Third-party mortgaged property can be proceeded against under the recovery scheme, with implied notice and fair hearing safeguards.

Sections 25, 29, 31 and 32 of the State Financial Corporations Act, 1951 were read as creating a special, expeditious recovery mechanism for the Corporation. Section 29 was treated as permitting action against property mortgaged or pledged to secure the loan, even where that property belonged to a third-party co-mortgagor or surety. Section 31 was understood to allow an application for sale of secured property, and Section 32 was regarded as procedural rather than restrictive. Because the proceedings affected a third party's secured property, a fair hearing and notice to that person were implied, and the challenge to the Corporation's action failed.

---

---

Issues: Whether, in proceedings under Sections 31 and 32 of the State Financial Corporations Act, 1951, the Corporation could proceed against mortgaged property belonging to a third-party co-mortgagor or surety, and whether notice to such surety was required.

Analysis: The statutory scheme in Sections 25, 29, 31 and 32 was held to provide a special and expeditious recovery mechanism for the Corporation. Section 29 was read as authorising action against property pledged or mortgaged to secure the loan, without limiting such property to assets belonging only to the industrial concern. Section 31 was held to permit an application to the District Judge for sale of secured property, and Section 32 was treated as procedural, not as creating a restriction that would exclude third-party mortgaged property from the summary remedy. The absence of an express provision for notice to a surety did not negative the jurisdiction, because the requirement of fair hearing was implied into the procedure where the secured property of a third party was proceeded against.

Conclusion: The Corporation could proceed under Section 31 against mortgaged property belonging to a third-party surety or co-mortgagor, and notice to such person was implied under Section 32; the challenge to the proceedings therefore failed.

---