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2014 DIGILAW 1459 (MAD)

Branch Manager, Indian Overseas Banks v. A. Ravi

2014-06-17

M.SATHYANARAYANAN, N.PAUL VASANTHAKUMAR

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Judgment : N. Paul Vasanthakumar, J. 1. This Writ Appeal is filed against the Order dated 20.6.2013 made in W.P.No. 923/2013, wherein the First Respondent has challenged the reply sent by the Appellant-Bank dated 15.9.2012 and prayed for a direction to the Appellant-Bank to sanction Educational Loan for a sum of Rs.1,88,000/-as per the existing Educational Loan Scheme to the son of the First Respondent within the stipulated time. 2. The said Writ Petition was allowed by the learned Single Judge of this Court by taking note of the fact that the son of the First Respondent had secured 59% marks and got admission in B.E. Degree course. The contention of the Bank was that the candidates, who have secured 60% marks and above alone are eligible to get Education Loan as they alone can be treated as meritorious candidates. 3. Heard the learned Counsel for the Appellant and respective Counsel for Respondents 1 & 2. 4. The Government of India launched the scheme of providing Educational Loans to the economically disadvantaged people, through Nationalised Bank. Sanction of Educational Loan is not free, but it is repayable with interest at a later point of time, of course, at reduced rate of interest. The whole idea behind the scheme is to finance the economically disadvantaged people in their educational career. It is a social commitment for the upliftment of weaker, vulnerable and other sections of the society. It is a social welfare measure. In a way, it is some sort of social banking. The Public Sector Banks and other financial institutions must bear in the policy in mind while sanctioning Educational Loans covering the genuine, reasonable and justified educational expenses and relieve the students and their parents from pressing financial crisis. 5. The issue as to whether a person admitted in the Management quota, is eligible to get Education Loan, has already been settled by the announcement of the Union Finance Minister. It was stated therein that the students admitted in Management quota are also entitled to get the Education Loan and all the Banks were directed to adopt the said policy. A Review Meeting with the Chief Executives of the Public Sector Banks was conducted on 27-9-2012 and a decision was taken stating that the Honourbale Minister brought out a number of areas in the implementation of Educational Loan Scheme, where the Government was constantly receiving grievances/Complaints from affected students/parents. A Review Meeting with the Chief Executives of the Public Sector Banks was conducted on 27-9-2012 and a decision was taken stating that the Honourbale Minister brought out a number of areas in the implementation of Educational Loan Scheme, where the Government was constantly receiving grievances/Complaints from affected students/parents. One of the grievance was that the meritorious students admitted under the Management quota are denied Education Loan. The said position was reviewed at the level of Committee on Educational Loan Scheme and thereafter, the Managing Committee at its meeting held on 27.9.2012, based on the discussions, took a decision and it was resolved that the Managing Committee considered the recommendations made by the IBA Committee on Educational Loan Scheme and after detailed discussions decided to incorporate a provision for financing meritorious students, who pursue courses under Management quota in an institution for reasons of convenience (proximity) or choice of course. It is also stated in the decision that Loan Applications have to be disposed of within a period of 15 days to one month. 6. The recommendations of the IBA (Indian Bank Association) with regard to Eligibility Criteria, Expenses considered for sanction of loan, Quantum of Finance and the Security to be made for sanction of Education Loan are as follows: “4. Eligibility Criteria: 4.1. Student eligibility: * The student should be an Indian National. * Should have secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test/Merit Based Selection process after completion of HSC (10 plus 2 or equivalent). However, entrance test or selection purely based on marks obtained in qualifying examination may not be the criterion for admission to some of the post graduate courses or research programmes. In such cases, Banks will have to adopt appropriate criteria based on employability and reputation of the institution concerned. Note: It would be in order for Banks to consider a meritorious student (who qualifies for a seat under merit quota) eligible for loan under this scheme even if the student chooses to pursue a course under Management Quota. …. ….. …. 4.3. Expenses considered for loan: (i) Fee payable to College/School/Hostel (ii) Examination/Library/Laboratory fee (iii) Travel expenses/Passage money for studies abroad (iv) Insurance premium for student borrower, if applicable (v) Caution deposit, Building fund/refundable deposit supported by Institution Bills/Receipts. (iv) Purchase of books/equipments/instruments/uniforms. …. ….. …. 4.3. Expenses considered for loan: (i) Fee payable to College/School/Hostel (ii) Examination/Library/Laboratory fee (iii) Travel expenses/Passage money for studies abroad (iv) Insurance premium for student borrower, if applicable (v) Caution deposit, Building fund/refundable deposit supported by Institution Bills/Receipts. (iv) Purchase of books/equipments/instruments/uniforms. (vii) Purchase of computer at reasonable cost, if required for completion of the course. (viii) An other expense required to complete the course-like study tours, project work, thesis, etc. (ix) While computing loan required, scholarships, fee waiver, etc, if any available to the student borrower may be taken into account. 5. Quantum of Finance: Need based finance to meet the expenses worked out as per Para 4.3 above will be considered taking into account margins as per Para 6 subject to the following ceilings: Studies in India … Maximum upto Rs.10 lakhs Studies abroad …. Maximum upto Rs.20 lakhs … … … … … … 7. Security Upto Rs.4 lakhs Parents to be joint borrowers. No security Above Rs.4 lakhs and upto Rs.7.5 lakhs Besides the parents executing the documents as joint borrowers collateral security in the form of suitable third party guarantee will be taken. The Bank may, at its discretion, in exceptional cases, waive third party guarantee if satisfied with the net-worth/means of parents, who would be executing the documents as joint borrower(s). Above Rs.7.5 lakhs Parent(s) to be joint borrower(s) Tangible collateral security of suitable value acceptable to Bank, along with the assignment of future income of the student for payment of instalments.” In the Guidelines framed in the Review Meeting held on 27.9.2012 nowhere it is stated that Education Loan can be sanctioned only for those, who have secured 60% and more marks. 7. In the light of the revised policy evolved in the Review Meeting held on 27.9.2012 at the instance of the Honourable Finance Minister, Government of India, we are unable to find any reason to interfere with the order of the learned Single Judge dated 20.6.2013 in allowing the Writ Petition. Consequently, this Writ Appeal is dismissed, confirming the Order dated 20.6.2013 made in W.P.No. 923/2013. The Appellant Bank is directed to process the Application of the First Respondent without reference to the objections raised and sanction Education Loan as per the eligibility of the First Respondent, within a period of two weeks from the date of receipt of a copy of this Order. No Cost. The Appellant Bank is directed to process the Application of the First Respondent without reference to the objections raised and sanction Education Loan as per the eligibility of the First Respondent, within a period of two weeks from the date of receipt of a copy of this Order. No Cost. Consequently, connected Miscellaneous Petition is closed.