IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD MONDAY, THE NINETEENTH DAY OF JANUARY TWO THOUSAND AND NINE PRESENT HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION NO : 13585 of 1999 Between: M.A. Nayeem Baig, S/o M.A. Raheem Baig, R/o Nizamabad. ..... PETITIONER AND 1 A.P. State Road Transport Corporation, Rep. by its Managing Director, Mushirabad Hyderabad. 2 A.P. State Road Transport Corporation, Rep. by its Dy. Chief Personnel Manager, Karimnagar Zone, Karimnagar. 3 A.P. State Road Transport Corporation, Rep. by its Depot Manager, Nizamabad Depot. Nizamabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to may be pleased to call for the records from the 2nd & 3rd respondents and issue an appropriate writ of Mandamus, declaring athat the order passed by the 2nd respondent in proceedings No. P4/9(53)/90-ED-KR, dated 13-11-98, imposing the penalty of recovery of Rs.2,664/- per month and also the order passed by the 3rd respondent in proceedings No. E1/8(4)/98-NZB, dt. 6-5-1999 keeping me under suspension as illegal, unjust, contrary to law, in violation of principles of natural justice, Victimisation unfair labour practice and amounts to inflicting double punishment and grant all consequential benefits and pass such further or other orders as deem fit and proper in the circumstances of the case. Counsel for the Petitioner : MR.A.K.JAYAPRAKASH RAO Counsel for the Respondents : SMT.B.G.UMA DEVI The Court made the following : ORDER : The petitioner, who is working as an Electrician in the Andhra Pradesh State Road Transport Corporation, has filed this writ petition, challenging the order dated 13.11.1998, passed in Proceedings No.P4/9(53)/90-ED-KR by the Deputy Chief Personnel Manager, Karimnagar Zone, and the subsequent order of suspension dated 06.05.1999, passed in Proceedings No.E1/8(4)/98-NZB. 2. The petitioner was initially appointed as a Cleaner in the respondent-Corporation, and during the year 1999, while he was working as an Electrician at Nizamabad Depot, he was sanctioned a house building advance of Rs.1,00,000/- on 12th August 1991. Out of the said sanctioned amount, Rs.33,300/- was released as a first instalment on 13.09.1991 and a further sum of Rs.33,300/- was released on 13.07.1992 as 2nd instalment. When the third instalment amount was to be released, on the ground that the petitioner has not utilized the 2nd instalment amount properly, an order dated 13.11.1998 in Proceedings No.P4/9(53)/90-ED-KR, was passed by the Deputy Chief Personnel Manager, Karimnagar Zone, ordering to recover the released amount of Rs.66,600/- from the petitioner, by imposing penal interest at the rate of 24% per annum. As per the original schedule, repayment was to be made at the rate of Rs.1,000/- per month, but pursuant to the impugned order, by imposing the penal interest, recovery of Rs.2,664/- per month was ordered with effect from November 1998. In the affidavit filed in support of the writ petition, it is stated that with the released amount of 1st instalment, the petitioner has constructed the house upto basement level and he has also procured the material after the release of 2nd instalment amount on 13.07.1992. It is the case of the petitioner that at that stage, he was transferred from Nizamabad to Banswada, and thereafter, as his daughter was affected with Tuberculosis, he could not take up the construction work immediately. The impugned orders are questioned mainly on the ground that the said orders are passed in arbitrary exercise of power and in violation of the principles of natural justice, without giving any opportunity of hearing to the petitioner. 3. On filing of the writ petition, at the stage of admission, this Court, by an order dated 09.07.1999, granted interim orders staying the proceedings of recovery as well as the suspension orders passed against the petitioner. The vacate petition filed by the respondent-Corporation was also dismissed on 13.03.2000. 4. In the counter affidavit filed on behalf of the respondents, it is stated that the petitioner has only spent Rs.34,422/- towards construction of house upto basement level, but however, he has not utilized the 2nd instalment amount which was released on 13.07.1992. It is the case of the respondents that as the petitioner has failed to utilize the 2nd instalment amount as per the agreed terms, the impugned recovery is ordered which is as per the Circular instructions governing the grant of house building advance. In the additional affidavit filed on behalf of the respondents, it is stated that after the release of loan amount, an amount at the rate of Rs.1,000/- per month was recovered from October 1996 to October 1998, totalling Rs.25,000/- and further, a sum of Rs.2,664/- per month was recovered for the months from November 1998 to April 1999, totalling to Rs.15,984/-. In addition to the same, a further amount of Rs.16,000/- was recovered, and thus, a total amount of Rs.56,984/- is recovered from the petitioner so far. 5. Heard learned counsel for the petitioner as well as the learned Standing Counsel for the respondent- Corporation. 6. Even from the averments of the counter affidavit and the additional affidavit filed on behalf of the respondents, it is clear that the petitioner was not put on notice before passing the impugned order dated 13.11.1998, ordering to recover the amount released on account of house building advance with penal interest. Even as per the Circular Order No.PD-41/95, dated 12th June 1995, the sanctioning authority is empowered to extend the time for utilization of the amount advanced in genuine cases, depending on the facts and circumstances explained by the employee with regard to completion of the house. Though the impugned order dated 13.11.1998 is passed alleging that the 2nd instalment amount is not properly utilized by the petitioner, but from a perusal of the said proceedings and the counter affidavit filed on behalf of the respondents, it is evident that there is no indication of giving any opportunity to the petitioner before ordering recovery by imposing penal interest. Even as per the respondents, an amount of Rs.34,422/- is already utilized by the petitioner and he has constructed the house upto basement level. While it is the case of the respondents that the 2nd instalment amount is not properly utilized, but however, it is stated in the affidavit filed by the petitioner that he has already procured the material but he could not proceed with construction in view of his transfer and illness of his daughter. If the respondents are of the view that the 2nd instalment amount was not utilized properly within the time frame for constructing the house, they could have notified to the petitioner before passing an order for recovery by imposing penal interest. Simply basing on the exparte inquiry report, the respondents ought not have passed the recovery proceedings by imposing 24% penal interest. The said action of respondents appears to be arbitrary and is in violation of the principles of natural justice. Though it is submitted by the learned Standing Counsel for the respondent-Corporation that the said imposition of penal interest is as per the circular instructions governing the house building advance, but when such an alteration is made, more particularly, when the 1st instalment amount is utilized by constructing the house upto basement level, respondents ought to have issued notice to the petitioner before ordering recovery and levying penal interest. However, disciplinary action is also initiated against the petitioner by suspending him from service, but this Court has granted interim orders on 09.07.1999 and in view of the said interim orders, the petitioner is continued in service all along and further, it is stated that during the pendency of the proceedings, petitioner is also promoted to the post of Leading Hand. 7. Out of the total amount of Rs.66,600/- released in favour of the petitioner, from the affidavit filed by the 3rd respondent, it is clear that an amount of Rs.56,984/- is already recovered and recovery is being affected at the rate of Rs.1,000/- per month as per the terms of the loan agreement. As much as this Court is of the view that the order dated 13.11.1998 is passed in violation of the principles of natural justice, I deem it appropriate to set aside the said proceedings by permitting the respondents to notify to the petitioner, the reasons, if any, for recovery of amount as per the circular instructions. 8. Accordingly, the writ petition is allowed and the impugned orders under challenge i.e. Proceedings No.P4/9(53)/90-ED-KR, dated 13.11.1998 and Proceedings No.E1/8(4)/98-NZB, dated 06.05.1999, are set aside. However, this will not preclude the respondents to recover the loan amount from the petitioner in instalments as per the loan agreement and also to issue further notice on the allegations levelled against the petitioner and to pass appropriate orders. 9. Subject to above directions, the writ petition is allowed to the extent indicated above. No order as to costs. ______________________ R. SUBHASH REDDY, J 19th January 2009. ajr