JUDGMENT M. Katju, J.
1. By means of this petition the petitioner has prayed for quashing the impugned recovery certificate dated 4.10.1994 Annexure 12 to the writ petition and for a mandamus directing the respondent No. 1 U.P. Financial Corporation to prepare a rehabilitation package of the petitioner and to submit it to the respondent No. 3 for placing it before respondent No. 4.
2. Heard learned Counsel for the parties.
3. We have carefully perused the writ petition and counter and rejoinder affidavits. .
4. The petitioner took a loan from the U.P. Financial Corporation and paid certain amount as stated in Paragraph 14 of the writ petition. In Paragraph 16 of the writ petition it is stated that the Corporation disbursed a total of Rs. 9,19,600/-to the petitioner in a period of two years one month. The details as alleged by the petitioner are given in Paragraphs 14 to 20 of the writ petition which need not be repeated here. It is alleged by the petitioner that as a result of the disbursement schedule the petitioner suffered heavy loss as the Corporation delayed disbursement. Since 1990 the Corporation started issuing notices to the petitioner that the loan of the Corporation should be paid immediately and on 3.12.1991 the Corporation issued notice under Section 29 of the Act recalling all the loans of the Corporation and directing that a sum of Rs. 12,34,529/- was due vide notice dated 3.12.1991 Annexure 3 to the writ petition. Thereafter on 25.2.1992 the Corporation again wrote to the petitioner that the possession of the petitioner's unit will be taken over by the Corporation and if the petitioner wishes to discuss the matter he may contact the Corporation on any working day. On 28.2.1992 the petitioner's representatives went to the Assistant Regional Manager of the Corporation and deposited four cheques and promised to deposit further amounts. True copy of the letter of the Corporation dated 25.2.1992 is Annexure 5 to the writ petition. True copy of the letter of the petitioner dated 28.2.1992 is Annexure 6 to the writ petition. The petitioner then received a letter dated 3.7.1992 from the Corporation stating that the possession of the unit would be taken on 10.7.1992 vide Annexure 7 to the writ petition.
5. In Paragraph 29 of the writ petition it is alleged that the petitioner has been declared as a sick unit vide order dated 20.8.1993 vide Annexure 8 to the writ petition. It is alleged in Paragraph 30 of the writ petition that the Reserve Bank of India has issued guidelines with regard to rehabilitation of sick small scale units and the unit of the petitioner is covered by the guidelines. Photocopy of the guidelines is Annexure 10 to the writ petition. In Paragraph 31 of the writ petition it is alleged that the petitioner has submitted the rehabilitation package on 27.2.1992 and pressed the respondent-Corporation for acceptance of the same. The petitioner submitted an application to the respondent No. 3 on 6.8.1994 and a red card was issued to the petitioner on 17.8.1994. It is alleged in Paragraph 32 of the writ petition that the State Government has taken a policy decision and issued a G.O. dated 3.5.1994 wherein the State Government has framed rules for declaration of a unit as a sick unit and for a rehabilitation scheme. The petitioner applied for rehabilitation but to no avail and instead a recovery certificate has been issued.
6. An amendment application has also been filed by the petitioner. In this amendment application reference has been made to several developments subsequent to the filing of the writ petition. It is alleged in Paragraph 36-D that the Regional Rehabilitation Committee held a meeting on 10.3.1997 and the petitioner had submitted a rehabilitation proposal to it dated 17.3.1997. Thereafter on 24.1.1998 a meeting was again held under the Chairmanship of Commissioner, Kanpur Division and the Committee took a decision to rehabilitate the petitioner's unit and appointed the Corporation as the operating agency to finalise the rehabilitation package vide Annexure 14. It is alleged in Paragraph 36-E that the Joint Director of Industries on 31.8.1998 directed the petitioner to contact the Corporation as the Corporation was not agreeing to the amount of one time settlement submitted by the petitioner. It is alleged in Paragraph 36-F that a meeting was held in which the petitioner, General Manager, Chief Recovery Officer and Senior Manager (Law) of the Corporation participated and a one time settlement was decided to be Rs. 12 lacs and on 23.3.1998 the petitioner had given written consent with regard to this amount vide Annexure 15. It is alleged in Paragraph 36-G that despite the one time settlement and written consent the Corporation has written a false letter dated 13.8.1998 to the Joint Director of Industries. In Paragraph 36-H it is mentioned that on 14.6.1999 the Joint Director of Industries again wrote to the Managing Director of the Corporation directing him to submit a rehabilitation package of the determined amount of one time settlement.
7. In Paragraph 36-I it is stated that on 8.10.1999 a meeting of the Regional Rehabilitation Committee took place in which the Corporation was represented by the Regional Manager, Kanpur. The Chairman of the Committee enquired from the Regional Manager of the Corporation regarding the petitioner's proposal for rehabilitation and the Regional Manager replied that the proposal is under consideration. The Committee took a decision that the Corporation should prepare a package for rehabilitation according to the relevant G.O. Copy of the minutes of the meeting dated 8.10.1999 is Annexure 18. In Paragraph 30-J it is stated that in pursuance of the decision of the meeting dated 8.10.1999 the petitioner participated in the settlement meeting dated 13.12.1999 with the Deputy General Manager of the Corporation and on 14.12.1999 certain decisions were taken for payment of Rs. 12,50,000/- within three years, etc. Thereafter on 21.2.2000 another meeting of the Regional Rehabilitation Committee took place. The minutes of the meeting is Annexure 20. Thereafter also meetings were held but it is alleged in Paragraph 36-R that the Corporation acted malafide in not finalishing the one time settlement or the rehabilitation on package despite the directives of the Regional Rehabilitation Committee.
8. The petitioner has also disputed the amount of interest charged and has prayed for quashing of the orders dated 24.10.2001 and 28.8.2001 issued by the Regional Manager of the Corporation and has prayed that the rehabilitation package should be prepared for rehabilitation of the unit.
9. A counter-affidavit has been filed by the Corporation and we have perused the same. In Paragraph 3 it is stated that a loan of Rs. 9.60 lacs was sanctioned to the petitioner by the Corporation vide letter dated 10.10.1985. In the sanction advice implementation schedule as drawn according to which disbursement was to be lifted within a period from December, 1985 to June, 1986 after raising the security at the site and complying with the other terms and conditions of the sanction advice. However, this was not done by the petitioner. The petitioner made an agreement with the Corporation on 15.1.1987 and the Corporation made disbursement as mentioned in Paragraph 3 of the counter-affidavit.
10. In Paragraph 4 of the counter-affidavit it is stated that the Corporation made disbursement as and when security was given by the petitioner and he completed other formalities. In Paragraph 5 it is stated that according to the loan agreement executed on 15.1.1987 the interest was to be charged at 18.5% with a rebate of 5% on timely payment and the interest was to be paid in quarterly instalments. In Paragraph 10 it is stated that the gestation period was of 18 months from the date of first disbursement of the loan instalment. The first instalment was given to the petitioner on 28.2.1987 and hence the gestation period expired on 28.8.1988. In Paragraph 11 it is stated that the petitioner did not pay any dues to the Corporation after 31.3.1989. In Paragraph 13 it is denied that the Corporation committed any delay in disbursement of the loan. However, it is stated that the Corporation cannot disburse the amount without raising security at site and completing the entire formalities. The actual position of disbursement is given in Annexure CA-1 to the counter-affidavit. The Corporation disbursed the amount of Rs. 9,19,600/- to the petitioner and the balance amount could not be disbursed to the petitioner as no security was made at site. In Paragraph 20 it is stated that the delay was done by the petitioner who executed the agreement with the Corporation very late and also failed to pay the instalments in time and did not raise the complete security for the disbursement of the full amount. In Paragraph 24 it is stated that the Corporation provided ample opportunity to the petitioner for repayment of the dues but the petitioner failed to clear the same. The Corporation provided an option to the petitioner to come and discuss the matter and the petitioner's representatives met the Assistant General Manager of the Corporation on 26.2.1992 and requested to give time till 20.3.1992 for part payment and stated that they will submit a fresh proposal for payment of the rest amount up to 27.2.1992 but the petitioner did not submit any proposal and instead submitted forged cheques dated 28.2.1992, 7.3.1992, 16.7.1992 and 31.3.1992 each of Rs. 50,000/-. Only cheque dated 7.3.1992 was encashed and the remaining cheques were dishonoured by the petitioner's banker.
11. In our opinion this deserves to be dismissed on this ground alone that the petitioner gave cheques which bounced. Hence the petitioner has not come with clean hands to this Court. In Paragraph 27 it is stated that as per guidelines of the State Government dated 3.5.1994 the petitioner was not found suitable for the benefit in that GO. In Paragraph 29 it is stated that a screening committee was held on 20.10.1993 under the Chairmanship of the Managing Director of the Corporation in which it was decided that no additional loan for installation of plant and machinery should be considered, and the company shall pay part payment of dues in the next few months. When the unit did not make repayment within time as per the decision of the screening committee and also did not submit any sanction letter of the bank the Corporation issued recovery certificate for Rs. 18,61,653.14 on 4.10.1994 and also informed the Division Udyog Bandhu Committee in its meeting on 10.10.1994. In Paragraph 30 it is alleged that the interest has been charged as per the policy of the Corporation for which an agreement was executed with the petitioner on 15.1.1987. In Paragraph 31 it is stated that the petitioner is not entitled for rehabilitation facility.
12. In Paragraphs 42 and 43 of the counter-affidavit it is stated that it was decided that no loan can be provided for the additional machinery but resettlement can be done if the petitioner unit pays Rs. One lac within three months, but the petitioner did not make the said payment within the stipulated time and so solution could be finalised and no rehabilitation could be done and the same was informed to the Joint Director of Industries vide letter dated 18.10.1994.
13. In our opinion, there is no merit in this petition. The petitioner has not come to this Court with clean hands as his cheques have bounced. No one has a right to get one time settlement or rehabilitation as held by this Court in Civil Misc. Writ Petition No. 6319 of 2004, Swamp Packaging and Sanitaries (India) Pvt. Ltd. v. State Bank of India, decided on 16.2.2004. It was held in that decision that one time settlement or rehabilitation or fixing instalments is really rescheduling of the loan and this can only be done by the Bank or financial institution which granted the loan in its descretion. Granting of one time settlement or rehabilitation or fixing instalments is really varying the contract between the parties which cannot be done by the Court. It can only be done by the mutual consent of the parties. This Court under Article 226 cannot direct grant of one time settlement as held by a Division Bench of this Court in MM Accessories v. U.P. Financial Corporation, 2002 (46) ALR 261. The Court under Article 226 cannot direct that a unit be rehabilitated. There are well settled limitation on the High Court's power to issue writs. The High Court can interfere only when there is violation of law or error of law apparent on the face of the record.
14. In our opinion, the RBI Guidelines or GOs of the State Government are purely administrative orders and hence the petitioner cannot claim any right on their basis as held by this Court in Civil Misc. Writ Petition No. 8483 of 2003, Shreestha Flexible Packs Private Limited v. Regional Rehabilitation Committee, decided on 3.3.2004. In our opinion, these Government Orders are only executive instructions and confer no right on the petitioner as they are not statutory orders. It is well settled that purely administrative orders, which have no statutory force, are not enforceable in a Court of law vide Fernadez v. State of Mysore, AIR 1967 SC 1753 (Para 12); State of Maharashtra v. Lok Shikshan Sanstha, AIR 1973 SC 588 (Para 27); Union of India v. Manjit, AIR 1977 SC 757 (Paras 31-36) etc. Such administrative orders do not have the force of law, and hence confer no legal right on anyone, vide Satyanarain v. Mallikarjun, AIR 1960 SC 137 (142); Rowther v. State, AIR 1959 SC 896 (899); Saxena v. State of M.P., AIR 1967 SC 1264 (1267); Mahendra v. State of UP., AIR 1963 SC 1019 (1035). Hence no writ lies for enforcement of a purely administrative order vide Nagendra v. Commissioner, AIR 1958 SC 398 (412-13); Abdullah v. State, AIR 1959 SC 896 (Paras 11 and 18); Roman v. State of Madras; AIR 1959 SC 694 (700) etc.
15. Hence the petitioner cannot claim any benefit or right on the basis of the RBI guidelines or a Government Orders of the State Government. These guidelines or GOs are only for the internal guidance of the authorities, but no one can claim any right on their basis.
16. In Haryana Financial Corporation v. Jagdamba Oil Mills, (2002) 3 SCC 496, the Supreme Court held that while the Financial Corporations have to act fairly, the borrowers have a corresponding duty to repay in time. The decision of the State Financial Corporation taken with intention of recovery of its dues is not open to challenge unless it is malafide. The Supreme Court reversed its earlier decision in Mahesh Chandra v. Regional Manager, 1993 (2) SCC 279.
17. In our opinion, the Court should observe judicial restraint in such matters and not embarrass the Financial Institutions or Banks. Due to over-activism of the Courts tens of thousands of crores of recoveries have been stayed, which is having an adverse impact on the economy. When a loan is recovered it is advanced to new units, but if it is not recovered new units cannot be set up. Moreover, it is well known that unfortunately in our country many unscrupulous business borrow money from banks or financial institutions and divert it to secret accounts, and declare their unit sick. In this way the scarce financial resources of the country are siphoned off. This Court cannot approve of such malpractices.
18. For the reasons given above this petition is dismissed.