JUDGMENT [ENTITY], J.
Page 2453
1. The short question that has arisen in this Petition is whether the impugned Order dated 14.9.2004, which reviewed and altered the Order dated 13.9.2002 dismissing the Appeal filed by the Respondent is legally proper, especially as to existence of any Review jurisdiction.
2. The facts of the case are that in November, 1996 the Respondent had filed a Proposal for grant of a license to it to commence Banking business in terms of [SECTION] of the [ACT] (hereinafter referred as "the Act"). In January, 1999 the Petitioner, namely, Reserve Bank of India, conveyed its approval in principle for the promotion of a local area Bank on sundry Terms and Conditions. In May, 2000 the Respondent submitted a Compliance Report to the effect that it had a capital of Rs.511 lacs on that date out of which Rs.195 lacs was in Fixed Deposit and Rs.316 lacs in Current Account. Relying on these documents filed by the Respondent Bank a license was granted to it on 28.7.2000 under [SECTION] of the Act to commence and carry on Banking business. Thereafter, certain irregularities and violations were noticed during an on-site supervisory visit which were duly intimated to the Respondent Bank. However, according to the Petitioner Bank, requisite rectifications were not carried out. A second on-site quarterly supervisory monitoring took place in April, 2001 in the course of which several irregularities were again detected and notified to the Respondent Bank in June, 2001. Keeping the gravity and severity of these deficiencies and discrepancies in view, including lack of minimum prescribed capital, a Notice to Show Cause was issued on 4.7.2001. The Respondent Bank did not restore the original minimum capital of Rs.500 lacs which was an essential requirement for the grant of the license. In the course of arguments learned counsel for the Respondent Bank has submitted that the shortfall can be made good if a fortnight's time is allowed to it. In September, 2001 in exercise of powers conferred under [SECTION] of the Act the Petitioner Bank prohibited the Respondent Bank from granting any loans and advances, making any investment or incurring liability including borrowal of funds and acceptance of fresh deposit or removal of existing deposit etc. without the prior approval of the Reserve Bank. On 13.11.2001 an oral hearing was granted to the Respondent Bank in the course of which it admitted that lapses had occurred and that rectificatory steps will be taken by 22.12.2001. Time was extended up to 3.1.2002 but the irregularities were not removed. In these circumstances, by Order dated 16.1.2002, in exercise of powers conferred under [SECTION] of the Act, the license granted to the Respondent Bank was cancelled.
3. The Respondent Bank filed a statutory Appeal under [SECTION] of the Act on 12.2.2002, which came to be dismissed on 13.9.2002. Thereupon, the Respondent Bank filed a Writ Petition in the High Court of Rajasthan in October, 2002 during the pendency of which the First Review Petition filed by the Respondent was dismissed by the Appellate Authority on 23.12.2003. One of the grounds for dismissal was that the Appellate Authority did not possess powers to Review a previous Order. Undaunted, a Page 2454 Second Review Petition was filed on 5.4.2004 which was allowed by an officer different to the one who had decided the Appeal. The Writ filed by the Respondent Bank in the High Court of Rajasthan was disposed of on 4.4.2005 stating - "During the pendency of the writ petition, final order has been passed by the appellate authority on 14.9.2004. In view of this fact, the writ petition stands disposed of".
4. The Respondent Bank has raised a Preliminary Objection as to the maintainability of the Writ Petition on the ground that this Court ought not to exercise territorial jurisdiction in the matter; that the Petitioner is guilty of forum shopping. It will be recalled that it is the Respondent Bank which had filed the Writ Petition in the High Court of Rajasthan and, therefore, there is no warrant whatsoever for accusing the Petitioner of forum shopping. So far as the Writ Petition in the Rajasthan High Court is concerned it was dismissed without any observations as to the legal propriety of the Order which has now been assailed, that is, the Second Review. It has been contended that citus is not sufficient for exercising territorial jurisdiction. I find no merit in this contention. The Appellate Authority is located in Delhi, where all the hearings took place. While it may certainly be permissible for an action to be initiated in the High Court of Rajasthan, presumably on the ground that the Respondent Bank has its operations within that State, the jurisdiction of the Delhi High Court does not stand automatically ousted. This Court has, therefore, correctly entertained the Writ Petition.
5. The argument that the dispute is between two Governmental Organisations and, therefore, clearance of the High Powered Committee of the [ACT] must precede the filing of the Writ Petition is also devoid of merit. The question, of far-reaching consequences, is whether the power to Review an Order is possessed by the Appellate Authority. This question cannot be decided except by a Court of Law. The contention that the Petition is barred by the principles of constructive res judicata is also devoid of merit. It deserves reiteration that it is the Respondent Bank which has filed the Writ Petition in the High Court of Rajasthan which was not disposed of on merits. Quite obviously a statement had been made by the Petitioner in those proceedings (Respondent Bank here) that a Final Order had been passed. That Final Order which was in its favor. The Court neither decided the facts and issues raised in the Petition nor did it dispose of the Petition by a reasoned judgment. These objections are also misconceived.
6. I shall now proceed to discuss the main question which arises in this case, namely, whether the impugned Order is non est, being totally devoid of jurisdiction. It will be recalled that on earlier occasion a Review Petition had also been filed which was dismissed on 23.12.2003 by Shri [ENTITY], Joint Secretary and Appellate Authority in the Ministry of Finance, Department of Economic Affairs (Banking Division), Government of India. The Respondent Bank had unsuccessfully relied on the Judgment delivered in M.V. [ENTITY] v. Harwan Investment and Trading Private Limited, 1993 Supp (2) SCC 433.
Page 2455
7. The decision in this case revolves around [SECTION] of the Act which is accordingly reproduced for ease of reference.
[SECTION] The Reserve Bank may cancel a license granted to a banking company under this section
i. if the company ceases to carry on banking business in India; or ii. if the company at any time fails to comply with any of the conditions imposed upon it under [SECTION]. if at any time, any of the conditions referred to in Sub-section (3) [and Sub-section (3A)] is not fulfillled:
Provided that before cancelling a license under clause (ii) or clause (iii) of this Sub-section on the ground that the banking company has failed to comply with or has failed to fulfilll any of the conditions referred to therein, the Reserve Bank, unless it is of opinion that the delay will be prejudicial to the interests of the company's depositors or the public, shall grant to the company on such terms as it may specify, an opportunity of taking the necessary steps for complying with or fulfillling such condition.
(5) Any banking company aggrieved by the decision of the Reserve Bank cancelling a license under this section may, within thirty days from the date on which such decision is communicated to it, appeal to the Central Government.
(6) The decision of the Central Government where an appeal has been preferred to it under Sub-section (5) or of the Reserve Bank where no such appeal has been preferred shall be final.
8. The Appeal dated 12.2.2002 which was dismissed by Shri [ENTITY], Joint Secretary and Appellate Authority in the Ministry of Finance, Department of Economic Affairs (Banking Division), Government of India on 13.9.2002 was obviously under [SECTION] of the Act. The Appellate Authority exercised quasi judicial functions. By operation of the next Sub-section, this decision became final. In [PRECEDENT], the Apex Court had to render a decision on the argument of whether the Election Commission possessed powers of Review. As in the case before me the Court resoundingly rejected applicability of [SECTION] of the [ACT] to such authorities. It observed that these provisions were not applicable to quasi-judicial authorities and since the Election Commission discharged these functions, the provisions of [SECTION] of the [ACT] were not attracted. Reference to the [ACT] by learned Senior Counsel for the Respondent Bank cannot, therefore, be of any advantage to the Respondent. In State of Assam v. J.N. [ENTITY] Biswas, it has been opined that in the absence of Page 2456 a rule authorising the Government to do so, reopening of closed proceedings were ultra vires and bad in law. In [ENTITY] Narshi Thakershi v. Shri Pradyumansinghji Arjunsinghji, it has been held that the power of Review must be explicitly available and such a power was not contained in [SECTION] of the [ACT]. The [ENTITY] and [ENTITY] cases were cited in [PRECEDENT], . The following paragraph thereof is relevant as it leaves no room for doubt that quasi judicial authorities cannot presume or assume powers of Review.
5. The last point raised by Shri [ENTITY] was that the Central Government had no power to review its earlier orders as the rules do not vest the government with any such power. Shri [ENTITY] relied on certain decisions of this court in support of his submission : [ENTITY] Narshi Thakershi v. Pradyumansinghji Arjunsinghji; D.N. [ENTITY] v. State of Bihar and State of Assam v. J.N. [ENTITY] Biswas. All the cases cited by Shri [ENTITY] are cases where the government was exercising quasi-judicial power vested in them by statute. We do not think that the principle that the power to review must be conferred by statute either specifically or by necessary implication is applicable to decisions purely of an administrative nature. To extend the principle to pure administrative decisions would indeed lead to untoward and startling results. Surely, any government must be free to alter its policy or its decision in administrative matters. If they are to carry on their daily administration they cannot be hidebound by the rules and restrictions of judicial procedure though of course they are bound to obey all statutory requirements and also observe the principles of natural justice where rights of parties may be affected. Here again, we emphasise that if administrative decisions are reviewed, the decisions taken after review are subject to judicial review on all grounds on which an administrative decision may be questioned in a court. We see no force in this submission of the learned counsel. The appeal is, therefore, dismissed.
9. Reliance by learned Senior Counsel for the Respondent Bank on [ENTITY] Singh v. State of Punjab, AIR 1963 SC 1909, is of no avail. It had been accepted that High Courts possessed the powers to Review their own orders under [SECTION] of the [ACT]. The ratio cannot be extended to quasi-judicial authorities, and especially to the Appellate Authority in view of Sub-section (6) of the Act which clarifies that the decision of the Appellate Authority under [SECTION] attains finality. Similarly, the observations in [ENTITY]'s case to the effect that - "where statutes do not provide remedy and has to be sought by recourse of basic principles, it is the duty of the court to devise procedural rules by drawing analogy from other systems of law and Practice and expediency". Page 2457 As in [ENTITY]'s case the functioning of a quasi judicial authority was not before the Apex Court.
10. The right to file an Appeal is not an unending one. So far as civil claims and disputes are concerned a First Appeal is provided and thereafter a Second Appeal is severely restricted to points of law of general importance. In order to afford an unsuccessful appellant an opportunity of being heard Courts exercise powers under [SECTION] 227 of the [ACT]. If the reasoning of the Appellate Authority was perverse in the view of the Respondent Bank, the Respondent Bank could have invoked the extraordinary jurisdiction of this Court. It has not done so. Instead, after a change of officer it had filed a Second Review Petition when the first Petition was dismissed inter alia on the ground of it being not maintainable.
11. In these circumstances of the case the Writ Petition is allowed. The impugned Order dated 14.9.2004, being the Second Review Petition, is non-est and is quashed. Parties to bear their respective costs.