P.S. Mishra, C.J.
1. This appeal under clause 15 of the Letters Patent has brought once again in issue the scheme under which sections 29 to 32 of the State Financial Corporations Act, 1951, operate. The petitioners/appellant has borrowed from the respondent-Corporation finance amounting to Rs. 10,09,000 only in the year 1981, for setting up an industrial unit in the year 1988. It has paid by instalments an amount in the sum of Rs. 17,51,936, irrespective, however, of which payment, it has defaulted and according to the respondent-Corporation, it is in arrears of repayment by way of instalments of Rs. 13 lakhs odd. The respondent-Corporation served upon the petitioner/appellant, however, a notice dated July 4, 1992, stating, inter alia, that the petitioner-company (represented at appropriate level) was advised to call on the general manager/managing director at the head office of the Corporation on July 9, 1992, at 11 a.m. to discuss the problems of the unit and to work out the payment schedule for clearing outstanding arrears of interest and loan repayments. This communication also contained the advice, "to come prepared to issue cheques towards arrears, together with audited balance-sheet/profit and loss account for the past two financial years, and certified pro forma balance-sheet for the latest financial year, cost of raw-material along with consumptions co-efficients, and variations in the selling prices of the finished goods in the past three years". There is no material on the record to show what transpired pursuant to the above between the respondent-Corporation and the petitioner/appellant, but this is followed by a communication on the subject of recall-cum-sale notice dated September 9, 1993, from the respondent-Corporation to the petitioner, which reads as follows :
"With reference to the above, we find that your account continues to be irregular in spite of the several concessions and letters, reminders and even notices issued to you, the following amounts are still in arrears as on date July 31, 1993 :
------------------------------------------------------------------------ Account Principal Interest Others Total
No. (Rs.) (Rs.) (Rs.) (Rs.)
------------------------------------------------------------------------ 68837810 7,33,205.29 3,33,326.85 3,924.80 10,70,456.94 Grand total 7,33,205.29 3,33,326.85 3,924.80 10,70,456.94 ------------------------------------------------------------------------
In view of the above, we are taking steps for the recovery of the amount of Rs. 10,70,456.94 which is outstanding in your account with interest from July 31, 1993, and other amounts debitable to the account by sale of your unit under section 29 of the State Financial Corporations Act by advertisement in papers, if necessary, as per the pro forma enclosed with appropriate variations.
Please note that if the sale does not materialise or the proceeds thereof are not sufficient, we will proceed against you jointly and severally for the recovery of the outstanding or the shortfall, as the case may be, under the other provisions of the SFCs Act and other laws at your costs and deeds.
However, if the arrears are paid on or before September 20, 1993, the proposed action will be dropped."
2. The petitioner/appellant, however, has averred that it is an alcohol based industry and its manufacturing activity totally depends on the supply of rectified spirit by the Government of Andhra Pradesh. It had obtained necessary licence under the Andhra Pradesh Excise Act and the Government of Andhra Pradesh had granted necessary quotas to it for supply of rectified spirit for manufacturing anaesthetics and other solvents. It has further stated as follows :
"I submit that the petitioner was faced with a lot of financial problems because of non-availability of finances and non-availability of raw material due to the whimsical attitude of the Excise Department of Government of Andhra Pradesh in the supply of quota of rectified spirit. I submit that I joined the petitioner-company in the year 1988 and invested huge amounts to the tune Rs. 8 lakhs to revive the petitioner-company. The petitioner-company was forced to file writ petitions against the Government of Andhra Pradesh challenging various illegal orders passed by the officers of the Excise Department."
3. The above, however, ended in the seizure of the assets of the petitioner-company by the respondent-Corporation and steps were taken by the Corporation to put the assets of the petitioner-company on sale. The petitioner has averred, however, that the managing director persuaded the officers of the respondent-Corporation not to sell the unit and to allow the promoters to revive the unit. After, however, the seizure and before the sale of the assets of the petitioner-company by the Corporation, the petitioner-company deposited and amount of Rs. 4.5 lakhs towards part payment of the amount due to the respondent-Corporation. However, its activities could not be resumed and its financial burden continuously increased because it could not receive from the respondent-Corporation release of its unit. The petitioner/appellant moved this court in Writ Petition No. 15846 of 1993, and the court directed the Commissioner of Excise, Government of Andhra Pradesh to supply the rectified spirit after the unit was released from the respondent-Corporation. Though, the said order was communicated to the respondent-Corporation and the petitioner/appellant promised to clear off its dues soon after the production commenced, the respondent-Corporation did not release the unit. The petitioner-appellant has given some details of action taken for the sale of its assets by the respondent-Corporation and pointed out that in its attempts to sell the assets, the respondent-Corporation could not receive any reasonable offer in December, 1993, February, 1994, and March, 1994, and, however, it finalised sale in favour of the fifth respondent, Vasant Chemicals, without following any norms for ensuring a proper consideration as to the price of the assets of the petitioner-company and without affording any opportunity to it to make good the debt by repayment either in a lump sum or in instalments. On material fact, however, revealed in course of the hearing is available in a communication by the managing director of the petitioner-company to the general manager of the respondent-Corporation dated December 27, 1993. It refers to the seized unit having been handed back to the petitioner-company on July 6, 1993, with the understanding that it would start repaying the Corporation after a period of three months within which it expected its excise licence to be renewed and raw-material supplied to it to enable it to manufacture its products. The licence, however, had not been renewed till September 30, and as such, it was forced to file a writ petition in the High Court against the Commissioner of Excise, Hyderabad. This communication further reads as follows :
"We are pleased to inform you that the honourable justice on December 23, 1993, has directed the Commissioner of Excise to renew our licence immediately and supply the spirit to our factory after SFC hands the unit to us, and posted the WPMP to January 17, 1994. Please note that the Corporation had asked us to pay Rs. 50,000 for release of our unit in March 1993, but since we were not in a position to pay that, the Corporation had accepted a cheque for Rs. 20,000 which was honoured and released our unit in July 1993. Prior to this payment we had paid the Corporation Rs. 2,10,000 in the preceding month.
You are, therefore, requested to release our unit immediately to enable us to restart the same and clear our debts. We wish to state that we shall approach the Corporation for one time settlement of our account within six months of handing over the unit as we hope to arrange the finances by then and settle the matter, once and in the meantime shall meet and pay the quarter interest of April, 1994, on time."
4. The above shows that there has been some sort of attachment and some understandings off and on developed between the parties as at one stage in July, 1993, the respondent-Corporation lifted the seizure and again reintroduced it (no material, however, is available to show that after the seizure was lifted it was effected once again by or under any proceeding or notice) and there were payments made in the meanwhile to get the seizure lifted and when reintroduced again some payment was made to get the seizure lifted and finally on December 27, 1993, the letter upon which no communication, according to the petitioner, followed.
5. An additional counter-affidavit has been filed on behalf of the respondents by one V. Ramachander, the district branch manager, which has almost an eyewitness account of the incidents on December 27, 1993, which is as follows :
"I am filing additional counter-affidavit to bring to the notice of the hon'ble court the action taken by the Corporation pursuant to the representation made by the managing director, Sri Vijaya Kumar of Vajra Chemicals Pvt. Ltd., on December 27, 1993, which was duly considered by the executive director of this respondent-Corporation. I state and submit that I was personally present in the chambers of the executive director of this respondent-Corporation on December 27, 1993. I submit that the managing director of Vajra Chemicals, Sri Vijaya Kumar, personally handed over the representation to the executive director, who had perused the same and after discussing the matter with me and the managing director of Vajra Chemicals, has taken a decision for lifting the seizure, subject to down payment of Rs. 30,000 and further subject to a payment of Rs. 50,000 in March, 1994, for which the managing director of Vajra Chemicals, was asked to give post-dated cheques. The decision taken by the executive director on December 27, 1993, was taken after the matter was discussed and a consensus was arrived at. Pursuant to the decision taken by the executive director the representation of the petitioner was communicated to the zonal manager, Sri P. V. B. Lakshminath, who had also concurred with the decision arrived at and made an endorsement to that effect on the said representation. I had also signed on the said representation. The said representation was also sent to the concerned recovery area officer who had also signed on the said representation on the same date.
I further state and submit that pursuant to the decision taken on the representation of the managing director of Vajra Chemicals, the undertaking given by the managing director for making the down payment of Rs. 30,000 and further payment of Rs. 50,000 by way of demand draft/cheques was not complied with. Further, the facts stated above were borne out by the very fact that the representation made by the managing director of Vajra Chemicals does not bear the inward stamp of this respondent-Corporation and the said representation was personally handed over by the managing director of Vajra Chemicals. I further state and submit that the decision taken by the executive director of this respondent-Corporation on December 27, 1993, was in the presence of the managing director of Vajra Chemicals amounts to due communication of the decision to the managing director of Vajra Chemicals.
I further state and submit in any event that this
respondent-Corporation has taken action pursuant to recall-cum-sale notice issued to the writ petitioner company on September 9, 1993.
I am advised to state and submit that the decision in Maharashtra State Financial Corporation v. Suvarna Board Mills, is clearly distinguishable on facts. Even
otherwise, I humbly submit as the decision taken on December 27, 1993, was taken in the presence of the managing director of Vajra Chemicals. It amounts to communication of the same to the managing director of Vajra Chemicals, to meet the requirements laid down in Maharashtra State Financial Corporation v. Suvarna Board Mills, in paragraph 6."
6. A Division Bench of the Supreme Court has settled the law as to recourse to section 29 of the State Financial Corporations Act in the case of A.P. State Financial Corporation v. Gar Re-Rolling Mills , and stated that the expression "without prejudice to the provisions of section 29 of the Act" as appearing in section 31 of the Act, clearly demonstrates that the Legislature did not intend to confine the Corporation to have recourse only to a particular remedy against the developing industrial concern for recovery of the amount due to it. It left the choice to the Corporation to act in the first instance under section 31 of the Act and save its rights and remedies under section 29 of the Act to be availed of at a later stage with a sole object of enabling the Corporation to recover its dues. However, the Corporation cannot simultaneously pursue two remedies at the same time. The reach and scope of the two remedies is essentially different even if a some what similar result followed by taking recourse to either of the provisions in some respects. The Supreme Court has also pointed out that the doctrine of election clearly suggests that when two remedies are available for the same relief, the party to whom the said remedies are available has the option to elect either of them but that doctrine would not apply to cases where the ambit and scope of the two remedies is essentially different. Speaking thus on the subject, the Supreme Court had laid down as follows (page 154) :
"The doctrine of election, as commonly understood, would, thus, not be attracted under the Act in view of the express phraseology used in section 31 of the Act, viz., 'without prejudice to the provisions of section 29 of this Act'. While the Corporation cannot simultaneously pursue the two remedies, it is under no disability to take recourse to the rights and remedy available to it under section 29 of the Act even after an order under section 31 has been obtained but without executing it and withdrawing from those proceedings at any stage, the use of the expression 'without prejudice to the provisions of section 29 of the Act' in section 31 cannot be read to mean that the Corporation after obtaining a final order under section 31 of the Act from a court of competent jurisdiction is denuded of its rights under section 29 of the Act. To hold so would render the above quoted expression as redundant in section 31 of the Act and the courts do not lean in favour of rendering words used by the Legislature in the statutory provisions redundant. The Corporation which has the right to make the choice may make the choice initially whether to proceed under section 29 of the Act or section 31 of the Act, but its rights under section 29 of the Act are not extinguished, if it decides to take recourse to the provisions of section 31 of the Act. It can abandon the proceedings under section 31 of the Act at any stage, including the stage of execution, if it finds it more practical, and may initiate proceedings under section 29 of the Act.
The relief available to the Corporation under section 29 of the Act to realise its dues in the manner prescribed therein is wider in scope than the limited relief available to it under section 31 of the Act and is not controlled by section 31 of the Act. The Legislature clearly intended to preserve the rights of the Corporation under section 29 of the Act, by expressly stating in section 31 of the Act, that its recourse to action under that section is without prejudice to the provisions of section 29 of the Act. What alone is not desirable or permitted by the Act is to pursue both the remedies simultaneously by the Corporation and not that it cannot withdrawn or abandon the proceedings initiated under section 31 at 'any stage' and then take recourse to the provisions of section 29 of the Act. Any interpretation which frustrates the right of the Corporation to recover its dues must be eschewed. Similarly, if in a given case, the Corporation has taken recourse to the provisions of section 29 of the Act, there is no bar for it without taking those proceedings to their logical conclusion to abandon them and approach the court under section 31 of the Act to seek one or more of the reliefs available to it under that section. Where, the defaulting party fails to honour the order or decree of the court made under section 31 of the Act, it has neither any legal nor even a moral right to object to the Corporation from taking recourse to the provisions of section 29 of the Act only on the ground that it has obtained a proper relief under section 31 of the Act which relief it does not wish to pursue any further. Indeed, if the order of the court issued under section 31 of the Act has been fully complied with and honoured by the defaulting concern, no occasion would arise for the Corporation to invoke the provisions of section 29 of the Act. However, to hold that since the Corporation has initially taken action under section 31 of the Act and obtained an order/decree from the court, the Corporation is prohibited from invoking the provisions of section 29 of the Act, notwithstanding the fact that the defaulting concern has not honoured the court's order or decree made under section 31 of the Act, would amount to putting premium on the activities of the defaulting concern aimed at frustrating the order/decree of the court and depriving the Corporation of recovering its legitimate dues and thereby rendering the expression 'without prejudice to ...' occurring in section 31 as otiose. Courts do not favour such a course.
There is no equity in favour of a defaulting party which may justify interference by the courts in exercise of its equitable extraordinary jurisdiction under article 226 of the Constitution of India to assist it in not repaying its debts. The aim of equity is to promote honesty and not to frustrate the legitimate rights of the Corporation which after advancing the loan takes steps to recover its dues from the defaulting party. Thus, the intention of the Legislature in using the expression 'without prejudice to the provisions of section 29 of the Act' clearly appears to be that recourse to the provisions of section 29 of the Act is not prohibited, where an order or decree under section 31 of the Act obtained by the Corporation has not been complied with or honoured by the defaulting concern or is otherwise insufficient to satisfy the dues of the Corporation and the Corporation withdraws and abandons to pursue further proceedings under section 31 of the Act. Passing a money decree for recovery of the outstanding dues, not being within the jurisdiction of the court under section 31 of the Act, the Corporation retains its right to recover its dues by invoking the provisions of section 29 of the Act in the manner prescribed therein notwithstanding any order, final or interim, obtained by it under section 31 of the Act by withdrawing from and abandoning those provisions at any stage of the proceedings. A court of equity, when exercising its equitable jurisdiction under article 226 of the Constitution must so act as to prevent perpetration of a legal fraud and the courts are obliged to do justice by promotion of good faith, as far as it lies within their power. Equity is always known to defend the law from crafty evasions and new subtleties invented to evade law. Since the Legislature enacted sections 29 and 31 with a view to aid the Corporation to recover its legitimate dues, etc., from the defaulting party, the saving clause in section 31 of the Act, preserving the rights under section 29 of the Act by giving up the pursuit under section 31 at any stage of the proceedings is available to the Corporation. The two provisions must be so harmonised as to facilitate the Corporation to recover its dues from the defaulting party. The Act was enacted by the Parliament with a view to promote industrialisation and offer assistance by giving financial assistance in the shape of loans and advances, etc., repayable in easy instalments. The Corporation has to recover the loans and advances, so as to be able to give financial resources assistance to other industries and unless it recovers its dues, the money will not remain in circulation for long. It is with this end in view that the Parliament gave the Corporation the right to proceed under section 31 of the Act, preserving at the same time its rights and remedy under section 29 of the Act, so that the Corporations are not chocked by the defaulting debtors by adopting frustrating or dilatory tactics in the proceedings in the court initiated under section 31 of the Act.
The right vested in the Corporation under section 29 of the Act is besides the right already possessed at common law to institute a suit or the right available to it under section 31 of the Act. Since, the Corporation can withdrawn from the court its proceedings under section 31 of the Act at any stage, it would imply that it has the right to withdraw from further proceedings under section 31 and 32 of the Act even after obtaining an order in its favour and take recourse to the proceedings under section 29 of the Act without pursuing the proceedings under section 31 of the Act any further. The Corporation cannot, indeed, execute the order under section 31 of the Act and yet simultaneously take recourse to proceedings under section 29 of the Act for the same relief. The position may also be different if the claim of the Corporation is negatived, on facts, by the court in the proceedings under section 31 of the Act. In that event depending upon the facts of each case, it may be permissible to hold that fair play and justice demand that the Corporation is not allowed to take recourse to the provisions of section 29 of the Act. Thus, from the above discussion it follows that the answer to the question posed in the opening part of the judgment is in the affirmative."
7. In U.P. Financial Corporation v. Gem Cap (India) Pvt. Ltd.  78 Comp Cas 408; AIR 1993 SC 1435, the Supreme Court has pointed out that 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, i.e., unreasonably. The Supreme Court has further pointed out (page 415) :
"While the former does not present any difficulty, the latter needs in little reiteration of its precise meaning. What does acting unfairly or unreasonable mean ? Does it mean that the High Court exercising its jurisdiction under article 226 of the Constitution can sit as an Appellate Authority over the acts and deeds of the Corporation and seek to correct them ? Surely, it cannot be. That is not the function of the High Court under article 226. The 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 may become rudderless."
8. Although the Supreme Court in this judgment has said that it was not the occasion to examine the content and contours of the doctrine of fairness, it did bring to focus the classic passage from the judgment of Lord Greene M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation  1 KB 223, 229, which reads as follows (page 416) :
"It is true the discretion must be exercised reasonably. Now what does that mean ? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with the discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority."
9. That natural justice will be one attendant for deciding whether the Corporation has acted fairly or not is stated by the Supreme Court in Maharashtra State Financial Corporation v. Suvarna Board Mills :
"It is well-settled that natural justice cannot be placed in a strait-jacket; its rules are not embodied and they do vary from case to case and from one fact-situation to another. All that has to be seen is that no adverse civil consequences are allowed to ensue before one in put on notice that the consequence would follow if one did not take care of the lapse, because of which the action as made known is contemplated."
10. The Supreme Court is this case examined whether a letter to the respondent that, if it would not clear the arrear within a fixed period, the hammer of section 29 would fall is sufficient notice or not and stated the principle as laid down in S. L. Kapoor v. Jagmohan, AIR 1981 SC 136, in these words (page 367 of 82 Comp Cas) :
"Let it be seen whether the respondent was sounded in advance that if it would not clear the arrears within a fixed period, the hammer of section 29 would fall. This was abundantly done, according to us. Of course, for this we shall have to ignore what had been stated in the letters of the Corporation issued in April and May, 1991, requiring clearance of dues, as what natural justice requires is to give opportunity to represent against the proposed action, as stated in paragraph 16 of S. L. Kapoor v. Jagmohan, . The
letters of April and May, 1991, did not speak about contemplated action with the aid of section 29. (The letter of December, 1990, stands on the same footing, besides being too remote). But then, the section 29 notice did call upon the respondent to repay the dues by January 21, 1992, failing which the respondent was put to notice that possession of its factory premises would be taken. This did meet the requirement of natural justice, according to us. No separate show-cause notice was required, as held by the High Court. Section 29 action could not have, therefore, been set at naught because of absence of an independent show-cause notice."
11. The Supreme Court, however, took notice of the fact that in response to the Corporation's letter, the respondent therein had made a representation and narrated the difficulties faced by it in repaying the loan as agreed to and given a fresh proposal how it would like to liquidate the dues and observed as follows (page 367) :
"The representation it is alleged was not at all attended to, not to speak of the same receiving due consideration. We should have thought that the appellant being a public body should have acted fairly and should have communicated its response to the representation. May be, because of the respondent being almost a chronic defaulter and its earlier cheques having even bounced, the assurances contained in its representation did not carry weight. Even so, before taking recourse to the drastic action of taking over possession, another assessment would have added credibility to its decision; it would have been better to do so.
As the representation of the respondent was not shown to have been considered by the appellant, we thought that we should ourselves allow the respondent to make a reasonable offer which could be taken as a sort of giving post decisional hearing by us, which would in some cases meet the call of natural justice. The case was adjourned for this purpose to August 2, 1994, after the hearing on other points was over on July 27, 1994. Learned counsel for the respondent submitted to us on August 3, 1994, that the possession of the factory should be handed over back to his client and out of the profit to be earned it would clear the dues. As to cash to be paid, about which also we had asked to get instructions, we were informed that a sum of Rs. 50,000 alone could be paid because of the present bad financial position of the respondent. We do not regard this stand as reasonable, as there is no knowing if the unit would at all become profitable at the hand of the respondent in view of how it had functioned earlier when it was being operated by it. The offer to pay Rs. 50,000, as against more than 5 lakhs which had become due by January, 1992, cannot also be regarded as reasonable."
12. The above appears to us to be area of judicial review of the action of the respondent-Corporation under section 29 of the State Financial Corporations Act, 1951. We have to see whether the
respondent-Corporation has acted fairly. Since there is no complaint before us that the Corporation had violated any law, the limited examination available for exercise of jurisdiction under article 226 of the Constitution is to see whether the Corporation can be said to have acted reasonably. The expression "reasonable" in the context of the action being fair is interchangeable with mala fides on the part of the Corporation as has been indicated in the judgment of the Supreme Court in the case of U.P. Financial Corporation v. Gem Cap (India) Pvt. Ltd.  78 Comp Cas 408; AIR 1993 SC 1435, and in particular in the quotation of the classic passage from the judgment of Lord Greene M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation  1 KB 223. We have support for the above from the judgment of the Supreme Court in U.P. Financial Corporation v. Naini Oxygen and Acetylene Gas Ltd. , in which it is stated :
"However, we cannot lose sight of the fact that the Corporation is an independent autonomous statutory body having its own constitution and rules to abide by, and functions and obligations to discharge. As such, in the discharge of its functions, it is free to act according to its own light. The views it forms and the decisions it takes are on the basis of the information in its possession and the advice it receives and according to its own perspective and calculations. Unless its action is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the courts or a third party to substitute its decision, however more prudent, commercial or business like it may be, for the decision of the Corporation. Hence, whatsoever the wisdom (or the lack of it) of the conduct of the Corporation, the same cannot be assailed for making the Corporation liable."
13. There are two stages at which, in our opinion, the respondent-Corporation is required to explain why it acted without informing the petitioner under section 29 of the Act, for selling the assets of the petitioner-company. The notice of seizure of the assets, it is not in dispute, was given by the respondent-Corporation to the petitioner/appellant. There were some stages of negotiations for repayment of loan and the Corporation appeared to accommodate the petitioner-company by re-scheduling the payment and lifting the seizure for the benefit of the petitioner-company. When, however, the petitioner failed to honour its commitments to repay the loan the Corporation decided to sell all the properties, there appears to be no independent notice except one by which the Corporation conveyed its demand and informed the petitioner that in the event of its not responding to the demand, the Corporation would be obliged to take steps for selling the unit. The petitioner/appellant responded to the same by the representation dated December 27, 1993. The executive director of the Corporation is credited with the endorsement thereon to the following effect :
"Discussed with the party. Please accept Rs. 0.30 lakhs as D.P. for lifting the seizure subject to party making a further payment of Rs. 0.50 lakhs in March, 1994, for which P.D. cheques may be collected. This is with a clear understanding that the loan account shall be settled on O.T.S. (one time settlement) within six months from the date of handing over the unit."
14. It is, however, conceded that there is no communication of this endorsement on the representation by the executive director to the petitioner. All that is sought to be canvassed is that what is endorsed was arrived at in course of the discussion with the petitioner and since it was so arrived at, the petitioner was fully apprised of the above and, thus, stood informed about the decision in this behalf. Can it be said on such facts that the Corporation had acted fairly or that its actions are reasonable ? As we understand the law on the subject, it is clear that the financial corporation even though acting administratively, has a duty to act fairly and reasonably and follow the principle that no serious civil consequence of its action be perpetrated without affording reasonable opportunity of being heard in the matter to the affected party. There is absolutely no attempt on the part of the Corporation to inform the petitioner about its steps to auction/sell the unit and also that the petitioner, if it was not able to repay the loan, could bring any purchaser who offered the maximum price for the unit. It is clear the facts as above that the petitioner had made a representation which received the attention of the executive director and he decided to give to the petitioner one more opportunity to repay the loan within a period of six months of course starting with an initial payment as indicated in the endorsement above quoted. The said decision of the executive director, of the Corporation, however, was not communicated to the petitioner. If statutory authorities are going to act in matters affecting public money and public interest on some arrangement orally arrived at by making endorsements in the files, they leave many traces of doubts, which they alone are expected to know and clarify. Had the above endorsement been communicated and still the petitioner defaulted, no blame could be put upon the Corporation that it acted arbitrarily and so unreasonably. Something which is not ex facie reasonable cannot become reasonable merely because one who has taken the decision has chosen to say so. There has to be some more material to show or suggest that all reasonable opportunity was afforded by it to the other, but it failed to respond and left no option but to sell the unit. Much can be said about the procedure adopted for the sale of the unit by the Corporation. We do not, however, propose to dilate more than stating that when the interest of the petitioner was likely to be affected by the sale of the property, the Corporation was expected to keep it informed about the steps taken for the sale by auction or by negotiation as the case may be. The petitioner in such a situation could have managed to find some way to ensure the repayment of the loan either by selling the assets all or in part or by raising loans from other sources. By such precaution, the Corporation on the one hand would have protected its own interest and the public interest of recovering the loan from the petitioner and on the other hand, the interest of the petitioner and the industry by affording opportunity to the petitioner to protect its interest to the extent possible. On the facts as above, we are inclined to take the view that the Corporation has not acted reasonably. It was on the wrong side of the public interest by not informing the petitioner of its intention to sell the property and of the proceedings of the auction sale of the property as well as its decision on the representation of the petitioner dated December 27, 1993.
15. We propose, however, to proceed in the instant case with all necessary precautions that the petitioner does not take any undue advantage of the court's interference in exercise of the option of the respondent-Corporation under section 29 of the State Financial Corporations Act. The petitioner has shown readiness to repay the loan in full in one lump sum and since it is almost in the shape of an undertaking on its behalf, we take it that it shall repay the loan within six weeks from the date of the order. During the pendency, however, of the proceedings the fifth respondent has deposited the purchase money in full amounting to Rs. 28 lakhs with the Corporation. The Corporation, it seems has delivered possession of the plant and machinery to the fifth respondent. It is obvious anything that has been done pending the adjudication by either the fifth respondent or the respondent-Corporation shall give no equity to them. It will still be inequitable in our opinion if the Corporation is not directed to repay the deposit by the fifth respondent towards the price of the assets allegedly sold by the respondent-Corporation to it. We are inclined for the said reason to order that on the petitioner repaying the loan with interest to the Corporation, the Corporation shall refund the amount deposited by the fifth respondent with it with interest at the same rate as realised from the petitioner on the loan amount and deliver possession of the assets (all the property) seized form the petitioner to the petitioner.
16. For the reason as above, it is not possible to sustain the summary rejection of the writ petition by the learned single judge. The order in the writ petition for the said reason is set aside. Consequently, the appeal is allowed and the respondents are directed the implement the directions as aforesaid, i.e., (1) the petitioner shall pay to the Corporation entire dues with interest within six weeks, (2) on receipt of payment from the petitioner, the Corporation shall refund to the fifth respondent the money deposited by it towards the purchase money with interest at the same rate as realised from the petitioner by it, and (3) the respondent-Corporation shall forthwith on receipt of payment from the petitioner deliver possession of the properties seized by it from the petitioner. No costs.