7. [ Prohibition of misapplication of loan under the Act. [Added by CP & Berar Act No. LIV of 1949.]
(1)Every person taking loan under this Act shall, in the manner provided for in the rules made by the State Government in this behalf and the conditions contained in the order granting such loan, apply the amount thereof for the purpose and within the period specified in the order granting such loan.(2)Without prejudice to any penalty which may be imposed under any other provision of law or instrument, any person who fails to comply with the provisions of sub-section (1) shall, on an order in writing passed by a revenue officer not below the rank of Sub-Divisional Officer, be liable to pay by way of penalty such sum not exceeding twice the amount of the loan outstanding as such officer may by order fix unless such person refunds the amount of loan and satisfies such officer that the failure was due to reasons beyond his control.]
