Judicial review limits in recovery action: High Court cannot reappraise a Financial Corporation's decision absent illegality or irrationality.

A High Court cannot, under Article 226, direct restoration of an industrial unit or re-examination of rehabilitation unless the Financial Corporation's action under Section 29 of the State Financial Corporations Act is illegal, in statutory breach, or so unfair or unreasonable that no reasonable authority would have acted likewise. The Corporation remains a creditor entitled to recover public funds and is not bound to revive every sick concern irrespective of cost. Judicial review does not authorise the High Court to sit in appeal over the Corporation's administrative decision. On the facts, the borrowers showed no real intention to repay, so the High Court's interference was beyond the proper limits of writ jurisdiction.

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Issues: Whether the High Court, in exercise of jurisdiction under Article 226, could interfere with the Financial Corporation's action under Section 29 of the State Financial Corporations Act, 1951 by directing restoration of the industrial unit and re-examination of rehabilitation, and whether the Corporation's decision was shown to be so unfair or unreasonable as to warrant such interference.

Analysis: The Corporation under the State Financial Corporations Act is a lender with a public purpose, but it remains a creditor entitled to recover public funds and is not bound to revive every sick concern irrespective of cost. Judicial review under Article 226 does not permit the High Court to sit as an appellate authority over administrative decisions of the Corporation. Interference is justified only if there is a statutory violation or if the Corporation acts so unfairly or unreasonably that no reasonable person would have so acted. The doctrine of fairness does not abolish administrative discretion or convert writ jurisdiction into appellate scrutiny. On the facts, the borrowers showed no real intention to repay and the High Court's directions were treated as beyond the proper limits of judicial review.

Conclusion: The High Court's interference was unjustified and the Corporation's action was not shown to be illegal or unfair within the meaning required for writ intervention; the issue is decided in favour of the appellant.

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