Ajay Kumar Mittal, J.— In this writ petition, challenge is for quashing of the order dated 19.7.2011 (Annexure P-1) by which the Specified Authority has issued a certificate of recovery of Rs.2894.73 lacs along with interest at the rate of 18.5% per annum with quarterly rests with effect from 1.4.2012 alongwith other incidental charges under Section 32-G of the State Financial Corporation Act, 1951 (hereafter referred to as “the Act”) to be recovered as arrears of land revenue from the petitioner. Further prayer of the petitioner is to quash letter dated 4.8.2011 (Annexure P-14) issued by respondent No.1 to respondent no.3 to recover the amount as arrears of land revenue from the persons mentioned therein. 2. The facts for the decision of this case as pleaded in the petition may be noticed as under:- In the year 1975, respondent no.1-Punjab State Industrial Development Corporation Ltd. (hereinafter referred to as “the Corporation”) got a letter of intent from the Government of India for establishing a project in the State of Punjab for manufacturing of 5500 MT per annum of High Tension Porcelain Insulators. Accordingly, a financial collaboration agreement was entered into between the parties on 6.6.1977 whereby they agreed to incorporate a new company namely respondent no.4-Punjab Ceramics Limited (hereinafter referred to as “the company”) for carrying on this business. As per Clause 9 of the agreement, the public issue of shares was made by the company and the equity share of the capital was to be contributed 50:50 by each party and as per Clause 10, the share of respondent no.1 and petitioner was to be 26% and 25% respectively and the remaining 49% was to be offered to the public. The share capital of the Company was to be Rs.1 crore divided into 8 lacs equity shares of Rs.10/- each and 20,000 preference shares of Rs.100/- each. Thereafter, the company approached various financial institutions including IFCI for financial assistance. Vide letter dated 14.4.1979, IFCI informed that it is agreeable in principle to provide the loan facilities subject to special conditions besides its usual terms and conditions applicable to the grant of financial assistance. Thereafter, the company approached various financial institutions including IFCI for financial assistance. Vide letter dated 14.4.1979, IFCI informed that it is agreeable in principle to provide the loan facilities subject to special conditions besides its usual terms and conditions applicable to the grant of financial assistance. As per terms and conditions of the IFCI in its letter dated 14.4.1979, special conditions were set out and Clause 6 required the Corporation and the petitioner to give certain undertakings whereby they gave the same on 22.5.1980 and 27.5.1980 to the extent that they would make arrangement acceptable to the Corporation for meeting the shortfall if any in the resources of the borrower completing the project and/or for working capital. 3. In pursuance of the above, the said undertaking was got incorporated into the agreement dated 6.6.1977. The project could not be commissioned in time which resulted in cost overrun and shortfall of funds for implementation of the project. On 10.2.1980, the Director (Technical) wrote to respondent no.1 seeking assistance of a bridge loan of Rs.40 lacs as the project was at the stage of completion. The Corporation conceded to this request and an agreement was entered into between the Corporation and the company dated 17.2.1982. Accordingly, bridge loan of Rs.40 lacs was sanctioned and disbursed by the Corporation to the company in terms of the bridge loan agreement dated 17.2.1982 for the purpose of setting up of a ceramics insulators manufacturing unit at Dabwali Road, Bathinda, Punjab. As per the terms of the agreement, it was provided that the loan was repayable before 30th June, 1982 or earlier and that the company would utilize the proceeds of the bridging loan for acquiring, creating block assets towards the implementation of its project. In pursuance of the terms of the bridge loan agreement, deeds of guarantees dated 22.5.1980/14.4.1980 were executed by the petitioner herein and some of the promoters of the Company namely Sh. Ravinder Singh as Directors on behalf of the company. The company went into losses and in July, 1984 the Corporation sold all of its equity holding in the company to the petitioner and no demand of repayment of loan was made by the end of June, 1982 which was the date for repayment or any time later at the time of the sale of shares to the petitioner in 1984. 4. 4. The Company for meeting its costs overrun adjusted the advance of Rs.40 lacs advanced by the Corporation and an amount of ` 1,05,60,000/- by the petitioner and the Corporation for the first time requested the petitioner to repay the amount of Rs.40 lacs alongwith interest but no demand was raised upon the company. The petitioner replied to the said letter refuting the said demand and any of the liability to make the payment of the same. On 27.12.1985, the company wrote to the Corporation stating that out of total overrun of Rs.1,81,52,000/- the liability of the Corporation was 51% amounting to Rs.92,53,960/- while that of the petitioner was 49% only. The company thereafter required the Corporation that after adjustment of Rs.40 lacs, the Corporation should reimburse the balance of Rs.52,53,960/- only. The Corporation issued notice under Sections 433/434 of the Companies Act, 1956 to the company asking for the payment of Rs.40 lacs and the company replied to the notice vide communication dated 20.8.1986 that the liability of the Corporation of the cost overrun was Rs.92,53,960/- and after giving an adjustment of Rs.40 lacs the company demanded that the balance amount of Rs.52,53,960/- be reimbursed to it. The Corporation proceeded to file winding up proceedings against the company before this Court which was allowed vide order dated 6.5.1988 but the said order was set aside in Company Appeal No.8 of 1989 vide order dated 6.5.1989 by this Court wherein various observations were made including that the petition for winding up of the company had been filed to pressurize for enforcing payments. 5. The Corporation also wrote to the company for settlement of its dues under OTS on 23.11.1995. Thereafter the Corporation filed an application dated 29.9.2010 under Section 32-G of the Act for issuance of a recovery certificate against the respondents and in the said application no reference was made to the winding up proceedings and the observations made by this Court in the Company Appeal. The said application was contested by the present petitioner in its reply dated 16.4.2011 in which various pleas were taken regarding limitation and the litigation under the Companies Act, 1956 and the observations made by this Court in Company Appeal No.8 of 1989 decided on 2.6.1989. The said application was contested by the present petitioner in its reply dated 16.4.2011 in which various pleas were taken regarding limitation and the litigation under the Companies Act, 1956 and the observations made by this Court in Company Appeal No.8 of 1989 decided on 2.6.1989. Accordingly, on the basis of the said application, the impugned order has been passed on 19.7.2011 whereby the recovery certificate has been issued and a further request has been made to respondent no.3 to direct initiation of recovery proceedings against the petitioner and recover the dues as arrears of land revenue. Hence the present petition. 6. We have heard learned counsel for the parties and perused the record. The respondent no.2 has chosen not to file written statement inspite of repeated adjournments. 7. Counsel for the petitioner contended that the application under Section 32-G of the Act filed by the Corporation was for the recovery of ` 40 lacs advanced by the Corporation as bridge loan to the company for setting up the project of High Tension Porcelain Insulators. The bridge loan was dated 17.2.1982 whereas the deeds of guarantee relied upon in the application were of earlier period dated 14.4.1980 and 22.5.1980 which pertained to the loan of Rs.45 lacs which was taken from IFCI. It was, thus, urged that the guarantee deeds relied upon did not pertain to the bridge loan in question which the company had taken and, therefore, the said amount could not be recovered. It was next submitted that in view of the notification dated 22.11.2002 the Specified Authority was under an obligation to give reasons where cause was shown and before rejecting the objections of the petitioner. Accordingly, it was argued that the order passed was a non-speaking order and, therefore, liable to be quashed on this ground. The Corporation inspite of availing opportunities did not file any reply to controvert the averments made in the petition. 8. There is considerable weight in the submission of learned counsel for the petitioner. A perusal of the reply filed under Section 32-G of the Act by the company would show that it took up various pleas regarding the repayment that the Corporation sold all its equity holding and no demand/payment of loan had been made by June, 1982. 8. There is considerable weight in the submission of learned counsel for the petitioner. A perusal of the reply filed under Section 32-G of the Act by the company would show that it took up various pleas regarding the repayment that the Corporation sold all its equity holding and no demand/payment of loan had been made by June, 1982. The company had infact written that the Corporation was liable to reimburse the balance amount of Rs.52,53,960/- and this was reflected in the balance sheet of the company. The Corporation had then filed winding up petition which was allowed but the winding up order was set aside by the Appellate Court in M/s Punjab Ceremics Limited Vs. Punjab State Industrial Development Corporation Ltd., Chandigarh 1990(1) PLR 526 with the following observations:- “13. We have given our careful consideration to the rival contentions of learned counsel for both the sides and also the judgment of the learned company judge. We find that the learned company judge has not taken into consideration the provisions of clause 13 of the agreement between PSIDC and CCL dated June 6, 1977, by virtue of which the undertakings given by PSIDC and CCL to the Industrial Finance Corporation of India on May 22, 1980, and May 27, 1980, respectively, became an integral part of that agreement The learned company judge has further also lost sight of the letters of PSIDC to CCL dated November 13/14, 1985, and the letter of CCL to PSIDG dated November 30, 1985, and the letter from PCL to PSIDC dated November 27, 1985. He has also not referred to the case set up by the CCL in reply to the legal notice. The balance-sheet for the year 1984 signed by the directors on March 23, 1985, reflects a short-term loan of Rs. 40 lakhs from PSIDC and a similar loan of Rs. 1,05,60,000 from CCL. But, on November 13/14, 1985, PSIDC demanded the payment of Rs. 40 lakhs with interest from CCL and not from PCL which was refuted by CCL. By its letter dated December 27, 1985, PCL candidly claimed reimbursement of Rs. 52,53,960 being the balance of the share of the overrun of PSIDC amounting to Rs. 92,53,960 after adjusting the bridge loan of Rs. 40 lakhs. 40 lakhs with interest from CCL and not from PCL which was refuted by CCL. By its letter dated December 27, 1985, PCL candidly claimed reimbursement of Rs. 52,53,960 being the balance of the share of the overrun of PSIDC amounting to Rs. 92,53,960 after adjusting the bridge loan of Rs. 40 lakhs. Instead of settling the matter with PCL, after a lapse of about nine months, PSIDC served a notice purporting to be under Section 434 of the Companies Act through its counsel, Shri Vinod Sharma, advocate, which was controverted by the PCL, through the letter of its counsel, Shri J. C. Malhotra, dated August 20, 1986, reiterating its claim of adjustment of Rs. 40 lakhs and reimbursement of Rs. 52,53,960 from PSIDC. This position was reflected in the balance-sheet of the PCL for the year 1986, signed on April 7, 1987. These vital facts do not appear to have been taken into account by the learned company judge in holding that till March 23, 1986, the company did not dispute its liability to repay the loan. Though the amount was adjusted in the balance-sheet for the year 1986, after receipt of the statutory notice, the case was set up by PCL as early as December, 1985. In any case, these are triable issues which the company court, in its summary jurisdiction, is not competent to try. All that it has to see is whether the company sought to be wound up has set up a bona fide case of substance which is likely to succeed in point of law by adducing prima facie proof of the facts on which its defence depends. The observations of the learned company judge that there is no agreement between PSIDC and CCL that, in the event the overall cost of the project rising, the PSIDC will meet-the overall cost to the extent of its 51 per cent, share, and in the absence of such agreement, PSIDC is not liable to share the overrun cost are not warranted in the face of clause 13 of the agreement dated June 6, 1977, and the undertaking given by the promoters of the company to the Industrial Finance Corporation of India. In any case, even this dispute involves triable issues to be determined by a civil court on relevant evidence being adduced. In any case, even this dispute involves triable issues to be determined by a civil court on relevant evidence being adduced. For resisting the winding up petition under Section 433, in our opinion, the company has clearly set up a bona fide case by producing prima facie evidence of its defence. In the circumstances, we hold that the company judge was in error in perfunctorily ordering the winding up of the company. In our opinion, the act of the PSIDC in presenting the winding up petition smacks of mala fides as, in the face of the serious contest by the PCL, instead of filing a suit in a civil court, the petition for winding up the company has been filed to pressurize for enforcing payment. We, therefore, hold that there is no valid case for winding up the company and set aside the impugned judgment and allow the appeal with no order as to costs”. 9. Once the Division Bench of this Court had held that there were triable issues and the company Court was not competent to try the same in its summary jurisdiction as there was a bonafide case of substance which was likely to succeed on point of law, then the petition under Section 32-G of the Act under summary procedure was not justified. Even otherwise from the perusal of the guarantee deeds, it is revealed that guarantee given by the present petitioner dated 14.4.1980 and 22.5.1980 pertained to the bridge loan of Rs.45 lacs by the IFCI and not to the bridge loan advanced by the Corporation. These were prior in time to the bridge loan which was sanctioned, by which Rs.40 lacs were advanced by the Corporation to the company on 17.2.1982. Thus, the Corporation is not justified in filing the application under Section 32-G of the Act and it appears that no written statement has been filed in the absence of any valid defence. 10. The next submission of the counsel for the petitioner also carries substance and is liable to be accepted. Thus, the Corporation is not justified in filing the application under Section 32-G of the Act and it appears that no written statement has been filed in the absence of any valid defence. 10. The next submission of the counsel for the petitioner also carries substance and is liable to be accepted. The impugned recovery certificate passed by the Specified Authority reads as under:- “Whereas an application was moved by the Punjab State Industrial Development Corporation Ltd. Under Section 32(G) of the State Financial Corporations Act, 1951 for the recovery of Rs.2894.73 lacs along with interest @ 18% per annum with quarterly rests w.e.f. 1.4.2010 along with other incidental charges that may be incurred by the claimant till actual date of realization in terms of deed of guarantee from the respondents mentioned below in the last paragraph, who are the guarantors of M/s Punjab Ceramics Ltd. and for issuance of recovery certificate for the aforesaid amount. And whereas the matter was heard by the undersigned and the undersigned is satisfied that a sum of Rs.2894.73 lacs along with interest @ 18% per annum with quarterly rests w.e.f. 1.4.2010 along with other incidental charges that may be incurred by the claimant till actual date of realization, is due and payable to the applicant i.e. Punjab State Industrial Development Corporation Ltd. from the respondents named hereinunder who are jointly and severally liable to pay. Now, therefore, in exercise of the powers conferred on me U/S 32(G) of the SFCs Act, 1951, the undersigned hereby issues a Certificate of Recovery for a sum of Rs.2894.73 lacs (Rupees twenty eight crore ninety four lacs and seventy three thousand only) along with interest @ 18% per annum with quarterly rests w.e.f. 1.4.2010 along with other incidental charges that may be incurred by the claimant till actual date of realization, as per the terms and conditions of the agreement and Deed of Guarantees. You are required to recover the said amount as stated above from the persons all or any one named hereunder as arrears of land revenue at the earliest. You are further required to deposit the amount so recovered in pursuance of this recovery certificate directly with the Punjab State Industrial Development Corporation Ltd., Udyog Bhawan, 18, Himalaya Marg, Sector 17, Chandigarh-160017. You are further required to deposit the amount so recovered in pursuance of this recovery certificate directly with the Punjab State Industrial Development Corporation Ltd., Udyog Bhawan, 18, Himalaya Marg, Sector 17, Chandigarh-160017. The names and addresses of persons from whom the recovery is to be affected as arrears of land revenue are as under :” 11. From a perusal of the impugned order, it would be clear that the same is totally non speaking and totally bereft of any reason. Admittedly, the State Government has notified the procedure on 22.11.2002 which is to be followed. The notification reads as under:- NOTIFICATION “In exercise of powers conferred under Section 32(G) of the State Financial Corporation Act, 1951 (as amended) the Governor of Punjab is pleased to appoint the Managing Director, Punjab State Industrial Development Corporation (PSIDC) as 'Specified Authority' under Section 32(G) of the State Financial Corporation Act, 1951 with immediate effect for issuing recovery certificate to the Collector for recovery of dues as arrears of land revenue, after complying with the following procedure:- i) On receipt of application for issue of recovery certificate 'Specified Authority' shall issue to the respondents a notice calling upon them to show cause on a date to be specified in the notice why the recovery certificate may not be issued. ii) If no cause is shown on or before the date specified in the notice, the 'Specified Authority' after examining the applications and statement of accounts attached with the application in support of claim of the PSIDC may make further enquiries as to the amount due to the PSIDC. In order to settle the claim of the PSIDC the 'Specified Authority' may summon any record of the financial institution or examine any of its employees. iii) If after processing applications made to the 'Specified Authority' and upon satisfaction of the 'Specified Authority' regarding amount due to the PSIDC from the defaulting industrial concern the Specified Authority shall then issue a certificate to the 'Collector' for recovery of ones as arrears of land revenue. iii) If after processing applications made to the 'Specified Authority' and upon satisfaction of the 'Specified Authority' regarding amount due to the PSIDC from the defaulting industrial concern the Specified Authority shall then issue a certificate to the 'Collector' for recovery of ones as arrears of land revenue. iv) If case is shown, the 'Specified Authority' shall proceed to investigate the claim of the Punjab State Industrial Development Corporation Ltd., taking into consideration the objections, if any, raised by the respondents and after making investigation, the 'Specified Authority' either may accept the application of Punjab State Industrial Development Corporation Ltd. for issue of recovery certificate or may reject the claim of the Punjab State Industrial Development Corporation Ltd. MUKUL JOSHI Dated Chandigarh the Principal Secretary to Govt. Punjab 22.11.2002 Department of Industries and Commerce.” 12. A reading of the notification would show that the recovery certificate is to be issued after complying with the procedure prescribed thereunder. Under Clause (i) of the aforesaid notification, a notice is required to be issued upon the borrower/guarantor to show cause why the recovery certificate may not be issued and if a cause is shown before the date specified in the notice, the authority has to examine the application and the statement of accounts and may summon any record of the financial institution or examine any of its employees. If, after processing the application under Clause (iv), if a cause is shown, the Specified Authority may proceed to investigate the claim of PSIDC after taking into consideration the objections raised for issue of recovery certificate or may reject the claim. 13. Admittedly, the procedure has not been followed on the face of the record and authority has proceeded to issue recovery certificate. The said recovery certificate gives no reason and neither deals with the objections raised by the petitioner company regarding the claim being time barred or observations of this Court in Company Appeal No.8 of 1989 M/s Punjab Ceremics Limited (supra) which had been raised by the petitioner in its reply. The Hon'ble Apex Court in Harbhajan Singh Dhalla Vs. Union of India, AIR 1987 SC 9 has held that while the observance of the principle of natural justice are required but there should be reasons which should support the decision even if it is an administrative order. The relevant paragraph reads as under:- 26. The Hon'ble Apex Court in Harbhajan Singh Dhalla Vs. Union of India, AIR 1987 SC 9 has held that while the observance of the principle of natural justice are required but there should be reasons which should support the decision even if it is an administrative order. The relevant paragraph reads as under:- 26. In this case, there is no provision of any appeal from the order of the Central Government in either granting or refusing to grant sanction under section 86 of the Code. This sanction or lack of sanction may, however, be questioned in the appropriate proceedings in court but inasmuch as there is no provision of appeal, it is necessary that there should he on objective evaluation and examination by the appropriate authority of relevant and material factors in exercising its jurisdiction under section 86 by the Central Government. There is an implicit requirement of observance of the Principles of natural justice and-also the implicit requirement that decision must be expressed in such a manner that reasons can be spelled out from such decision. Though this is an administrative order, in a case of this nature, there should be reasons. If the administrative authorities are enjoined to decide the rights of the par- ties, it is essential that such administrative authority should accord fair and proper bearing to the person to be affected by the order and give sufficiently clear and explicit reasons. Such reasons must be on relevant material factors objectively considered. There is no claim of any privilege that disclosure of reasons would undermine the political or national interest of the country.” 14. Similar view has been taken in Union of India and others Vs. Jai Prakash Singh and another AIR 2007 SC 1363 . Relevant paras read as under:- “7. Reasons introduce clarity in an order. On plainest consideration of justice, the High Court ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, all the more when its order is amenable to further avenue of challenge. The absence of reasons has rendered the High Court's judgment not sustainable. 8. Even in respect of administrative orders Lord Denning M.R. in Breen v. Amalgamated Engineering Union 1971 (1) All E.R. 1148 observed "The giving of reasons is one of the fundamentals of good administration". The absence of reasons has rendered the High Court's judgment not sustainable. 8. Even in respect of administrative orders Lord Denning M.R. in Breen v. Amalgamated Engineering Union 1971 (1) All E.R. 1148 observed "The giving of reasons is one of the fundamentals of good administration". In Alexander Machinery (Dudley) Ltd. v. Crabtree 1974 LCR 120 it was observed: "Failure to give reasons amounts to denial of justice". Reasons are live links between the mind of the decision taker to the controversy in question and the decision or conclusion arrived at". Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the "inscrutable face of the sphinx", it can, by its silence, render it virtually impossible for the Courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before Court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a. speaking out. The "inscrutable face of a sphinx" is ordinarily incongruous with a judicial or quasi-judicial performance. 15. Admittedly, the authority under Section 32-G of the Act has not taken into consideration the reply of the petitioner regarding the issue of limitation and that the dispute had already become stale. The Specified Authority has the power to accept or reject the application of the Corporation and may summon the record of the financial institution and see that the plea set up by the petitioner was proper and valid, and this exercise having not been carried out the present petition deserves to be allowed. 16. In view of the reasons given by the Division Bench in the Company Appeal M/s Punjab Ceremics Limited (supra) that there were triable issues and on account of the fact that the Specified Authority has failed to take into consideration the objections raised in the reply given, the order dated 19.7.2011 (Annexure P-1) and the subsequent order dated 4.8.2011 (Annexure P-14) issued by respondent no.1 for recovery of the amount from the petitioner is quashed. The writ petition stands disposed of accordingly. 17. The writ petition stands disposed of accordingly. 17. The original file may be returned to the counsel for respondents No.1 and 2.