IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 3.11.2010 CORAM THE HONOURABLE MR. JUSTICE R.SUDHAKAR Writ Petition No.18935 of 2010 K.Vijayakandhan ... Petitioner vs. The Manager, Canara Bank, Murugankudi Branch, Murugangudi and Post, Thittakudi Taluk, Cuddalore District 606 105. ... Respondent Writ Petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Mandamus, to direct the respondent to consider the petitioner's representation dated 31.7.2010 and sanction the educational loan in his favour. For Petitioner : Mr.G.Anabayachozhan For Respondents : Mr.Sanjay Gandhi, ----- O R D E R
Writ Petition is filed praying to issue a Writ of Mandamus, to direct the respondent to consider the petitioner’s representation dated 31.7.2010 and sanction the educational loan in his favour.
2. The grievance of the petitioner is that after completing his school studies, he joined the Bachelor of Engineering Course (Mechanical) at Annamalai University, Chidambaram, Cuddalore District. Petitioner’s father is an agricultural coolie. Hence, he approached the respondent bank for getting educational loan, but the respondent bank even not furnished the loan application. Hence, his father Mr.Krishnamoorthy sent a representation to the District Collector, Cuddore. District Collector, Cuddalore forwarded the same to the Lead District Bank, Cuddlore. The lead Bank Cuddalore, in its letter dated 4.2.2009 forwarded the representation of the petitioner to the respondent bank marking copy to the petitioner’s father. In that letter petitioner was requested to approach the respondent bank. Thereafter petitioner submitted a representation enclosing all particulars including the Lead Bank’s recommendation to the respondent for grant of educational loan. The respondent bank, however, did not sanction educational loan. Hence, he filed this writ petition for a mandamus.
3. In similar matters this Court (R.SUDHAKAR,J.) passed a detailed order in W.P.Nos.17507 and 17508 of 20010 dated 28.10.2010 as to how an application for grant of educational loan should be considered. Relevant paragraphs 5, 6 and 10 to 14 reads as follows:-
“5. The Government considering the importance of education and its pivotal role in human resource development and to drive the economic growth of the country has formulated the Model Educational Loan Scheme as early as in the year 2001. The Reserve Bank of India has also issued circular No.RPCD.PLNFS.BC.NO.83/06.12.05/2000-01 dated April 28, 2001 together with certain modifications suggested by the Government of India. This was based on the Hon’ble Financial Minister’s Budget Speech in the year 2004-2005. The educational loan is being extended by all Nationalised Banks and the Government of India has impressed upon the banks to extend facility to deserving/meritorious students to avail educational loan on certain affordable terms for pursuing higher education in India and abroad. The basis for introducing the scheme and the objectives is as follows:-
“1. INTRODUCTION:
Education is central to the Human Resources Development and empowerment in any country. National and State level policies are framed to ensure that the basic need of the population is met through appropriate public and private sector initiatives. While government endeavour to provide primary education to all on a universal basis, higher education is progressively moving into the domain of private sector. With a gradual reduction in government subsidies higher education is getting more and more costly and hence the need for institutional funding in this area.
The scope of education has widened both in India and abroad covering new courses in diversified areas. Development of human capital is a national priority and it should be the endeavour of all that no deserving student is denied opportunity to pursue higher education for want of financial support. Loans for education should be seen as an investment for economic development and prosperity. Knowledge and information would be the driving force for economic growth in the coming years.
Based on recommendations made by a Study Group, IBA had prepared a Model Educational Loan Scheme in the year 2001 which was advised to banks for implementation by Reserve Bank of India vide circular No.RPCD.PLNFS.BC.NO.83/06.12.05/2000-01 dated April 28, 2001 along with certain modifications suggested by the Government of India. In line with the announcement made by the Hon’ble Finance Minister in his Budget Speech for the year 2004-05, IBA had communicated certain changes in the security norms applicable to educational loans with limits above Rs.4 lakhs and upto Rs.7.5 lakhs.
We have been receiving enquiries from members seeking clarifications on the various provisions of the scheme based on feedback received from the branches. With a view to ensure that the scheme is implemented in letter and spirit, it was decided to review the scheme and make modifications in the scheme to facilitate smooth operation at bank branches. Towards this, a Working Group of General Managers drawn from select banks was constituted at IBA. This revised model scheme has been prepared based on the suggestions made by the Group.
(emphasis supplied)
2. OBJECTIVES OF THE SCHEME:
The Educational Loan Scheme outlined below aims at providing financial support from the banking system to deserving/meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student though poor is provided with an opportunity to pursue education with the financial support from the banking system with affordable terms and conditions. No deserving student is denied an opportunity to pursue higher education for want of financial support.”
3. APPLICABILITY OF THE SCHEME:
The scheme detailed below could be adopted by all Commercial Banks. The scheme provides broad guidelines to the banks for operationalising the educational loan scheme and the implementing bank will have the discretion to make changes suiting to the convenience of the students/parents to make it more customer friendly.
The scheme details are as under:
4. ELIGIBILITY CRITERIA:
4.1.Student Eligibility:
Should be an Indian National.
Secured admission to professional/technical courses in India or Abroad through Entrance Test/Merit Based selection process.
4.2.Courses eligible:
a. Studies in India:(indicative list)
Graduation courses: B.A., B.Com., B.Sc., etc.,
Post Graduation courses: Masters & Phd.
Professional courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer, etc.,
Computer certificate courses of reputed institutes accredited to Dept. of Electronics of Institutes affiliated to university.
Courses like ICWA, CA, CFA, etc.,
Courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc.,
Regular Degree/Diploma courses like Aeronautical, pilot training, shipping etc., approved by Director General of Civil Aviation/Shipping, if the course is pursued in India. In case the course is pursued abroad, the Institute should be recognized by the competent local aviation/shipping authority.
Courses offered in India by reputed foreign universities.
Evening courses of approved institutes.
Other courses leading to diploma/degree etc., conducted by colleges/universities approved by UGC/Govt./AICTE/AIBMS/ICMR etc.
Course offered by National Institutes and other reputed private Institutions, Banks may have the system of appraising other institution courses depending on future prospects/recognition by user institutions.
Courses, which are not covered under the criteria mentioned above, individual banks may take a view to consider extending.
education loan under the scheme taking into account the future prospects/recognition by user institution.
b. Studies abroad:-
Graduation: For job oriented professional/ technical.
Courses offered by reputed universities.
Post graduation: MCA, MEA, MS, etc.,
Courses conducted by CIMA-London, CPA in USA etc.,
4.3.Expenses considered for loan:
Fee payable to college/school/hostel
Examination/Library/Laboratory fee.
Purchase of books/equipments/instruments/ uniforms.
Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts, subject to the condition that the amount does not exceed 10% of the total tuition fees for the entire course.
Travel expenses/passage money for studies abroad.
Purchase of computers essential for completion of the course.
Insurance premium for student borrower.
Any other expense required to complete the course like study tours, project work, thesis, etc.,
6. In order to consider the plea of the petitioners, it will be relevant to refer to clause 15 of the Revised Model Educational Loan Scheme For Pursuing Higher Studies in India and Abroad. Clause 15 reads as follows:-
15. OTHER CONDITIONS:
a. Meritorious Students
Banks which wish to support highly and exceptionally meritorious/deserving students without security may delegate such powers to a fairly higher level authority.
b. Multiple Loans
In case of receipt of application for more than one loan for student borrower from a family, the ‘family’ as a unit has to be taken into account for considering the loan and security taken in relation to the total quantum of finance disbursed, subject to margin and repaying capacity of the parent/student.
c. Minimum Age xxxx d. Change of address xxx e. Top up loans
Banks may consider top up loans to students pursuing further studies within the overall eligibility limit, with appropriate re-schedulement, subject to taking required security.
f. Co-obligator xxx
No due certificate
No due certificate need not be insisted upon as a pre-condition for considering educational loan. However, banks may obtain a declaration/an affidavit confirming that no loans are availed from other banks.
Disposal Application
Loan applications have to be disposed of within a period of 15 days to 1 month, but not exceeding the time norms stipulated for disposing of loan applications under priority sector lending.
Flexibility in terms
In order to bring flexibility in terms like eligibility, margin, security norms, banks may consider relaxation in the norms on a case-to-case basis delegating the power to a fairly higher level authority.”
“10. The emphasis is that no deserving/meritorious students of this country should be denied the opportunity to pursue higher education for want of financial support. The first respondent bank cannot deny the petitioners, their legitimate right to get educational loan under the scheme if they qualify and are eligible. If the bank adopt this narrow interpretation it will be retrograde and go against the State’s endeavour to promote education. The scheme is intended to improve the human capital of the nation and the banks are given a role in the development of the human resources of our country.
11. The emphasis in the scheme is that the bank should adopt a customer friendly method to cater the needs of the meritorious students. In this background, the two petitioners are justified in approaching this Court for a direction to the bank to issue the loan application form. The respondents bank ought to have given the same promptly and immediately. The attitude of the Bank should be positive and encourage students to avail education loan and pursue their education. The role of the Bank Manager in rural India is even more important to promote this scheme.
12. Considering the laudable purpose of this scheme, the Chairman of all the Nationalised Banks/Commercial Banks should suitably instruct the Bank Managers, especially at the rural areas to ensure that as and when eligible and poor students seek application form and apply for educational loan, their case should be considered sympathetically and in a customer friendly manner to promote the cause of education and nation building as the scheme is intended to fill up the vacuum that the State is feeling difficult to fill. The education loan should not be denied on hyper technicalities. The authority should not forget that it is because of education that he is holding the post of Manager. The educated youth are the bulwark of the nation. They are the building blocks of the nation. If their eyes are opened by proper education, it will benefit our country and uplift the family. Education is still a far dream to millions in this country and that is why the scheme has used the words “endeavour of all” in the “Introduction” to the Scheme.
13. The Bank Managers should not develop retrograde attitude and deny education loan arbitrarily. They have to promote the cause of education, which will empower youth of our nation.
14. Keeping the above principle in mind the respondents are directed to issue the loan application form immediately on production of a copy of this order and process the application for grant loan to the students on complying with other formalities. The writ petitions stand ordered as above. No costs.”
4. The above decision will squarely applies to the fact of this case. In view of the above decision, the respondent is directed to consider the petitioner’s representation dated 31.7.2010 and recommendation made by the Lead Bank, Cuddalore, for grant of educational loan to the petitioner on complying with other formalities immediately. The writ petition is ordered as above. No costs.
3.11.2010
Index: No
Internet: Yes
Office to note:-
Issue copy on 8.12.2010"
mra/ts
To
The Manager,
Canara Bank,
Murugankudi Branch,
Murugangudi and Post,
Thittakudi Taluk,
Cuddalore District 606 105.
R.SUDHAKAR,J.,
ts
Order in
W.P.No.18935 of 2010
Date 3.11.2010