property therefore lies under Section 31, not Section 29.

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Issues: (i) Whether the rights under Section 29 of the State Financial Corporations Act, 1951 extend to taking possession of the mortgaged property of a surety or guarantor. (ii) Whether Section 31 of the State Financial Corporations Act, 1951 can be invoked against a surety and whether it provides a remedy distinct from Section 29.

Issue (i): Whether the rights under Section 29 of the State Financial Corporations Act, 1951 extend to taking possession of the mortgaged property of a surety or guarantor.

Analysis: Section 29 was construed as conferring powers only against the defaulting industrial concern. The words used in the provision, read with the scheme of the Act, did not justify extending that power to the property of a surety or guarantor. The liability of a surety, though coextensive with that of the principal debtor under the Contract Act, is distinct from the liability of the industrial concern, and the statute did not expressly or by necessary implication authorize action under Section 29 against collateral security furnished by a surety.

Conclusion: Section 29 does not authorize the Corporation to proceed against the mortgaged property of a surety or guarantor.

Issue (ii): Whether Section 31 of the State Financial Corporations Act, 1951 can be invoked against a surety and whether it provides a remedy distinct from Section 29.

Analysis: Section 31 was held to create an additional and independent remedy, available without prejudice to Section 29 and Section 69 of the Transfer of Property Act, 1882. Its text, especially clause (aa), specifically enables enforcement of the liability of a surety, while the procedural scheme in Section 32 confirms that the legislature intended a special route for such enforcement. The later insertion of Section 32G further reflected the legislative policy of providing multiple remedies for recovery, but not of expanding Section 29 beyond its language.

Conclusion: Section 31 can be invoked against a surety, and it is a remedy distinct from Section 29.

Final Conclusion: The appeals failed because the Corporation could not use Section 29 to proceed against surety property, though Section 31 remained the proper statutory route for enforcing surety liability.

Ratio Decidendi: A special recovery power conferred by statute must be strictly confined to the persons and property expressly covered by the provision, and a distinct statutory remedy for enforcement against sureties cannot be enlarged by implication into a different provision.

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