ASHOK MATHRANI Vs. BASTAR KSHETRIYA GRAMIN BANK

JUDGEMENT

(1.) CHALLENGE in this petition is to the order dated 30th June, 1999 (Annexure P/9) whereby the Petitioner was reprimanded. It was further directed that the loan advanced to the Petitioner for residential purpose was used for commercial purpose and as such, the loan amount be recovered with interest at the rate of 17%. The Petitioner further challenges the order dated 18th March, 2002 (Annexure P/12), whereby a direction was issued to recover the loan amount advanced to the Petitioner for residential purpose which was used for commercial purpose at the rate of 17%, and the order dated 23rd March, 2002 (Annexure P/11) whereby after calculation, the equated monthly installments (E.M.I.) of Rs. 7,572/- of 108 installments was directed to be recovered from the salary of the Petitioner.

(2.) THE indisputable facts, in brief, are that the Petitioner, being an employee of the Respondent/Bank, under the housing scheme, made an application on 18th July, 1996 (Annexure R/l) for grant of loan to purchase a house constructed over a plot of land bearing plot No. 91/1, street No. 78 at Pratapganjpara, Main Road, Jagdalpur. A loan amount of Rs. 2 lacs was sanctioned and vide letters dated 20th March, 1996 and 29th March, 1996, the loan amount was disbursed to the Petitioner by the Respondent bank. After purchase of the said house, the sale deed was executed and registered, and thereafter, the same was deposited with the Respondent bank for creation of charge in favour of the bank. THE loan amount was recoverable under an agreement. THE first Rs. 1 lac would carry interest at the rate of 5% p.a. and the second Rs, 1 lac would carry interest at the rate of 11% p.a.. THE said amount of loan with interest was to be paid in 180 equal installments of Rs. 1110/- per month, deductible from the salary of the Petitioner. THE Petitioner reconstructed the old purchased house without prior intimation to the Respondent-bank and after obtaining required sanction from the local authorities. After two years, the Petitioner received a notice dated 14th July, 1998 (Annexure P/2), calling upon the Petitioner to submit required documents indicating sanction of the competent officers for converting the residential building to the commercial shop and expenditure made thereon. THE Petitioner submitted his reply to the Chairman, Bastar Kshetriya Gramin Bank on 31st July, 1998 (Annexure P/3) stating that the Petitioner was constrained to reconstruct the house without obtaining necessary permission, with a request that if a permission was required, the same may be sanctioned to the Petitioner. On 7th September, 1999 (Annexure P/4), the Respondent-bank issued a show-cause-notice stating that the Petitioner has deliberately converted the use of the residential house to commercial shop and as such, why departmental action should not be taken against the Petitioner under the provisions of Section 17 and 18 of the rules and regulations of the bank. THE Petitioner again submitted reply stating that whatever has happened, it was on account of ignorance of law and the rules, thus, proceedings against the Petitioner may be dropped. A charge-sheet dated 27th March, 1999 (Annexure P/6) was issued under the provisions of Regulations 17 and 19 of the Bastar Kshetriya Grameen Bank (Staff) Service Regulations, 1980 (for short 'the Regulations, 1980'). Consequent thereupon, the impugned order dated 30th June, 1999 was passed. An appeal was preferred before the Chairman i.e. the Respondent No. 2, under the provisions of regulation 31 and 32 of the Regulations, 1980. According to the learned Counsel for the Petitioner, without affording an opportunity of hearing, the appeal was dismissed confirming the order dated 30th June, 1999. THEreafter, no action was taken for about two years. After a lapse of about 2 years, the Petitioner was served a letter dated 23rd March. 2002, whereby the Petitioner was directed to pay monthly installments of Rs. 7,572/-. Thus, this petition.

(3.) PER contra, on the other hand, Shri Prafull N. Bharat, learned Counsel appearing for the Respondent-Bank would submit that the Petitioner being the employee of the Respondent, obtained a loan under the PERsonal Housing Loan Scheme for the Employees of the Bank, 1993 (for short 'the Scheme, 1993') for the employees (Annexure R/2). Under the Scheme, the Petitioner was granted loan with rebate in interest which was less than the then prevalent rate of interest of the bank and the Petitioner gave his undertaking that he would utilize the loan for residential purpose only. Inspite of the undertaking, the Petitioner changed the use of loan amount and used the same for construction of shop. Thus, the Petitioner played fraud with the answering Respondent. Accordingly, after issuing show-cause-notice, a charge-sheet was issued. In reply, the Petitioner admitted the charges and the change of purpose for which loan was granted (Annexure R/3). As the Petitioner violated the terms and conditions of the agreement under the Scheme, 1993, the penal provision was invoked. The penal provision provides for charge of penal interest over and above 1 1/2% as charged by the State Bank of India. Penal provision further provides that in addition to enhancement of interest, the employee also has to face the departmental proceedings. This is in accordance with the penal provision of the Scheme, 1993 and accordingly the interest at the rate of 17% per annum was charged. The Petitioner in his application (Annexure R/l) had opted for purchase of the house only and it was not disclosed that the same was to be used for composite purposes i.e. for commercial business also. Since the Petitioner has admitted the fact that he has changed the purpose for use of the loan amount, thus, it was not thought necessary to hold any enquiry. In support of his contention, Shri Bharat relies on a decision of Supreme Court in Chairman and Managing Director V.S.P. and Anr. v. Goparaju Sri Prabhakara Hari Babu : (2008) 5 SCC 569. Shri Bharat would further submit that a punishment of reprimand was inflicted upon the Petitioner and the same was a minor punishment, therefore, no full-fledged enquiry was necessary. Section 73 of the Indian Contract Act, 1872 (for short 'the Act, 1872') makes it clear that when a contract has been broken the party who suffers by such breach is entitled to receive, from the party who has broken the contract, the compensation for loss or damage. Section 74 of the Act, 1872 also provides for the same.