THE HON’BLE SRI JUSTICE L.NARASIMHA REDDY WRIT PETITION No.19411 2007 ORDER: The petitioner is a Cooperative Urban Bank at Visakhapatnam. The employees of Anakapally Municipality, respondent No.1 herein, have become members of the petitioner- Bank. They obtained loan of different kinds and there was an arrangement with respondent No.1 that the instalments for the loans shall be deducted from the salaries and respondent No.1 shall remit the same to the petitioner. The petitioner contends that though respondent No.1 remitted the amount deducted from the salaries of the employees for some time, it has stopped thereafter. According to the petitioner, a large sum of Rs.91,26,518/- was deducted from the salaries of the employees, who are members of the petitioner but, it has not been remitted to it so far. The petitioner seeks a direction against respondent No.1 for remittance of the amount. Respondent No.1 filed a counter-affidavit. The fact that there existed an arrangement for deduction of instalments from the salaries of the employees who have obtained loan from the petitioner is not disputed. The reply of respondent No.1 as to the exact amount due is uncertain and vague. Heard the learned counsel for the petitioner and the learned Standing Counsel for respondent No.1. The employees of respondent No.1 joined as members of the petitioner-Bank and obtained loans. It appears that tripartite agreements were made with the participation of the petitioner, respondent No.1 and the loanee concerned arranging for deduction of instalments from the salary and remittance of the same to the petitioner. This went on for some time. But, respondent No.1 stopped remittance. It is not uncommon that the employers deduct various amounts towards instalments, be it towards the premium of Life Insurance Corporation, repayment of housing loan, instalments to be paid to Banks or other recognised agencies. Once the amount is deducted, the employer is under obligation to pass on the same to the agency to which the employee is due. Failure to remit the amount amounts to misappropriation. In case the employer finds any difficulty in effecting deductions, it has to desist from deducting the amount and informing the same to the agency, so that the lending agency and the borrower would settle their affairs. The conduct of respondent No.1 in retaining the amount that too in huge sums after deducting the same from the employees is totally reprehensible. In fact, the audit objection ought to have been raised by the agency concerned. Hence, the writ petition is allowed and respondent No.1 is directed to remit with the petitioner the entire amount deducted by it from the salaries of the employees towards repayment of instalments, within a period of three months from the date of receipt of a copy of this order. Failure in this regard would not only exposed the Commissioner and the Accountant of the Municipality for disciplinary action, but also for award of interest on the amount due. There shall be no order as to costs. _____________________ L.NARASIMHA REDDY,J Dt:24.02.2011 kdl