G. P. MATHUR, J. ( 1 ) THE prayers made in the first writ petition are for issuing a writ of certiorari to quash the agreement dated 3. 4. 1996 and for issuing a writ of mandamus commanding the Uttar Pradesh financial Corporation to refund Rs. 20,65,279. 89 along with the interest to the petitioner. The prayer made in the second writ petition is that the order dated 20. 4. 2001 passed by the Regional manager. Uttar Pradesh Financial Corporation, Meerut be quashed and the respondents be restrained from Initiating any recovery proceedings against the petitioners. The controversy involved in both the writ petitions is interconnected and, therefore, they are being disposed of by a common order. ( 2 ) THE case set up in Writ Petition No. 21789 of 1999 is as follows : the petitioner No. 1 M/s. Greenfield Corporation Ltd. , is a public limited company and the petitioner No. 2 Sri Sunil Dublish is the Managing Director of the company. The petitioner No. 1 took loan from the Uttar Pradesh Financial Corporation (hereinafter referred to as the U. P. F. C. ). An agreement was executed by petitioner No. 1 on 3. 4. 1996 whereunder the U. P. F. C. purchased 1. 50,000 equity shares of face value of Rs. 10 of petitioner No. 1. It was also agreed by petitioner No. 1 that it shall buy back 75,000 equity shares within six months of the Investment in the issue at a price of Rs. 11. 80 per share and the remaining 75,000 equity shares within six to twelve months of the Investment in the issue at a price of Rs. 13. 60 per share. The agreement provided that the U. P. F. C. shall also have the right to off-load the equity shares in phased manner in open market. In pursuance of the agreement, the U. P. F. C. made an application on 8. 4. 1996 for purchase of 1,50,000 equity shares along with a bank draft of Rs. 15 lakhs. The petitioner company approached the U. P. F. C. for grant of working capital term loan of Rs. 35 lakhs and Brand Equity Loan of Rs. 20 lakhs in March. 1997. The request of the petitioner was accepted and the U. P. F. C. agreed to grant the aforesaid loans. 15 lakhs. The petitioner company approached the U. P. F. C. for grant of working capital term loan of Rs. 35 lakhs and Brand Equity Loan of Rs. 20 lakhs in March. 1997. The request of the petitioner was accepted and the U. P. F. C. agreed to grant the aforesaid loans. After sanctioning the two loans, the U. P. F. C. issued a cheque for Rs. 14,34,720. 12 only as an amount of Rs. 20,44,279. 89 was deducted towards buy back of shares in accordance with agreement dated 3. 4. 1996, a sum of Rs. 15. 600 towards incidental expenses and a sum of Rs. 3,500 towards L. R. Account were also deducted and in this manner Rs. 20,65,279. 89 was deducted from out of the sanctioned loan of rs. 35 lakhs. The petitioners contend that the agreement dated 3. 4. 1996 contravenes Section 77 of the Indian Companies Act and consequently, the same was not enforceable and, therefore, the u. P. F. C. is not entitled to deduct any amount from the sanctioned loan of Rs. 35 lakhs and the amount of Rs. 20,65,279. 89 deducted by it should be refunded to the petitioner. ( 3 ) THE stand of U. P. F. C. in the counter-affidavit filed by it is that the petitioner No. 1 was initially a private limited company which became a pubic limited company on 12. 6. 1995 and it came out with a public issue sometimes in February, 1996. The petitioners vide their letter dated 5. 2. 1996 requested U. P. F. C. to purchase 1. 50,000 equity shares of petitioner No. 1 having the face value of Rs. 10 on the terms and conditions which may be mutually agreed upon. The matter was personally discussed by the petitioner No. 2 with the officers of U. P. F. C. and it was agreed that in case of failure of petitioner No. 1 to repurchase the shares within the time specified in the agreement, the repayment of the petitioner towards principal and interest shall be first adjudged towards buy back of equity shares- It was the petitioners who induced U. P. F. C. to purchase the shares of petitioner No. 1 by assuring that the annualised return on the shares would be 36% and by promising that within the specified period, the petitioners would repurchase the shares. It is averred in para 15 of the counter-affidavit that after expiry of the period of six months, the u. P. F. C. asked the petitioners on various occasions to repurchase the shares in accordance with the agreement but they refused to do so. Subsequently, the petitioners approached the U. P. F. C. for grant of working capital loan and Brand Equity Loan and at that time, they requested the u. P. F. C. to disburse loan after adjusting the price of the shares under the buy back arrangement, it was on this understanding and arrangement that the second loan was sanctioned to the petitioner and the amount was disbursed after adjusting the price of the shares. ( 4 ) SRI Ravi Kant, learned senior counsel for the petitioners, has urged that Section 77 of the companies Act interdicts any agreement enabling the company to buy back its own shares. In fact the contravention of Subsections (1) to (3) of Section 77 makes every officer of the company who is in default liable for punishment with fine which may extend to one thousand rupees. In view of the prohibition contained in Section 77 of the Companies Act, the agreement dated 3. 4. 1996 was hit by Section 23 of the Contract Act and was therefore, void and unenforceable being contrary to public policy. Sri A. K. Gaur appearing for U. P. F. C. has submitted that the petitioners themselves induced the U. P. F. C. to purchase, 1,50,000 equity shares of the company with the clear understanding that they would buy back the shares after expiry of six months at a certain rate. No duress or coercion had been exerted by the U. P. F. C. at the time of the execution of the agreement and the agreement was voluntarily executed by the petitioners, in its favour. There was absolutely no element of compulsion on the part of the answering respondent. It has also been urged that the petitioners having taken advantage of the agreement under which the u. P. F. C. paid Rs. 15 lakhs to them, it is not open to the petitioners to turn round and to contend now that the agreement is void and the amount deducted by the U. P. F. C. towards the price of the shares from the second loan of Rs. 35 lakhs be refunded to them. 15 lakhs to them, it is not open to the petitioners to turn round and to contend now that the agreement is void and the amount deducted by the U. P. F. C. towards the price of the shares from the second loan of Rs. 35 lakhs be refunded to them. ( 5 ) BEFORE considering the rival contentions, it is necessary to reproduce the agreement dated 3. 4. 1996 which is as under : agreement TO BUY BACK SHARES in consideration of your having agreed at our request to purchase 1,50,000 shares of the face value of Rs. 10 each of M/s. Green Field Corporation Ltd. I/we do hereby undertake as follows : 1. That I/we or our nominee shall buy-back the equity shares subscribed by the Corporation in the following manner : (a) 75,000 equity shares within 6 months of the investment in the issue at a priceof Rs. 11. 80 each ; and (b) 75,000 equity shares within 06 to 12 months of the investment in the issue at a price of Rs. 13. 60 each. 2. That Corporation shall have the right to off-load the equity shares in phased manner in open market. If the market price of the shares after listing is more than the above mentioned prices. However, in such a case, corporation shall first offer the shares to me/us only and if I/we dont agree within 2 days to repurchase the shares as offered, then Corporation shall have the option to sell the equity shares in the open market. 3. That Corporation shall have the right to charge interest @ 24% on the amount arrived by multiplying number of shares with buy-back price of the shares for the delayed period. However. Corporation shall charge an additional interest at a higher rate i. e. , 7. 5% p. a. over and above the stipulated rate of interest hereinabove mentioned for any period in the particular quarter and on the amount in respect of which I fail to comply with the obligation incidental to it beyond the period as mentioned in Sub-clause (a), (b) and (c) of Clause 2. The interest shall be paid on 20th march, June and December for each respective quarter. In the event of failure to repay the interest and other charges as mentioned above. The interest shall be paid on 20th march, June and December for each respective quarter. In the event of failure to repay the interest and other charges as mentioned above. Corporation shall have the right to enforce the security and shall also have the right to recover the amount due as an arrears of land revenue. 4. That W. C. T. L. and F. A. T. L. availed by the company shall be subordinate to the buy-back arrangement. If I/we fail to buy back the shares at the amount and within the period mentioned above, the repayment of Company towards principal and interest shall be first adjusted towards buy-back of equity shares as mentioned above. Dated : 3. 4. 1996 For Greenfield Ltd. Sd/-Received from U. P. FINANCIAL CORPORATION an application form for 1,50,000 equity shares along with Bank Draft No. 053785 dated 4. 4. 1996 amounting to Rs. 15. 00. 000 (Rupees fifteen lakhs) only payable at NOIDA. For Greenfield Corporation Limited sd/-Dated : 9. 4. 1996 ( 6 ) THE main contention of learned counsel for the petitioners is based upon Section 77 of companies Act and, therefore, it will be convenient to refer to relevant provisions of the same. Sub-sections (1) and (4) of Section 77 of Companies Act read as under : "77. (1) No company limited by shares and no company limited by guarantee and having a share capital, shall have power to buy its own shares, unless the consequent reduction of capital is effected and sanctioned in pursuance of Sections 100 to 104 or of Section 402. (2 ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3 ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) If a company acts in contra vent, on of Sub-sections (1) to (3), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to one thousand rupees. " the agreement dated 3. 4. . . . . . . . . . . . . . . . . (4) If a company acts in contra vent, on of Sub-sections (1) to (3), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to one thousand rupees. " the agreement dated 3. 4. 1996 has been described as "agreement to buy-back shares" and was signed by the petitioners only. It is a unilateral agreement executed by the petitioners and it does not contain signature of anyone on behalf of U. P. F. C. The opening part of the agreement says "in consideration of your having agreed at our request to purchase 1,50,000 shares of the face value of Rs. 10 each of M/s. Green Field Corporation Ltd. , I/we do hereby undertake as follows". Para 1 of the agreement thereafter says "that I/we or our nominee shall buy-back the equity shares subscribed by the Corporation in the following manner. " The language used in the agreement clearly shows that U. P. F. C. had agreed to purchase 1,50. 000 equity shares at the request of the petitioners and an undertaking was given by the petitioners to buy back the shares in the manner prescribed in the agreement. There is no material on record to indicate that any duress or coercion was exerted by the U. P. F. C. upon the petitioners to enter into the aforesaid agreement and the same appears to be a voluntarily act of theirs. ( 7 ) IT appears to us that the purpose of entering into the agreement was two fold. Normally when the U. P. F. C. grants loan to any company or entrepreneur, it secures the loan by creating a mortgage or by hypothecation of property, etc. Besides that a deed of guarantee has also to be executed for repayment of loan by the directors of the company. Here the petitioners got Rs. 15 lakhs without offering any security or deed of guarantee. The petitioners got another advantage. The petitioner No. 1 (company) came out with a public issue of its equity shares. The petitioner no. 1 (company) had not been floated by any well-known business house and there was hardly any chance of their public issue being subscribed by common public. 15 lakhs without offering any security or deed of guarantee. The petitioners got another advantage. The petitioner No. 1 (company) came out with a public issue of its equity shares. The petitioner no. 1 (company) had not been floated by any well-known business house and there was hardly any chance of their public issue being subscribed by common public. A copy of the prospectus of the public issue raised by the petitioner company has been filed as Annexure-1 to the writ petition. It is boldly printed on the cover page of the prospectus "1,50,000 Equity Shares reserved for firm allotment to Indian Financial Institutions. " Again on the left side bottom of the cover page it is printed--"firm allotment of Rs. 15 lacs to U. P. F. C. " The petitioners wanted to derive advantage from the fact that a Government Financial Institution like the U. P. F. C. was subscribing 1,50,000 equity shares. This was given wide publicity to allure the common pubic who could get an impression that as a Government Financial Institution was subscribing to the shares of the company, their investment in the company would be safe and profitable. In normal course, the people are reluctant to invest their money in an unknown company but by this arrangement with the U. P. F. C. , the petitioners secured a distinct advantage. Sri. A. K. Gaur learned counsel for the U. P. F. C. has submitted that today the value of the shares of the company is not even worth the paper on which it has been printed. This is not seriously challenged by the learned counsel for the petitioners. It is, therefore, obvious that the agreement was voluntarily executed by the petitioners and the same was done by them in order to get a distinct advantage. ( 8 ) THE language used in Sub-section (1) of Section 77 of the Companies Act is clear and it lays down that no company limited by guarantee and having a share capital, shall have power to buy its own shares, unless the requisite sanction is granted. This prohibition not to buy back its own shares is upon the company and not upon a third party. Sub-section (4) of Section 77 makes the company and its officers who contravene Sub-section (1) liable for punishment. This prohibition not to buy back its own shares is upon the company and not upon a third party. Sub-section (4) of Section 77 makes the company and its officers who contravene Sub-section (1) liable for punishment. There is no corresponding provision making the seller of the shares of the company to the company itself liable for punishment. Therefore, Section 77 operates only as against the company or its officers and not against a third party. To illustrate the point, if a company acts to buy back its shares from some individual A, the company Itself and its officers who act contrary to the Sub-section (1) are liable to be punished under Sub-section (4 ). There is no corresponding liability of any kind on A for selling back his shares to the company. Under the Companies Act, there is no prohibition of any kind upon a third person in entering into such a transaction where under he may sell back the shares to the company itself. Therefore, whatever contravention of law has been committed, the same has been done by the petitioner No. 1 (company) itself and not by the U. P. F. C. The petitioners plead their own unlawful act to seek quashing of the agreement dated 3. 4. 1996 and to claim refund of the amount from the U. P. F. C. That apart, it may be noticed that the agreement was unilaterally executed by the petitioners whereunder an undertaking was given by them to buy back the shares in consideration of U. P. F. C. having agreed at their request to purchase 1. 50. 000 equity shares. It is one composite agreement, which cannot be severed. If the agreement is declared as void and is cancelled, the petitioners would be bound to return the amount of Rs. 15 lakhs, which the U. P. F. C. paid to them for purchasing 1,50,000 equity shares along with appropriate interest. The petitioners cannot contend that the agreement being unlawful should be cancelled, yet they would retain the amount of Rs. 15 lakhs which they received from U. P. F. C. in terms thereof on 8. 4. 1996. Therefore, the main and effective prayer made by the petitioners, for refund of the amount which the U. P. F. C. deducted towards price of the shares sold to the petitioners at the time of disbursement of the second loan of Rs. 15 lakhs which they received from U. P. F. C. in terms thereof on 8. 4. 1996. Therefore, the main and effective prayer made by the petitioners, for refund of the amount which the U. P. F. C. deducted towards price of the shares sold to the petitioners at the time of disbursement of the second loan of Rs. 35 lakhs, cannot be accepted. ( 9 ) IN United States, ex rel. International Contracting Co. v. Daniel S. Lamont. Secretary of the department of War, 155 US 160, the company had made two bids to perform the same work in response to two separate advertisements issued by the Department and the second bid made in response to later advertisement, which was lower, was accepted. The company commenced an action for a direction to the Secretary of War to sign the contract with it for the work as covered by the first proposal and the bid made thereunder. The Court observed as under on page 164 : "the writ of mandamus cannot be issued to set aside a contract which has been voluntarily entered into. . . . . . . . . . . . . . . But even if the writ of mandamus could be so perverted as to make it serve the purposes of an ordinary suit, the relator is in no position to avail himself of such relief. He entered of his own accord into the second contract and has taken advantages which resulted from his action under it having received the compensation which was to be paid under its terms. Having done all this, he is estopped from denying the validity of the contract. . . . . . . . . . . . . " ( 10 ) CERTIORARI can be issued when any body or person having legal authority to determine questions affecting the rights of subjects and having the duty to act judicially act in excess of their authority. A writ of certiorari is a judicial writ and can be issued to subordinate Courts, inferior tribunals or other authorities for testing validity or otherwise of judicial acts. In certain circumstances, it will lie to correct errors of a statutory authority in the exercise of administrative powers. It cannot be issued to quash an agreement voluntarily executed by a party. A writ of certiorari is a judicial writ and can be issued to subordinate Courts, inferior tribunals or other authorities for testing validity or otherwise of judicial acts. In certain circumstances, it will lie to correct errors of a statutory authority in the exercise of administrative powers. It cannot be issued to quash an agreement voluntarily executed by a party. ( 11 ) SRI Ravi Kant learned senior counsel for the petitioners has strenuously urged that a writ petition to enforce the agreement entered into by a public corporation which is an instrumentality of the State is enforceable through the agency of a writ petition. In support of this proposition, he has placed reliance on several decisions including Dwarka Das Marfatia v. Board of Trustees of the Port of Bombay, AIR 1989 SC 1642 , Mahabir Auto Stores u. Indian Oil Corporation. AIR 1990 SC 1031 and Srilekha Vidyarthi v. State of U. P. . AIR 1991 SC 537 . He has also submitted that every action of the executive authority must be subject to rule of law and must be informed by reasons and where there is arbitrariness in State action. Article 14 of the Constitution would be violated and such an action is liable to be struck down in judicial review. In support of this proposition, he has placed reliance on Maneka Gandhi v. Union of India, AIR 1978 SC 597 , r. D. Shetty v. International Airport Authority of India, AIR 1979 SC 1628 and Ajay Hasia v. Khalik Mujib Sehra Vardi, AIR 1981 SC 487 . There can be not issue with the proposition enunciated by the learned counsel but we are unable to understand as to how they can come into play in the fact situation of the present case. The petitioners are not seeking enforcement of any agreement entered into by a public corporation. What the petitioners want is that an agreement, which voluntarily and willingly executed by them should not have enforced against them. This they want when the agreement has already been acted upon -by the other side and the agreement has exhausted itself in the sense that nothing more is to be done in terms thereof. No arbitrariness has been established in any dealings of the U. P. F. C. Therefore, the contention raised has no substance. This they want when the agreement has already been acted upon -by the other side and the agreement has exhausted itself in the sense that nothing more is to be done in terms thereof. No arbitrariness has been established in any dealings of the U. P. F. C. Therefore, the contention raised has no substance. ( 12 ) IN substance, what the petitioners want in this writ petition is a declaration that the agreement executed by them is void on the ground that same contravenes Section 23 of the Contract Act and is opposed to public policy. Article 226 grants power to the High Court to issue any person or authority orders or writs including writs in the nature of the habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the rights conferred by part III and for any other purpose. Article 32 confers power upon the Supreme Court to issue directions or orders or writs of the same nature for the enforcement of rights guaranteed by Part iii. In Charanjeet Lal v. Union of India, AIR 1951 SC 41 , while considering the scope of a petition under Article 32 of the Constitution, the Court observed as under in para 45 of the reports : ". . . . . . . . . . . . . . . . . . . . . . . A proceeding under this article cannot really have arty affinity to what is known as a declaratory suit. The first prayer made in the petition seeks relief in the shape of a declaration that the Act is invalid and is apparently inappropriate to an application under Article 32. " In Makhan Singh v. State of Punjab and Haryana, AIR 1964 SC 381 (Para 45), it was held that a mere declaration is outside the purview of proceedings under Article 226 of the Constitution. A full Bench of our Court in Maqbool Unissa and Ors. v. Union of India. AIR 1953 All 477 has held that the powers of issuing writs, orders or directions under Article 226 of the Constitution should not be utilised for giving what is in essence a declaratory relief. A full Bench of our Court in Maqbool Unissa and Ors. v. Union of India. AIR 1953 All 477 has held that the powers of issuing writs, orders or directions under Article 226 of the Constitution should not be utilised for giving what is in essence a declaratory relief. Similar view has been taken in two other Full Bench decisions of our Court in Sri D. G. Vidhyalaya Association v. State of U. P. , AIR 1962 All 187 and Sheo Kumar v. State of U. P. , AIR 1978 All 386 (para 31 ). Therefore, the present proceedings under Article 226 of the Constitution are wholly inappropriate for declaring the agreement dated 3. 4. 1996 as void and unenforceable. ( 13 ) CHAPTER IV of Specific Relief Act deals with rescission of contracts. Sub-section (1) of section 27 of Specific Relief Act provides that any person interested in a contract may sue to have it rescinded and such rescission may be adjudged by the Court in cases coming within the purview of Clauses (a) and (b) of the Sub-section. Specific Relief Act specifically provides the remedy for cancellation of a contract on the ground that the same is voidable or terminable by the plaintiff or when the contract is unlawful. A relief for cancellation of contract can be granted in a properly instituted suit by the civil court. In such a suit, the parties can lead evidence oral and documentary to satisfy the Court whether a case for cancellation has been made out. Normally the relief of cancellation of a contract cannot be Investigated or enquired into in a writ petition under Article 226 of the Constitution. In this view of the matter also, the relief claimed, by the petitioner In Writ Petition No. 21789 of 1999 cannot be granted and the same is liable to be dismissed. ( 14 ) WRIT Petition No. 16627 of 2001 has been filed for quashing the order dated 20. 4. 2001 (Annexure-8 to the writ petition) and for issuing a writ of mandamus restraining the respondents from initiating any recovery proceedings against the petitioners. ( 15 ) U. P. F. C. initiated recovery proceedings to recover the amount which had been advanced by way of loan to the petitioners and a recovery certificate was issued. It appears that the petitioners deposited a sum of Rs. 3 lakhs on 23. 3. ( 15 ) U. P. F. C. initiated recovery proceedings to recover the amount which had been advanced by way of loan to the petitioners and a recovery certificate was issued. It appears that the petitioners deposited a sum of Rs. 3 lakhs on 23. 3. 2001 and made a request for withdrawal of the recovery proceedings. In that connection, a letter was sent by the U. P. F. C. on 20. 4. 2001 informing them that the request for withdrawal of the recovery certificate will be considered only after the withdrawal of Writ Petition No. 21789 of 1999 (wrongly mentioned as suit in the letter) by the petitioners. This writ petition is based upon the same pleas, which have been taken in the earlier writ petition. It is not the case of the petitioners that they had repaid the entire amount of the loan taken from U. P. F. C. In these circumstances, no writ of mandamus can be issued to restrain the respondents from initiating any recovery proceedings against the petitioners. ( 16 ) FOR the reasons mentioned above, we find no merit In the writ petitions and the same are accordingly dismissed. No cost. .