RAM PAL Vs. STATE OF HARYANA

JUDGEMENT

(1.) THE petitioner had taken an advance of Rs. 1,80,000/ - from the government as a loan for purchase of a new car from an authorized dealer. As per the agreement, interest payable was at the rate of 9.5% per annum. However, it was later found that the petitioner had purchased a second hand Maruti Zen Car Model 2000 from one Mr. N.D. Sharma of Faridabad, Haryana. From this, it is taken that the petitioner has mis -utilized the loan. Relying upon the condition in the agreement advancing the loan, the amount has been recovered from the petitioner with penal interest of 10% per annum over and above the normal rate of interest @ 9.5 percent. Learned counsel for the petitioner submits that the price of the new car at the time of sanction of loan advance was much higher than the amount sanctioned by the department and due to shortage of funds the petitioner decided to purchase a second hand car to meet his immediate requirement and to cut his coat according to the cloth. He further submits that registration certificate in the name of the petitioner was submitted in the office of respondent No. 2 who never raised any objection with regard to the purchase of a used hand car instead of a brand new one. Learned counsel further submits that the purchase of old car instead of new car does not amount to misutilization of funds to give it the colour of a misdeed.

(2.) ON the other hand, Ms. Kirti Singh, learned Deputy Advocate General, Haryana submits that the executive instructions dated 23.08.1993 issued by the Finance Department, Haryana clearly provides that when the amount has been utilized by a Government employee other than the purpose for which it is granted, the penal interest @ 10% (ten per cent) per annum over and above the normal rate of interest shall be charged from the date of drawl of the advance. She further submits that in the letter of sanction it was clearly stipulated that in case of misutilization of loan, penal interest @ 10% per annum will be charged over and above the normal rate of interest, thus, the action of the State is legal and justified.