Informal government suggestions cannot bind a State Financial Corporation's policy choice or justify mandamus without a clear legal duty.

Informal proceedings and a follow-up letter from an inter-departmental meeting were not binding directions of the State Government under section 39 of the State Financial Corporations Act, 1951, because they amounted only to suggestions and a proposal for Board consideration. The Corporation's Board independently decided not to extend the interest benefit for the earlier period, and that policy decision remained the Corporation's own. A writ of mandamus could not issue because no enforceable legal right or corresponding statutory duty was shown, and the financial policy choice was not subject to light interference under Article 226.

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Issues: (i) Whether the proceedings and letter issued in the inter-departmental meeting constituted binding directions of the State Government under section 39 of the State Financial Corporations Act, 1951. (ii) Whether the Court could issue a writ of mandamus to compel the Corporation to pass on the interest benefit and interfere with the Board's policy decision.

Issue (i): Whether the proceedings and letter issued in the inter-departmental meeting constituted binding directions of the State Government under section 39 of the State Financial Corporations Act, 1951.

Analysis: The material showed that the meeting records and the follow-up letter only reflected suggestions, requests and a proposal that the matter be placed before the Board of Directors for a decision. They did not amount to a formal policy instruction issued by the State Government in consultation with, and after obtaining the advice of, the Development Bank. The Board of Directors considered the matter independently and took a decision not to grant the relief for the earlier period.

Conclusion: The communications were not binding directions under section 39 of the State Financial Corporations Act, 1951, and the decision remained that of the Corporation's Board.

Issue (ii): Whether the Court could issue a writ of mandamus to compel the Corporation to pass on the interest benefit and interfere with the Board's policy decision.

Analysis: A writ of mandamus lies only to enforce an existing legal right and a corresponding legal duty. The appellants failed to show any constitutional or statutory right requiring the Corporation to avail the SIDBI offer or to extend the benefit for the disputed period. The impugned decision was one of business and financial policy, taken after considering the burden on the Corporation and the interest of industry, commerce and the general public, and such a decision was not amenable to light interference under Article 226 of the Constitution of India.

Conclusion: No mandamus could be issued, and the Board's policy decision was not liable to be disturbed.

Final Conclusion: The writ appeals failed because no enforceable legal right or binding governmental direction was established, and the Corporation's policy choice was left undisturbed.

Ratio Decidendi: A court will not issue mandamus to compel a State Financial Corporation to adopt a particular financial policy in the absence of a clear legal duty, and informal governmental suggestions do not amount to binding directions under section 39 of the State Financial Corporations Act, 1951.

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