THE HON'BLE MS JUSTICE G.ROHINI WRIT PETITION No. 18151 OF 1999 Date: 22.07.2010 Between: A.Munirathnam ..... PETITIONER AND Andhra Pradesh State Road Transport Corporation, rep. By its Vice Chairman, Hyderabad and 3 others .....RESPONDENTS The Court made the following:- THE HON'BLE MS JUSTICE G.ROHINI WRIT PETITION No.18151 OF 1999 O R D E R : The petitioner herein is an employee of Andhra Pradesh State Road Transport Corporation. Pursuant to his application dated 07.11.1991 the petitioner was sanctioned loan of Rs.36,000/- for purchasing a house site, vide 2nd respondent’s memo dated 01.09.1992. As per the terms and conditions specified in the said order, the petitioner shall hypothecate the house documents in the name of Corporation by executing a document in the prescribed proforma. For the said purpose a sum of Rs.5,000/- would be retained by the Corporation out of the loan amount sanctioned till the original title deed is deposited by the loanee. Accordingly, out of the amount sanctioned a sum of Rs.31,000/- was paid to the petitioner and the balance of Rs.5,000/- was retained by the Corporation. However, the petitioner could not deposit the title deeds within the time stipulated and consequently the Corporation while proposing to initiate disciplinary proceedings alleging misuse of HBA, imposed penal interest at the rate of 19% per annum as per circular dated 29.01.1986. The petitioner states that the entire penal interest was accordingly collected by the Corporation and the principal amount is being deducted in installments from the salary. While so, in the month of August, 1994 the petitioner purchased a site and submitted the title deeds to the Chief personnel Manager of the Corporation on 16.08.1994. Thereafter, the petitioner made a representation dated 21.11.1994 requesting the Deputy Chief Personnel Manager to release the balance of Rs.5,000/- retained by the Corporation out of the loan amount and to waive the penal interest. By letter dated 31.10.1995 the petitioner’s request was rejected by the Corporation. Aggrieved by the said action, the present writ petition is filed seeking a declaration that the action of the respondents in forfeiting loan amount of Rs.5,000/- apart from collecting the penal interest at the rate of 19% per annum even after depositing the original title deeds is arbitrary and illegal. In the counter affidavit filed on behalf of the Corporation it is reiterated that as per circulars dated 29.01.1986 and 14.08.1991 the petitioner was liable to pay the penal interest as he had failed to deposit the title deeds within the stipulated period. It is contended that the forfeiture of the loan amount to the extent of Rs.5,000/- was also in accordance with law. However, the fact that the petitioner had subsequently purchased the house site and the title deeds were deposited in the month of August, 1994 has not been disputed by the Corporation. I have heard the learned counsel for both the parties and perused the material available on record. In view of the admitted fact that the petitioner had purchased the site and the title deeds were also deposited with the respondent- Corporation, it cannot be said that the petitioner had misused the HBA. As there was admittedly delay in purchasing the site and consequently the title deeds were not deposited within the stipulated period, though the action of the Corporation in imposing the penal interest as provided in the circular dated 29.01.1986 cannot be held to be arbitrary or illegal, no justifiable reason could be shown by the Corporation for forfeiting the loan amount of Rs.5,000/-. I also find force in the contention of the learned counsel for the petitioner that the Corporation is not entitled to collect penal interest even after depositing the title deeds. Accordingly, the action of the Corporation in forfeiting Rs.5,000/- out of the loan amount sanctioned to the petitioner and collection of penal interest even after the title deeds were deposited, is declared as arbitrary and illegal and the Writ Petition is disposed of directing the respondents to release the said amount of Rs.5,000/- together with the penal interest collected from the petitioner after the title deeds were deposited as expeditiously as possible preferably within a period of eight (8) weeks from the date of receipt of this order. No costs. ​ ____________ Date: 22.07.2010 G. ROHINI, J Ivd