Judgment S. B. Sinha, J. 1. In this application the petitioner has inter alia prayed for issuance of a writ of mandamus directing the respondent No.1 corporation to release the term loan as also the respondent No.2 bank for sanction and release of working capital loan in favour of the petitioner. 2. Mr. T. K. Jha, learned Senior Counsel appearing on behalf of the petitioner, however, at the time of hearing, however, made submissions only with regard to the grant of sanction and release of working capital loan by the respondent No.2 in favour of the petitioner. 3. The petitioner intended to set-up an unit for manufacture of n. P. K. Granulated Mixed Fertilizers of different grades and for the said purpose on or about 30th July, 1985, applied for grant of term loan amounting to Rs 25.50 lacs before the respondent No.1 An application for grant of working capital loan was also made before Kishanganj, Branch of the Allahabad Bank. Initially the capital cost of the Unit, was approved by the respondent for a sum of Rs.40.80 lacs but a revised project report was made wherein the capital cost of the unit was enhanced to Rs.65.24 lacs. 4. The petitioner, thereafter, prayed for grant of enhanced loan before the respondent No.1. The petitioner further made an application before the Kishanganj Branch of the respondent No.2. for grant of working capital loan. Allegedly the respondent No.2 intimated the petitioner that it had been examining the suitability of the loan proposal. 5. It appears that one Jamal Ahmad was the Managing Director of the petitioner company. He took various loans from another Bank but did not repay the same. The said Jamal Ahmad allegedly resigned as Managing director of the petition Company and allowed induction of Mrs. Razia jamal (wife of the aforementioned Mr. Jamal Ahmad) as Managing Director of the petitioner Company. 6. By a letter dated 22-4-1988 as contained in Annexure-6 to the writ application, allegedly the Branch Manager of Respondent No.2 informed the petitioner in the following terms :- "we refer to the above. Razia jamal (wife of the aforementioned Mr. Jamal Ahmad) as Managing Director of the petitioner Company. 6. By a letter dated 22-4-1988 as contained in Annexure-6 to the writ application, allegedly the Branch Manager of Respondent No.2 informed the petitioner in the following terms :- "we refer to the above. In the changed perspective when the resignation of shri Jamal Ahmad, Managing Director of the Company has since been accepted by the B. S. F. C. and they have been pleased to release further funds of setting up tbe proposal plant shordly, as reported, we may consider the at appropropriate time, provided it is found suitable to the Bank and you agree to the Banks usual terms and condition of advance. You should also arrange for suitable and adequate collaterials including immovable assets. We observe from the particulars of borrower furnished by you to us that you are in comfortable position to offer suitable collaterials as mentioned therein," 7. The respondent No.1 appears to have sanctioned an additional term loan of Rs.24.22 lacs to the petitioner company as is evident from the sanction order dated 17th January, 1989 (Annexure-7 ). According to the petitioner it has also invested Rs, 7,26,356.17 P. 8. The petitioner applied before the respondent No.1 for release of the sanctioned amount, but by a letter dated 3-3-1989 (Annexure-10), the petitioner was informed by it that unless the State Bank of India or any other commercial Bank did not sanction the working capital loan, the additional term loan shall not be released. 9. The petitioner has contended that when the matter was being pursued in right earnest with the Branch Manager of the respondent No.2, he demanded an illegal gratification of Rs.1,00,000/- and on the petitioners inability to accede to the said illegal demand, the said Officer started writing letters that the petitioner has made misrepresentations before the respondent no.2. The said letters dated Ist March, 1989 and 14th March, 1989 are contained in Annexures 12 and 13 to the writ application. 10. According to the petitioner he had given satisfactory replies to the bank meeting the points raised by its Branch Manager. The said letters dated Ist March, 1989 and 14th March, 1989 are contained in Annexures 12 and 13 to the writ application. 10. According to the petitioner he had given satisfactory replies to the bank meeting the points raised by its Branch Manager. By a letter dated 3rd May, 1989 as contained in Annexure-14 to the writ application, the respondent No.2 refused to consider the petitioners proposal for grant of working capital loan purported to on the following grounds :- " (1) Allahabad Bank, Kishanganj had assured the petitioner earlier, for working capital finance. But the petitioner failed to explain satisfactorily about the reasons of their withdrawal from such assurance ; (2) The project of the petitioner has already cost over-run due to delayed implementation and, as such, the viability of the project has become extremely doubtful ; and (3) The present Directors of the Company are related to the previous Managing Director Sri Jamal Ahmad who was defaulter to the Central Bank of India. " 11. The petitioner, thereafter, sent an application for reconsideration of the said matter before the Regional Manager and by a letter dated 25th may, 1989 the Regional Manager of the repondent No.2 also rejected the prayer of the petitioner. The petitioner thereafter made a request to the chief General Manager of the respondent No.2 and a meeting was held amongst the members of the Small Standing group consisting of respondent nos.1 and 2, the representatives of the Reserve Bank of India and the industrial Development Bank on 28th November, 1989. Allegedly in the said meeting the Bank waived all its objections but four conditions were chalked out for grant of loan which are as follows :- " (1) Mr. Jamal Ahmad should liquidate the loan of Central Bank of India : (2) The company should provide adequate security to over the working capital finance ; (3) Some additional Directors of good means be inducted who should be prepared to invest sufficient fund in the project and, (4) Second charge of fixed assets of the B. S. F. C, should be created in favour of the Bank. " 12. The said decision was communicated to the petitioner by a letter dated 28th December, 1989. 13. " 12. The said decision was communicated to the petitioner by a letter dated 28th December, 1989. 13. However, by another letter dated 7th March, 1990 (Annexure-18)the Regional Manager of the respondent No.2 informed the petitioner that it is not ready to take the risk of sanctioning for working capital loan to the petitioner company as allegedly the present Director failed to satisfy the bank on the economic and managerial aspect of the project. 14. The petitioner took up the matter with the Chief General Manager bv its letter dated 20th March, 1990 which is contained in Annexure-19 to the writ application. In the meanwhile, the petitioner also took up the matter with the respondent-Corporation and another meeting was held amonest the members of the standing group. A recommendation was made by the respondent No.1 to respondent No.2 for grant of working capital loan. 15. According to the petitioner the project was revised and another application for reconsideration of sanction for grant of working capital loan was filed. Thereafter another meeting was held but ultimately the petitioners application was rejected. 16. The State Bank of India has filed a counter-affidavit wherein inter-alia it has been contended that a series of discussions were held with various authorities and the petitioner, and it was found that no sanction for grant of working capital loan to the petitioner can be granted, firstly because the allahabad Bank who had earlier assured the petitioner for sanction of the working capital loan, withdrew its offer and in relation thereto, the petitioner could not give any satisfactory explanation, secondly the viability of the project was found to be extremely doubtful and thirdly the Managing Director of the Company Shri Jamal Ahmad who was subsequently resigned from the directorship by making his wife. Mrs Jamal, the Managing Director, was a defaulter to Central Bank of India, Kishanganj Branch which had adversely affected the credibility of the promoters ot the Company in the marketing affecting the business prospects. The respondent No 2 has further contended that the matter relating to sanction of working capital loan to the petitioner was reexamined on different occasions, upon intervention of the Religious and linguistic Minorities Commission, but the petitioner company was still not considered to be a viable proposal for grant of loan for several reasons. The respondent No 2 has further contended that the matter relating to sanction of working capital loan to the petitioner was reexamined on different occasions, upon intervention of the Religious and linguistic Minorities Commission, but the petitioner company was still not considered to be a viable proposal for grant of loan for several reasons. It was further submitted that at the instance of Minority Commission, a joint meeting with it was held by the respondent Bank, on 25-7-1991 and 26-7-1991, and in the sais discussions it was found that the proposal in question to be a banking risk. 17. The respondent-Bank has contended that the application of the petitioner had received meticulous consideration at various levels but as it was found that the project was no worth financing, it was not possible to sanction working capital loan to the petitioner. 18. Mr T. K. Jha, learned counsel appearing on behalf of the petitioner has raised a short question in support of this application. The learned counsel submitted that from a perusal of Annexure-6 to the writ application, it writ application, it would appear that the State Bank of India itself gave out a proposal for grant of working capital assistance and thus a promise having been made, and the respondent No.2 being bound thereby is estopped and precluded from denying the facilities of grant of working capital loan to the petitioner. 19. The learned counsel in this connection has strongly relied upon a decision of the Supreme Court in Gujarat State Financial Corpn. V/s. M/s Lotus hotels Pvt, Ltd, reported in AIR 1983 SC 848 . 20. The learned counsel further submitted that at least one of the grounds upon which the grant of said loan was denied, namely the Managing directorship of Jamal Ahmad being non-est, the impugned action on the part of the respondent No.2 must be held to be arbitrary and thus violative of articles 14 and 16 of the Constitution of India. 21. Mr. S. K. Sinha, the learned counsel appearing on behalf of respondent No.2 Bank, on the other hand, submittted that in the facts and circumstances of the case, the doctrine of promissory estoppel has no application whatsoever. 21. Mr. S. K. Sinha, the learned counsel appearing on behalf of respondent No.2 Bank, on the other hand, submittted that in the facts and circumstances of the case, the doctrine of promissory estoppel has no application whatsoever. According to the learned counsel the matter had been considered times and against by the respondent No.2 and detailed project report was prepared and only thereafter the respondent No.2 came to the conclusion that grant of working capital loan to the petitioner would not be economically viable. It was further submitted that credibility of the promoters is one of the consideration for a financial institution in the matter of grant of loan. 22. In Gujarat State Financial Corporations case (Supra) the supreme Court held that an instrumentality of the State should not commit breach of a solemn undertaking on which other side has acted and then contend that the party suffering by the breach of contract may sue for damages but cannot compel specific performance of the contract. 23. The Supreme Court observed :- "the agreement to advance the loan was entered into in performance of the statutory duty cast on the corporation by the statutory under which it was created and set up. On its solemn promise evidenced by the aforementioned two documents, the respondent incurred expenses, suffered liabilities to set-up a hotel Presumably, if the loan was not forthcoming, the respondent may not have undertaken such a huge project. Acting on the promise of the appellant evidenced by documents, the respondent proceeded to suffer further liabilities to implement and execute the project. In the back-drop of this incontrovertible fact situation, the principle of promissory estoppel would come into play. " 24. It is, therefore, clear that in that case not only there was a statutory contract but promise to advance loan had been made by entering into agreements in writing. 25. There cannot be any doubt that a state within the meaning of article 12 of the Constitution of India would be bound by the promises held out by it if a person relying on or on the basis thereof alters his position. 26. However, in this case, no promise as such was made by the respondent No.2 to advance working capital loan. 26. However, in this case, no promise as such was made by the respondent No.2 to advance working capital loan. In the letter dated 22-4-1988 the following is the text of the alleged promise:- "we may consider the proposal at appropriate time provided it is found suitable to the Bank and you agree to the Banks usual terms and conditions of the advance. " It is, therefore, clear that bank was only to consider the proposal for grant of loan at appropriate time provided it was found suitable to the Bank. The same does not constitute any promise. In any event, the banks agreement to consider the proposal was not absolute but a conditional one. 27. The State Bank of India, although is a state within the meaning of Article 12 of the Constitution of India, but it is basically a commercial organisation. Being a commercial organisation its first and foremost consideration normally would be to protect its own interest. It may grant loan to any person only when it finds that its investment would be safe. The bank may refuse to grant loan once it is found that it would be taking under risk in advancing a huge amount. 28. In Life Insurance Corporation of India V/s. Escorts Limited reported in AIR 1986 SC 1370 , the Supreme Court observed :- "while we do not for a moment doubt that every action of the State or on instrumentality of the State must be informed by reason and that, in appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution, we do not construe Article 14 as a charter for judicial review to State actions and to call upon the State to account for its actions in its manifold activities by reasons for such actions," 29. In relation to the contractual obligation of the State the Supreme court observed :- "if the action of the State is related to contractual obligation or obligations arising out of the court, the Court may not ordinarily examine it unless the action has some public law character attached to it. In relation to the contractual obligation of the State the Supreme court observed :- "if the action of the State is related to contractual obligation or obligations arising out of the court, the Court may not ordinarily examine it unless the action has some public law character attached to it. Broadly speaking, the court will examine actions of State if they pertain to the public law domain and refrain from examining them if pertain to the private law filed The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of the action and a host of other relevant circumstances. " 30. The Supreme Court further proceed to observe :- "when the State or an instrumentality of the State ventures into the corporate world and purchases the shares of a company, it assumes to itself the ordinary role of a shareholder, and done the robes of a shareholder, with all the rights available to such a shareholder. There is no reason why the State as a shareholder should be expected to state its reason when it seeks to change the management, by a resolution of the company like any other shareholder. " 31. The instant case, in my opinion comes within the purview of private law field. 32. The State Bank of India is entitled to make its own study on project and prepare a report therefor and may refrain from advancing any loan in terms of the said report, if it is found that the project will not be economically viable. The court in exercise of its jurisdiction under Article 226 of the constitution of India cannot arrogate to itself the role of the respondent No.2. The court has no jurisdiction to interfere with a decision of a banking organisation, unless the same is manifestly seems to be arbitrary or malafide. The reason assigned by the respondent No.2 in refusing to grant loan to the petitioner can neither be said to be unreasonable nor can be termed to be arbitrary. 33. The court has no jurisdiction to interfere with a decision of a banking organisation, unless the same is manifestly seems to be arbitrary or malafide. The reason assigned by the respondent No.2 in refusing to grant loan to the petitioner can neither be said to be unreasonable nor can be termed to be arbitrary. 33. In M/s. Amrapali Films Limited V/s. State of Bihar, reported in 1989 pur page 199 a division Bench of this court has held that alternation of position is sine-qua-non for invoking the doctrine of promissory Estoppel. In such a case a binding agreement between promissory and the promissee is a must. As noticed hereinbefore, there is no binding agreement by and between the petitioner and the respondent No.2. 34. For the reasons aforementioned, there is no merit in this application, which is accordingly dismissed but in the facts and circumstances of the case, there will be no order as to costs. Application dismissed