Parvathy Udayan vs South Indian Bank Ltd And Ors

The petitioner, who joined B.Sc Nursing Course is aggrieved by the rejection of her application for educational loan by the respondent Bank.

Petitioner had passed the Higher Secondary Course with 73% marks, after undergoing her studies in GLM International School, Ahmedabad.

Thereafter she got admission for B.Sc Nursing in the Oriental College of Nursing, Bengaluru, after being successful in an entrance examination

conducted by the College. Ext.P3 Fee Estimation Certificate was issued by the College on 14.11.2019. She submitted an application before the 2nd

respondent for Educational Loan, along with her mother as co-obligant. The Bank stated that petitioner's mother, Ambily was a co-obligant along with

Mr.Shanmugan (petitioner's father) for a housing loan availed by them and there was default in repayment and the loan had turned as a Non

Performing Asset on 07.04.2018. It is further stated that the Bank has received intimation stating that the proposal cannot be considered favorably

since petitioner has not secured minimum 80% marks in the individual qualifying subjects in her Plus Two examinations as stipulated by Bank's norms

on eligibility for Educational Loans.

The learned counsel for the petitioner points out that the petitioner and her mother are living separately from her father. It is stated that Ext.P8

Model Educational Loan Scheme, does not insist 80% marks in the qualifying examination and that the default made in re-payment of housing loan

availed by the parents, who are living separately, cannot be a reason as per the said Scheme for denying Educational Loan. The learned counsel points

out that as per Ext.P8 a student, who got a minimum of 60% marks in the qualifying examination, is eligible for the benefit under the said Scheme and

the Nursing Course is a professional course, for which Educational Loan can be sanctioned. It is also pointed out that the Scheme does not provide

that petitioner should qualify in an All India Entrance examination.

The 2nd respondent has filed a counter affidavit stating that the Head Office has issued a Circular Ext.R2(a), according to which Educational Loan

can be given only to those students, whose cut off marks should be a minimum of 80% in the subjects, which are considered as qualifying subjects and

75% in aggregate in Higher Secondary Course for higher education. It is also stated that petitioner has not secured admission on the basis of a

Common Entrance Test in the State. It is stated that her application was rejected in the light of Ext.R2(a) Circular. It is also stated that the default in

repayment of housing loan, which the petitioner's parents availed, was also one of the reason for rejecting the application of the petitioner. The learned

Standing Counsel for the Bank submitted that even though such a reason was stated in the order rejecting the application, the actual reason behind the

rejection was that petitioner did not appear in the Common Entrance Examination conducted by the State and did not acquire 80% of marks, in tune

with Ext.R2(a) Circular.

Having heard the learned counsel for the petitioner and learned Standing Counsel, Sri.K.K.John, it is seen that the respondents have not considered

the application submitted by the petitioner in tune with Ext.P8 Scheme or in tune with the spirit and intent of the scheme. The said Scheme, has been

floated in implementation of the directions issued by the Government of India for the purpose of providing financial support from banking system to

deserving/meritorious students for pursuing higher education in India and abroad, with the main emphasis that every meritorious student, though poor,

is provided with an opportunity for pursuing higher education with the financial support from the banking system with affordable terms and condition

and that no deserving student is denied an opportunity to pursue higher education for want of financial support. Respondents cannot say that the said

Scheme is not binding on the 2nd respondent or that they are not expected to act in tune with the intent of Scheme. Clause 3 provides that the Scheme

is to be adopted by all Commercial Banks. Under Clause 3, the changes permitted for the Schemes by the respective Banks are for suiting to the

convenience of the students to make it more customer friendly. It further provides for relaxation in the norms on a case to case basis. But the Bank

has made the provisions more stringent.

Going by Ext.P8 Scheme, petitioner cannot be said to be ineligible for Educational Loan. It is also a matter to be considered by the Bank that she is

undergoing Nursing Course, which is a professional undergraduate course and the Bank has to look into the prospects of the said course, while

considering her application. The financial position of the mother of petitioner cannot have any effect on determining the eligibility of the petitioner for

Educational Loan. The Bank is not expected to deny the opportunity to pursue her opportunity on the ground that her mother/ parents are defaulters in

repayment of housing loan.

It is also relevant to note that this Court had in Exts.P9 and P10 judgments in W.P. (C) Nos.19248/2019 and 10968/2020 had directed the respective

Banks to grant the benefits covered by the Model Educational loan Scheme to the petitioners therein.

Though the learned counsel for the respondent submitted that in those cases, the rejection was on the ground of CIBIL score of the parents of the

petitioners, in the present case, the case of the petitioner is not seen considered in tune with the provisions contained in Ext.P8 Scheme. The stringent

provisions in Ext.R2(a) Scheme framed by the respondent Bank cannot supersede the provisions in Ext.P8 Scheme.

Therefore Ext.P4 shall stand set aside. There shall be a direction to the respondents to reconsider the case of the petitioner for educational loan in

tune with the true spirit and intent behind Ext.P8 Scheme and to pass appropriate orders on it. Appropriate action shall be taken within a period of

three weeks from the date of receipt of a copy of the judgment.

Accordingly, the writ petition is disposed of.