State Of Bihar v. Akhil Bhartiya Jan Kalyan Sangh — 1999 DIGILAW 1033 (PAT)

Judgment Nagendra Rai, J. 1. This appeal is directed against the judgement dated 26.3.92 passed by the learned single judge of this court in C.W.J.C. No. 5670/87 by which he has directed the appellant no. 2 the Bihar State Scheduled Caste Co-operative Development Corporation Ltd. (hereinafter referred to as the Corporation) to release/pay the remaining sanctioned amount of ban to the respondent no. 1 Akhil Bhartiya Jan Kalyan Sarigh (hereinafter referred to as the Sangh or Association). 2. The respondent no. 1 (Sangh) through its General Secretary respondent no. 2 Govind Das Shastri filed a writ application with a prayer to direct the appellant no. 2 (the Corporation) to release/pay the remaining sanctioned amount of loan of Rs. 2,38,000/- for which it has already furnished the security/bonds. 3. The facts which are not in dispute are; that the Government of Bihar established the Corporation with the finacial aid in ; grant/subsidy/loan granted by the Government of India as well as the State Government, besides other agencies with a vjiew to provide financial assistance in grant/subsidy/loan to the persons or socjieties belonging to the Scheduled Caste for their upliftment Respondent no.1 (the Sangh) is the Association reg stered under the Indian Societies Act and respondent no. 2, who belong to the scheduled caste, is its Genera! Secretary. The Association is also registered member of the Corporation. The Sangh through its General Secretary made a prayer before the Corporation to run a Scheduled Caste/Scheduled Tribe Women Centre in Bhagalpur. In the year, 1983 the Managing Director of the Corporation granted permission in anticipation of approval of the Board of Directors to start Women Stitching and Cutting Centre at Bhigalpur and funds were made available to the Association through the appellant-Corporation. In the meantime, complaints were received that the amount released in favour of the Sangh is being misappropriated by its General Secretary (respondent no. 2). Thereafter, an enquiry was made by the Corporation and it was found that the amount is being misappropriated by showing employment of fake persons. It was also found that the Centre was not running properly. On receipt of the enquiry report the Corporation directed the Association to close the aforesaid Centre and return back the articles but inspite of that direction the respondent no. 2 did not return the articles and thereafter a direction was issued to lodge a F.I.R. against him. A title suit no. On receipt of the enquiry report the Corporation directed the Association to close the aforesaid Centre and return back the articles but inspite of that direction the respondent no. 2 did not return the articles and thereafter a direction was issued to lodge a F.I.R. against him. A title suit no. 145/90 was also filed against the respondent no. 2 with regard to the recovery of the money etc. 4. In the year, 1986 trie Association, as per the scheme of the Government of India, submitted a detailed project/scheme including development scheme for development of 100 acres of land to be made fit for agricuiture purpose and for construction of houses for rehabilitation of scheduled castes who have no house to five in. The estimated costs of both the projects were Rs.12,00,000/- The matter was considered by the Corporation in its meeting datec 13,11.86 in which the General Secretary (respondent no. 2) also participated! and the projects/schemes of the respondent Association was accepted and a loan of Rs.2.50 lacs was sanctioned. Thereafter, the Association submitted all the necessary documents including the bonds executed by them and then Rs. 12000/- was released in favour of the Association and the remaining amount was not released inspite of the several requests made by the Associatipn for release of the remaining amount of the sanctioned loan and hence the Association through its General Secretary (respondent no. 2) filed the writ application. 5. The stand of the Corporation is that the respondents are not entitled to get more amount of sanctioned loan as the earlier amount released to the Association for running the training centre on enquiry has been found to be misappropriated by it and its General Secretary for which action has already bein taken. As such it was not in the public interest to release the remaining amount of loan as there was every likelihood of misappropriation of the aforesaid amount by the Association and its General Secretary. 6. The learned single judgej of this Court after having heard the matter allowed the writ application primarily on the ground that there was no allegation with regard to the misappropriation of Rs.12000/- which was advanced out of the total amount of Rs. 2.50 lacs and allegation of misappropriation is only with regard to the earlier amount that was advanced to the Association for running its training centre. 7. 2.50 lacs and allegation of misappropriation is only with regard to the earlier amount that was advanced to the Association for running its training centre. 7. The counsel for the appellants submitted that the Corporation after having come to know about the misappropriation of the earlier amount given to the Association has decided not to release the remaining amount of loan as there is every likelihood that the amount will be misappropriated and there is no chance of recovery of loan. This decision has been taken in the interest of the Corporation and the Association has no right to claim of amount of loan. It was submitted on behalf of the appellants that the learned single judge has erred in directing for release of the fund ignoring the fact that the Corporation took the aforesaid decision fairly and honestly in the public interest as the release of the aforesaid amount will result in misappropriation and misutilisation of the money by the respondent Sangh which in the past had misappropriated similar fund released to it. 8. The counsel for the respondents on the other hand submitted that the Corporation has acted arbitrarily in not releasing the remaining amount of loan. The teamed single judge has rightly directed for release of the aforesaid amount. 9. After hearing the parties and going through the records we are of the view that no direction as has been given by the learned single judge can be given in the facts of this case for the reasons stated hereinafter. 10. The equitable remedy under Article 226 of the Constitution of India is to advance the cause of justice. No relief under this Article can be granted in this resulting in miscarriage of justice. This court under Article 226 of the Constitution has no untrammelled power to pass any order it pleases. The order should be consistent with the well settled principles governing the grant of relief under Article 226 of the Constitution of India. 11. The question in this case is as to whether the amount of loan granted to the Association has to be released or not. 12. The order should be consistent with the well settled principles governing the grant of relief under Article 226 of the Constitution of India. 11. The question in this case is as to whether the amount of loan granted to the Association has to be released or not. 12. There was no vested right in the Association to claim amount of loan as a matter of right nor is there any statutory obligation on the part of the Corporation to grant loan whoever demands it without being satisfied that the purpose for which the loan is advanced is to be served or not and further as to whether there is chance of recovery of loan or not. 13. The Corporation has been established to advance the subsidy/loan for the upliftment of the members of the scheduled caste. Amount was given to the respondent Association earlier for running a training centre and later on it was found that the amount was misappropriated by the Association and its General Secretary and the steps have been taken to recover the same as well as steps have also been taken to institute a case against the Association and its General Secretary. After having come to know this fact if the Corporation decides not to release the remaining amount of loan the said action cannot be said to be arbitrary in law. If the Corporation go on advancing the loan even after coming to know that there is chance of misappropriation of money then that will not serve the purpose of the Corporation for which it has been established and on the other hand which will encourage the unscrupulous persons to get loan and misappropriate it. The Corporation has acted fairly and honestly in the sense that when it found that the Association was not serving the purpose for which it has been established it decided not to release the remaining amount of loan in the public interest and the said decision, in our view, does not require interference by this court in exercise of power under Article 226 of the Constitution of India. 14. Accordingly, the appeal is allowed and the order passed by the learned single judge is set aside. There shall be no order as to costs. M.L.Visa, J. 15 I agree.