TaxTMI 
TaxTMI 
2002 (1) TMI 1266
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....ction letter dated 16.10.1992 a sum of Rs.7,48,000/- was sanctioned. The loan was to be repaid in 8 years, to be counted from the date of execution of the mortgage deed. The repayment of the loan was to be made in 15 half yearly instalments. Said repayment was to commence within 13 months from the first disbursement of the loan. The first 13 instalments of payment were to be of Rs.50,000/- each and the last two instalments were to be of Rs.49,000/-each, towards principal. Apart from the repayment of principal amount, the respondents were required to pay, inter alia, interest which became due along with the respective instalment towards the principal amount. Respondent no.1 mortgaged its land, building and machinery in favour of the Corporation. In the mortgage deed it was categorically mentioned that loan instalments were to be disbursed on the basis of securities created by the borrowers and as and when enough securities were created, the loan amount was to be disbursed. According to the Corporation, the said method was adopted so as to safeguard the interest of the Corporation and also to ensure that the money taken as a loan from the Corporation is being utilized for the purpose....
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.... judgment, the challenge was negatived. It was held that there was no merit in the appeal in view of what has been stated by this Court in Mahesh Chandra's case (supra). In support of the appeal, learned counsel for the Corporation submitted that the courts below erred in placing reliance on the decision in Mahesh Chandra's case (supra) without noticing the distinguishing factual backgrounds. It was submitted that the courts below did not apply the decision of this Court in U.P. Financial Corporation vs. Gem Cap (India) Pvt. Ltd. & Ors. (1993 (2) SCC 299) which was squarely applicable. The principles to be applied in a case where action under Section 29 of the Act is sought to be taken by the Corporation have been elaborately dealt with in the said case. It is also submitted that the decision in Mahesh Chandra's case (supra) requires reconsideration in view of what has been stated in latter decisions, more particularly, in Gem Cap's case (supra). It is submitted that on the facts as noted by the courts below, ample opportunity was granted to the respondents to make payment. Requests for rescheduling the instalments were accepted. Notwithstanding such adjustments, respondents did n....
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....ing financial assistance. As was observed by this Court in Gem Cap's case (supra), the legislative intent in enacting the statute in question was to promote industrialization of the States by encouraging small and medium industries by giving financial assistance in the shape of loans and advances, repayable within a stipulated period. Though the Corporation is not like an ordinary moneylender or a bank which lends money, there is purpose in its lending i.e. to promote small and medium industries. The relationship between the Corporation and the borrower is that of creditor and debtor. That basic feature cannot be lost sight of. A Corporation is not supposed to give loan and then to write if off as a bad debt and ultimately to go out of business. As noted above, it has to recover the amounts due so that fresh loans can be given. In that way industrialization which is the intended object can be promoted. It certainly is not and cannot be called upon to pump in more money to revive and resurrect each and every sick industrial unit irrespective of the cost involved. That would be throwing good money after bad money. As was rightly observed in Gem Cap's case (supra), promoting industri....
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.... In matters like the present one, fairness cannot be a one- way street. Corporations borrow money from the Government or other financial corporations and are required to pay interest thereon. Where the borrower has no genuine intention to repay and adopts pretexts and ploys to avoid payment, he cannot make the grievance that Corporation was not acting fairly, even if requisite procedures have been followed. The obligation to act fairly on the part of the administrative authorities was evolved to ensure the rule of law and to prevent failure of justice. This doctrine is complementary to the principles of natural justice which the quasi-judicial authorities are bound to observe. It is true that the distinction between a quasi-judicial and the administrative action has become thin, as pointed out by this Court as far back as 1970 in A.K. Kraipak V. Union of India [1969 (2) SCC 262]. Even so the extent of judicial scrutiny/judicial review in the case of administrative action cannot be larger than in the case of quasi-judicial action. If the High Court cannot sit as an appellate authority over the decisions and orders of quasi-judicial authorities, it follows equally that it cannot do....
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....nomous 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 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 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 businesslike it may, for the decision of the Corporation. As was observed by this Court in U.P. Financial Corporation and Ors. vs. Naini Oxygen & Acetylene Gas Ltd. and Anr. (1995 (2) SCC 754), in commercial matters the courts should not risk their judgments for the judgments of the bodies to whom that task is assigned. As was rightly observed by this Court in Karnataka State Financial Corporation vs. Micro Cast Rubber & Allied Products (P) Ltd. & Ors. (JT 1996 (6) SC 37), in the matter of action by the Corporation in exercise of the powers conferred on it under Section 29 of the Act, the scope of judicial review is....
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....o be understood that in every case the Corporations shall take recourse to action under Section 29. Procedure to be followed, needless to say, has to be observed. If any reason is indicated or cause shown for the default, same has to be considered in its proper perspective and a conscious decision has to be taken as to whether action under Section 29 of the Act is called for. Thereafter, the modalities for disposal of seized unit have to be worked out. The view expressed in Gem Cap's case (supra) appears to be more in line with the legislative intent. Indulgence shown to chronic defaulter would amount to flogging a dead horse without any conceivable result being expected. As the facts in the present case show not even a minimal portion of the principal amount has been repaid. That is a factor which should not have been lost sight by the courts below. It is one thing to assist the borrower who has intention to repay, but is prevented by unsurmountable difficulties in meeting the commitments. That has to be established by adducing material. In the case at hand factual aspects have not even been dealt with, and solely relying on the decision in Mahesh Chandra's cases (supra), the matt....
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....to explain and not to define. Judges interpret statues, they do not interpret judgments. They interpret words of statutes, their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. v. Horton (1951 AC 737 at P. 761), Lord Mac Dermot observed: "The matter cannot, of course, be settled merely by treating the ipsissima vertra of Willes, J. as though they were part of an Act of Parliament and applying the rules of interpretation appropriate thereto. This is not to detract from the great weight to be given to the language actually used by that most distinguished judge." In Home Office v. Dorset Yacht Co. (1970 (2) All ER 294) Lord Reid said, "Lord Atkin's speech..is not to be treated as if it was a statute definition. It will require qualification in new circumstances." Megarry, J. in (1971) 1 WLR 1062 observed: "One must not, of course, construe even a reserved judgment of even Russell L.J. as if it were an Act of Parliament." And, in Herrington v. British Railways Board, (1972) 2 WLR 537 Lord Morris said: "There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that j....