The Corporation has the discretion to grant loans after considering the purpose and chances of recovery, and its decision not to release a loan amount due to a likelihood of misappropriation is not arbitrary.

Nagendra Rai, J.

1. This appeal is directed against the judgement dated 26.3.92 passed by the learned single judge of this court in C.W.J.C. No. 5670/87 by which he has directed the appellant no. 2 the Bihar State Scheduled Caste Co-operative Development Corporation Ltd. (hereinafter referred to as the Corporation) to release/pay the remaining sanctioned amount of ban to the respondent no. 1 Akhil Bhartiya Jan Kalyan Sarigh (hereinafter referred to as the Sangh or Association).

2. The respondent no. 1 (Sangh) through its General Secretary respondent no. 2 Govind Das Shastri filed a writ application with a prayer to direct the appellant no. 2 (the Corporation) to release/pay the remaining sanctioned amount of loan of Rs. 2,38,000/- for which it has already furnished the security/bonds.

3. The facts which are not in dispute are; that the Government of Bihar established the Corporation with the finacial aid in ; grant/subsidy/loan granted by the Government of India as well as the State Government, besides other agencies with a vjiew to provide financial assistance in grant/subsidy/loan to the persons or socjieties belonging to the Scheduled Caste for their upliftment Respondent no.1 (the Sangh) is the Association reg stered under the Indian Societies Act and respondent no. 2, who belong to the scheduled caste, is its Genera! Secretary. The Association is also registered member of the Corporation. The Sangh through its General Secretary made a prayer before the Corporation to run a Scheduled Caste/Scheduled Tribe Women Centre in Bhagalpur. In the year, 1983 the Managing Director of the Corporation granted permission in anticipation of approval of the Board of Directors to start Women Stitching and Cutting Centre at Bhigalpur and funds were made available to the Association through the appellant-Corporation. In the meantime, complaints were received that the amount released in favour of the Sangh is being misappropriated by its General Secretary (respondent no. 2). Thereafter, an enquiry was made by the Corporation and it was found that the amount is being misappropriated by showing employment of fake persons. It was also found that the Centre was not running properly. On receipt of the enquiry report the Corporation directed the Association to close the aforesaid Centre and return back the articles but inspite of that direction the respondent no. 2 did not return the articles and thereafter a direction was issued to lodge a F.I.R. against him. A title suit no. 145/90 was also filed against the respondent no. 2 with regard to the recovery of the money etc.

4. In the year, 1986 trie Association, as per the scheme of the Government of India, submitted a detailed project/scheme including development scheme for development of 100 acres of land to be made fit for agricuiture purpose and for construction of houses for rehabilitation of scheduled castes who have no house to five in. The estimated costs of both the projects were Rs.12,00,000/- The matter was considered by the Corporation in its meeting datec 13,11.86 in which the General Secretary (respondent no. 2) also participated! and the projects/schemes of the respondent Association was accepted and a loan of Rs.2.50 lacs was sanctioned. Thereafter, the Association submitted all the necessary documents including the bonds executed by them and then Rs. 12000/- was released in favour of the Association and the remaining amount was not released inspite of the several requests made by the Associatipn for release of the remaining amount of the sanctioned loan and hence the Association through its General Secretary (respondent no. 2) filed the writ application.

5. The stand of the Corporation is that the respondents are not entitled to get more amount of sanctioned loan as the earlier amount released to the Association for running the training centre on enquiry has been found to be misappropriated by it and its General Secretary for which action has already bein taken. As such it w