Statutory enforcement choice under the State Financial Corporations Act was upheld as non-arbitrary and procedurally fair.

Section 29 of the State Financial Corporations Act, 1951 was analysed as part of a wider statutory scheme, and the existence of two enforcement routes, Sections 29 and 31, was held not to be discriminatory under Article 14. The Court treated the Act's object, the Corporation's statutory responsibilities, and related provisions as sufficient guidance for choosing between remedies, so the absence of an express formula did not invalidate Section 29. On the facts, the Corporation's repeated demands, Board authorisation, and prolonged default supported its shift from Section 31 to Section 29. The natural justice challenge also failed because the agreement incorporated the statutory powers and the borrower had notice from the surrounding correspondence and conduct.

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Issues: Whether Section 29 of the State Financial Corporations Act, 1951 was unconstitutional as violative of Article 14 of the Constitution of India because it provided a more drastic remedy than Section 31 without express guidelines; whether the Corporation could, after initiating proceedings under Section 31, validly withdraw them and proceed under Section 29; and whether the action taken under Section 29 was vitiated for want of natural justice.

Analysis: The statutory scheme was read as a whole. Section 29 conferred on the Financial Corporation the power to take over management and transfer the secured property on default, while Sections 31 and 32 provided a court-controlled enforcement procedure. The existence of two procedures was held not, by itself, to attract Article 14. Applying the principles governing classification and delegated choice, the Court held that the policy and object of the enactment, the responsibility of the Corporation, and the provisions of Sections 3(2), 9, 24, 25 and 27 supplied sufficient guidance for the choice between the remedies. The Corporation was expected to act in a realistic and bona fide manner in safeguarding its advances, and the absence of an express statutory formula for choosing between Sections 29 and 31 did not render Section 29 discriminatory. On the facts, the Corporation had repeatedly called upon the petitioner to regularise the matter, had later obtained Board authorisation, and had proceeded after prolonged default; its resort to Section 29 was therefore not arbitrary. The plea based on natural justice also failed because the agreement itself incorporated the statutory powers, the petitioner had notice of the Corporation's intended action from the correspondence and circumstances, and the record did not show unfairness in the exercise of power.

Conclusion: Section 29 was held valid and not violative of Article 14, the Corporation's recourse to that provision after withdrawing the Section 31 proceedings was held lawful, and the challenge on the ground of natural justice was rejected.

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