Appeal No 901 of 1993
From the Judgment and Order dated 151191 of the Patna High Court in CW C No 3430 of 1991
A Sharan for the Appellant
G Ramaswamy and AV Rangam for the Respondents
The Judgment of the Court was delivered by BHARUCHA J
Leave to appeal is granted
The appeal is directed against the judgment and order of the High Court at Patna dismissing the writ petition filed by the appellant
The appellant was employed by the respondent
He was chargesheeted for having granted bank loans to a large number of persons without proper documentation and without verifying their creditworthiness and also with having obtained illegal gratification in that connection
An en quiry was held
The Enquiry Officer made a report holding the appellant guilty
Upon the basis of the enquiry report the appellant was dismissed from service
The appellant filed a writ petition before the High Court at Patna being Writ Petition No CWJC No 1979 of 1988 impugning the dis 163 missal
The High Court allowed the writ petition by judgment and order dated 8th July 1988
The enquiry the court concluded could not be held to be proper and in accordance with law
Consequently the order of dismissal was set aside
The High Court observed  This does not mean that the petitioner should be got scot free
He must face enquiry
Sufficient time has already lapsed
The enquiry must be concluded as early as pos sible
The petitioner will appear before the Enquirying Officer to be nominated in the meantime at Patna on 2nd August 1988 and the prosecution will produce the witnesses examined on his behalf for cross examination
After the cross examination is over the petitioner will also produce the witnesses when he may like to enquire
This should be done without any adjournment and the proceed ing should be conducted day to day so that it may be concluded as early as possible
With this observation this writ application is disposed of
 The same Enquiry Officer then permitted the appellant to cross examine the witnesses produced in support of the charge and to examine his own witnesses
He made a report dated 27th March 1989 in which he held nine charges against the appellant to be proved one to be partly proved and one not proved
The disciplinary authority upon consideration of the enquiry report passed an order dated 23rd October 1989 dismissing the appellant from service
The appellant challenged the order of dismissal dated 23rd October 1989 on the ground that the enquiry upon the basis of which it had been passed had not been conducted as required by the order of the High Court dated 8th July 1988
He also challenged it upon the ground that he had not been furnished with a copy of the Enquiry Report
The High Court rejected the writ petition
It held that the judgment of this Court in the case of Union of India and others vs Mohd Ramzan Khan   did not cover an order of dismissal that had been passed before the said judgment was delivered
Insofar as the enquiry report was concerned the High Court took the view that the Enquiry Officer had allowed the appellant to participate in the proceedings as also to cross examine witnesses and he had considered all relevant aspects on the record
164 It will be recalled that the High Court by the judgment and order dated 8th July 1988 had held that the earlier enquiry was not proper and in accordance with law and had quashed the order of dismissal dated 14th February 1987 based thereon
It had directed that the appellant should face an enquiry whereat the prosecution would produce the witnesses it had examined on its behalf for cross examination
by the appellant
Thereafter the appellant could produce such witnesses as he desired
It is the submission of learned counsel on behalf of the appellant that the Enquiry Officer had in the second enquiry report relied upon the findings of the earlier enquiry since quashed and that he had not permitted the appellant to examine three necessary witnesses in support of his case
There had therefore been no real enquiry as contemplated by the High Court s order dated 8th July 1988 and that therefore the dismissal order passed upon the basis of the second enquiry report should be quashed
Shri G Ramaswamy learner senior counsel for the respondent submitted that the Enquiry Officer had conducted the enquiry as directed by the High Court in its order dated 8th July 1988 from the point of cross examination of the respondent s witnesses onward
The enquiry report made by the Enquiry Officer subsequent to the order of the High Court dated 8th July 1988 is entitled Additional enquiry report in respect of charges laid against Shri Heera Prasad
It opens with the sentence This enquiry report is further to the enquiry report already submitted by me in September 1986
It says that the enquiry was reopened
It says further As the charges have been dealt with one by one in detail in my previous enquiry report I am confining this report only to the cross examination of prosecution witnesses as also examinationcross examination of defence witnesses
 The report concludes thus  After going through the proceedings hearing the depositions made by the defence witnesses and hearing the answers given by the prosecution witnesses I find no reason to change may report as no exonerating fact came out during the enquiry instead it becomes a little darker particularly noting the fact that at least three 03 of the witnesses cited by the charged officer himself refused to come for deposing before the enquiry for reasons best known to the charged officerwitnesses
As the various 165 exhibits etc were discussed and analysed by me in my previous report I am not repeating the analysis once again in this report
 As aforesaid the Enquiry Officer held nine of the eleven charges to be proved one to be partly proved and one to be not proved
The Emphasis is supplied
It is patent that the order dated 8th July 1988 contemplated a fresh enquiry
At best the examination in chief of the witnesses of  the respondent could be said to have been allowed to be incorporated in the second enquiry proceedings
The order certainly contemplated that the Enquiry Officer would apply his mind afresh to the evidence on record comprising the examination in chief and cross examination of the respondents witnesses and that of the appellant s witnesses
It is patent from the Additional enquiry report made by the Enquiry Officer that there has been no fresh application of mind
It was impermissible for the Enquiry Officer in these circumstances to have borne his previous Enquiry Report in mind and to have confined the Additional enquiry report only to the cross examination of prosecution witnesses and the examination and cross ex amination of defence witnesses as the charges have been dealt with one by one in detail in my previous enquiry report
It was also impermissible for him to have stated that the findings of the previous enquiry report remain as they are
Having regard to the High Court s order dated 8th July 1988 the Enquiry Officer was bound to consider the material or record afresh and not to take his earlier report into account and to say that he found no reason to change that report
We are in the circumstances not satisfied that the appellant has had a fair opportunity of presenting his case to an Enquiry Officer unbiased by pre conceptions
Having regard to all that has transpired
we think that it is in the fitness of things that the order of dismissal dated 23rd October 1989 should be quashed and another Enquiry Officer should be appointed by the respondent who should allow the appellant the opportunity of examining as his witnesses the three persons referred to by the earlier Enquiry Officer in the paragraph of the Additional enquiry report subtitled Conclusion
He should give to the respondent and the appellant the opportunity of a hearing
He should then apply his mind to the material on record without in any way being influenced by the earlier enquiry reports and make his own enquiry report accordingly
In the result the appeal is allowed
The judgment and order under appeal are set aside
The writ petition is allowed to the extent mentioned in the preceding paragraph
There shall be no order as to costs
VPR Appeal allowed


Summary:
The respondent Company obtained loan from the appellant Financial Corporation
Soon after obtaining the loan it ceased to operate and was declared a sick unit
Consequently it did not make any repayment of loan as stipulated in the agreement and the hypothecation deeds
Thereafter the appellant Corporation issued notice under section 29 of the for taking over the respondent s unit for recovery of the amount due Rs3857 lakhs
Ile respondent Company filed a writ petition in the Allahabad High Court questioning the appellant s action
Ile High Court allowed the petition and directed 1 expeditious rehabilitation of the concern and 2 to restore back the 150 possession of the unit to the respondent Company
Against the judgment of the High Court the Financial Corporation riled an appeal in this Court
Allowing the appeal and setting aside the order of the High Court this Court HELD  1
It is true that the appellant Corporation which Is an instrumentality of the State created under the is not like an ordinary money lender or a Bank which lends money
It is a lender with a purpose the purpose being promoting the small and medium industries
At the same time It is necessary to keep certain basic facts In view
The relationship between the Corporation and the borrower is that of creditor and debtor
the Corporation is not supposed to give loans once and go out of business
It has also to recover them so that it can give fresh loans to others
Corporations too borrow monies from Government or other financial corporations and they too have to pay interest thereon
No doubt it has to act within the four corners of the Act and in furtherance of the object underlying the Act
But this factor cannot be carried to the extent of obligating the Corporation to revive and resurrect every sick industry irrespective of the cost involved
156H 157A CF Promoting industrilisation at the cost of public funds does not serve the public interest it merely amounts to transferring public money to private account
The fairness required of the Corporation cannot be carried to the extent of disabling it from recovering what Is due to it
While not insisting upon the borrower to honour the commitments undertaken by him the Corporation alone cannot be shackled band and foot in the name of fairness
Fairness is not a one way street more particularly in matters like the present one
The fairness required of it must be tempered nay determined in the light of all these circumstances
In the instant case the respondents have no intention of repaying any part of the debt
They were merely putting forward one or other ploy to keep the Corporation at bay
157D F Mahesh Chandra vs Regional Manager UP Financial Corporation Ors 1992 2 JT 326 held Inapplicable
In a matter between the corporation and Its debtor a writ court has no say except in two situations  1 there is a statutory violation on the part of the Corporation or 2 where the Corporation acts unfairly ie 151 unreasonably
The High Court exercising its jurisdiction under Article 226 of the Constitution cannot sit as an Appellate Authority over the acts and deeds of the Corporation and seek to correct them
Doctrine of fairness
evolved in administrative law was not supposed to convert the writ courts into appellate authorities over administrative authorities
The constraints self imposed undoubtedly of writ jurisdiction still remain
Ignoring them would lead to confusion and uncertainty
The jurisdiction way become rudderless
157G H 158A 21
The obligation to act fairly on the part of the administrative authorities was evolved to ensure the Rule of law and to prevent failure of justice
This doctrine is complementary to the principle of natural justice which the Quasi judicial Authorities are bound to observe
It is true that the distinction between a quasi judicial and the administrative action has become thin
But even so the extent of judicial scrutinyjudicial review in the case of administrative action cannot be larger than in the case of quasi judicial action
If the High Court cannot sit as an appellate authority over the decisions and orders of quasi judicial authorities it follows equally that it cannot do so in the case of administrative authorities
The Court cannot substitute its judgment for the judgment of administrative authorities in such cases
Only when the action of the administrative authority is so unfair or unreasonable that no reasonable person would have taken that action can the Court intervenes
158C F AK Kraipak  Ors
vs Union of India  Ors
 AIR 1970 SC 150 Secretary of State for Education vs Talimeside Metropolitan Borough Council  and Associated Provincial Picture Houses Ltd vs Wednesbury Corporation   relied on
While passing the impugned order the High Court has not kept in mind the well recognised limitations of its jurisdiction under Article 226 of the Constitution
While reviewing the administrative action it was not justified in acting as an appellate court
153D159C