S.Veerakarthikeyan vs The Branch Manager on 27 November, 2014

[Cites 2, Cited by 2]

Madras High Court

S.Veerakarthikeyan vs The Branch Manager on 27 November, 2014

2.No steps have been taken for issuance of notice on behalf of the Petitioner in so far as the Second Respondent/ College is concerned. Since the First Respondent/Bank alone has to sanction the educational loan to the Petitioner, notice to the Second Respondent is also dispensed with, by this Court, in the interest of Justice.

3.The Petitioner has projected the present Writ of Mandamus, praying for passing of an order by this Court in directing the First Respondent/Bank to sanction and disburse the educational loan to him for pursuing the M.B.B.S. Degree Course at Karpaga Vinayaga Institute of Medical Science and Research Centre, Chinna Kolambakkam, Palayanoor Post, Maduranthagam Taluk, Kanchipuram District, within the period that may be determined by this Court.

4.According to the Petitioner, he is a resident of Village in Sayalkudi, Ramanathapuram District. He has secured 468 marks out of 500 in Tenth Standard. Further he had secured 1127 marks in Higher Secondary Course during March, 2012. It was his dream from childhood to pursue Medical Education. He tookpart in the Counselling held in M.B.B.S. Course and was allotted the M.B.B.S. seat at Karpaga Vinayaga Institute of Medical Science and Research Centre, Chinna Kolambakkam, Palayanoor Post, Maduranthagam Taluk, Kanchipuram District/Second Respondent herein. He had joined the Second Respondent College to pursue his studies and had paid his First Year fees with great difficulty. His father is working in a private firm and as such he could not meet out his educational expenses.

5.When that be the fact situation, the Petitioner had approached the First Respondent/Bank for educational loan in September, 2013 to continue his studies. To avail educational loan, he had produced bona fide and Fee Certificate certifying that he is a bona fide student of the Second Respondent. As he has to pay a sum of Rs.13,75,000/- for Five Years as fees, which includes Tuition Fees, Exam Fees, Hostel Fees and University Registration Fees [as stated in paragraph No.5 of the Affidavit of the Writ Petition and according to the learned counsel, the Petitioner has to pay a sum of Rs.16,75,000/- for Five Years in question], which is beyond his economic strength. As such, unless, the said loan is sanctioned, he may not be able to complete his education.

6.The Learned Counsel for the Petitioner contends that the Petitioner is desirous of studying his professional course and his family is not financially sound to backup and meet the expenses for him. Therefore, he had approached the First Respondent/Bank several times in person and submitted his application with necessary requirements to avail the educational loan. The First Respondent orally informed him that they would consider his educational loan as per norms of the Bank. Also that he has to pay the second year fees by the month of December, 2014.

7.The Petitioner had preferred a representation dated 10.03.2014 to the First Respondent/Bank to sanction and disburse the educational loan. However, the First Respondent/ Bank having received the same, had not taken any steps to sanction and disburse the loan amount so far. Unless, the First Respondent disburses the loan amount in question, he could not be in a position to continue his studies.

8.Per contra, it is the submission of the Learned Counsel for the First Respondent/Bank that at the first instance, the Petitioner was informed about the necessity of furnishing security for huge loan amount of Rs.16,75,000/- and also that in the first instance, they had not come prepared and not able to furnish the security so as to avail the educational loan. Further his application was sent to the Bank Higher Authority namely, the Regional Manager No.II, Zonal Office at Madurai. Also that there is no request from the Petitioner till 12.03.2014 in regard to the educational loan in issue.

9.It is the stand of the First Respondent/Bank that the Petitioner never approached their branch after September, 2013. His representation alone reached the First Respondent Branch/Bank through Registered Post on 12.03.2014 and neither the Petitioner nor his father approached the First Respondent Branch till today.

10.The Learned Counsel for the First Respondent/ Bank contends that the Educational Loan Scheme was formulated in November, 2004 on the basis of I.B.A. Guidelines as per the Government of India directives. The Model Education Loan Scheme was revised by I.B.A. in November, 2007 and forwarded to the Member Banks for its implementation. The I.B.A. had also advised few changes subsequently, which are incorporated in the Scheme. Based on the above, the First Respondent/Bank has issued a Circular during the year 2011 and based on that, it is sanctioning the educational loan to the meritorious and needy persons.

11.According to the First Respondent/Bank, as per Circular, the Student Eligibility is as under:

STUDENT ELIGIBILITY is Should be an Indian National Secured admission to Professional/Technical courses through Entrance Test/Selection process.* Secured admission to foreign university/ Institutions.* No minimum qualifying marks stipulated in the last qualifying examination Education Loans may also be considered for students getting admissions to Colleges/ Institutions on Management Quota Loan proposals from students who have failed in the last qualifying examination including class XII and subsequently cleared, discontinued studies and resumed again may be considered after satisfying the reasons for the same.

The sanctioning authority may consider loan proposals from students in cases where the parent/guardian is defaulter after satisfying about the background of the student and if the margins and security norms etc. are met by the student and de-linked from such defaulter/co-borrower and replaced by another co-borrower.

Presently, our scheme does not prescribe any age limit for the students availing the loan. Wherever, parents/guardians are not there the branches may consider grandparent as co-borrower to the loan taking into account their net worth.

*Note:(I) In certain cases, the student/parents are required to deposit a part of the admission fee etc. on the day they go for counseling. It becomes difficult for them to raise funds in the absence of a firm admission letter. In such cases, the sanctioning authority will be authorized to sanction and release the loan in the name of the institution, provided

a) the admission is sought in cases where the results of the entrance test e.g. All India Engineering Entrance Examination (AIEEE), has been announced and

b) the student has secured a good position in the merit list and will be in a position to secure admission in a reputed institution after counseling/finalization of the admissions.

The payment will be released in the name of the institution only. *Note(II) Several foreign universities require students to deposit a part of the fee before the admission is formally granted. They enforce such a condition as students simultaneously apply to a number of universities and then choose the best option on the basis of their preference and availability of scholarship from the institution. In such cases, the sanctioning authority, not below the rank of an Assistant General Manager, will be authorized to sanction and release the loan in the name of the educational institution, provided:

a) Admission is sought to a reputed Business School/reputed educational institution or

b) Tangible collateral security equal to full value of the loan has been provided.

THE SECURITY FOR THE GRANT OF LOAN Security ? For loans upto Rs.10 lacs for studies in India and upto Rs.20 lacs for studies abroad

a)Upto Rs.4 lacs Co-obligation of parents No security

b) Above Rs.4 lacs and upto Rs.7.50 lacs.

Co-obligation of parents together with collateral security in the form of suitable third party guarantee. The bank may, at its discretion, in exceptional cases, waive third party guarantee if satisfied with the net- worth/means of parent/s who would be executing the documents as ?joint borrower?.

c)Above Rs.7.50 lacs Co-obligation of parents together with tangible collateral security of suitable value, along with the assignment of future income of the student for payment of instalments The documents should be executed by both the student and the parent/guardian as joint-borrower. We clarify that if the student is a minor, the documents will be signed by the guardian acting 'for self' as well as 'for and on behalf of the minor'.

The Law Department opined that for the purpose of Education Loan the guardian is defined as under:

?Natural guardian, the legal guardian i.e. a guardian appointed by any authority, or a person in-charge of the care of the person and property of the student who intends to avail such loan facility? The co-obligator should be parent(s)/guardian of the student borrower. In case of married person, co-obligator can be spouse or the parent(s)/parents- in-law?.

12.That apart it is the categorical plea of the First Respondent/Bank that the Petitioner is studying in M.B.B.S. Course by getting admission through Counselling in the Government Quota. The said course is eligible for the grant of educational loan and the loan is only granted for the Course/ Degree. No loan is sanctioned in piecemeal for a single Course and the disbursement may be in a piecemeal namely year wise disbursement. Further, since the Petitioner is eligible to obtain educational loan, he should produce sufficient security for the grant of loan. Moreover, the person, who wanted financial assistance from the Bank, should appear in person and satisfy all the requirements including the security. Educational loans cannot be granted through e-mail or Registered Post.

13.The First Respondent/Bank is following the principles and decisions of the Government of India and providing services to the needy and meritorious persons. The Petitioner without approaching the First Respondent/Bank in a proper way, has filed the present Writ Petition. Further, the Bank is ready to provide educational loan to the Petitioner, if he satisfies all the norms of the Bank by providing sufficient security for his personal loan.

14.The learned Counsel for the Petitioner seeks in aid of the Division Bench Judgment of this Court, dated 21.06.2013, [The Regional Manager, State Bank of India, Supreme Hotel Opposite, (Near Railway Station), Madurai. 2.The Branch Manager, State Bank of India, No.36/73, PM Road, Bodinayakanur Branch, Theni District ? 625 513 v. R.Vijai Priya, 2.The Reserve Bank of India, rep. by Manager, Regional Office, Chennai] reported in 2013(2) CWC 53, at Sub Page No.54, wherein in Paragraph Nos.12 to 14, it is observed and held as follows:

?12.For each year, she need a specified amount. This is self-evident in the expenditure certificate dated 25.08.2012. In each year, the miscellaneous expenses of Rs.45,200/- (Rs.45,200 x 3 = Rs.1,35,600/-) has to be deducted and at the appropriate time, the balance has to be disbursed.

13.It is to be noted that now she is in the second year of the course.

The second year fees has to be paid before 26.06.2013. She has already paid her first year fees, as she has to pay it within stipulate time without waiting for loan disbursement by the Bank, or else she will lose her admission itself. Necessarily she should have arranged that amount, from other sources. She sought loan for first year also. So, as per the prevailing Bank practice for educational loan, the first year expenditure amount within the permissible limits already indicated by us has to be reimbursed to her on production of necessary bills.

14.In the result, the Writ Appeal is allowed in part. The order of Writ Court is modified. The Second Appellant is directed to sanction educational loan of Rs.3,10,100/- to the First Respondent/ Petitioner. Out of that, the amount already paid for the first year has to be reimbursed to the Petitioner on production of bills. For the present second year, tuition fees and other college fees shall be paid to the educational institution, the balance shall be disbursed to the Petitioner. At the appropriate time, the same shall be the pattern for the disbursement for the third year. The disbursement to the educational institution for the current year shall be made on or before 26.06.2013. Consequently, connected Miscellaneous Petition is closed. No costs?.

15.There is no second opinion of the fact that the Petitioner is a bona fide student of the second respondent and he has to pay a sum of Rs.16,75,000/- for five years towards his fees. According to him, his father is working in a private firm and as such he could not support his educational expenses. It is to be borne in mind that when once the Petitioner's admission/ eligibility is established and if a candidate is selected by anyone of the modes of selection, then it is not open to a Bank to refuse loan facility for education purpose and that too to a needy and deserving candidate like the Petitioner, in the considered opinion of this Court. Moreover, when the Petitioner's M.B.B.S. Course is approved by the competent body and when the College in question is affiliated to a particular University which conducts examination, then ordinarily/generally, there may not be any impediment for a Bank to grant or sanction the loan in question.

16.It cannot be brushed-aside that the Schemes and Policy which framed by the Central Government and the benefit should reach the deserving and needy individuals. In reality, a Bank is not entitled to adopt a lopsided/pedantic or hyper-technical approach so as to defeat the purpose of Scheme introduced by Central and State Governments.

17.In the present case on hand, if the First Respondent/Bank is not sanctioning/granting educational loan to the Petitioner, then it may infringe upon Article 14 of the Constitution of India, which prohibits discriminatory treatment to a citizen.

18.Be that as it may, considering the fact that the petitioner is in need of educational loan for his M.B.B.S. studies and in view of the fact that he is a bona fide student of the Second Respondent College and this Court taking note of yet another fact that he is in need of educational loan, because of the reason that his father, who works in a private firm, cannot support his educational expenses, in the interest of Justice, fair play, on balance and on equitable considerations, directs the First Respondent/Bank to consider the application of the Petitioner (already submitted by him) for obtaining/sanctioning of educational loan to him within a period of three weeks from the date of receipt of a copy of this order in accordance with the Policy of the Central Government as well as the Scheme framed by the Reserve Bank of India as held by the Division Bench of this Court in W.A.No.144 of 2009, dated 12.10.2009. Also that in the order dated 16.11.2007 in W.P.No.33933 of 2007, dated 16.11.2007, this Court held that just because a student failed in one subject, it does not mean that he is unqualified to obtain the educational loan. Further the Petitioner is also directed to render his unstinted cooperation and assistance to the First Respondent/bank in regard to the availing of the educational loan and the consequent sanctioning of the said educational loan by the Bank.

19.With the aforesaid observations and directions, this Writ Petition is disposed of. No costs. Consequently, connected Miscellaneous Petition is closed.



								  27.11.2014
Index     : Yes
Internet  : Yes
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M.VENUGOPAL, J.


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To

The Branch Manager,
State Bank of India,
Theni Branch,
S.Tharaikudi (Via),
Sayalkudi,
Ramanathapuram District.



ORDER MADE IN
W.P(MD)No.17060 of 2014
and
M.P(MD)No.1 of 2014














27.11.2014

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