Judgment · High Court · 2009

Since the petitioner is not ameritorious student, he is not eligible for loan. The learned counselfor the respondent Bank also submitted that the circular dated03.06.2008 of the Head Office of the State Bank of Travancoreprescribed 45% of marks for SC/ST category candidates to sanction theeducational loan. In support of his contention, the learned counselrelied on the following judgments:1)Raunaq International Ltd., Vs. I.V.R. Construction Ltd.,and others reported in AIR 1999 SC 3932)Tamil Nadu Industrial Investment Corporation Ltd., Vs.Millenium Business Solutions Pvt. Ltd., reported in 2004(5) CTC 689 3)Dhampur Sugar (Kashipur) Ltd., Vs. State of Uttaranchalreported in 2007 (8) SCC 4184)Deen Dayal Medical & Educational Trust Vs. Housing and Urban Development Corporation reported in AIR 2009 MADRAS819.I have considered the submissions made on either side. According to the learned counsel for the respondent, educational loanwas not sanctioned to the petitioner as the petitioner did not obtain45% of marks in the relevant subjects.

In this regard, reliance isplaced on para 2 of the Model Educational Loan Scheme of the IndianBanks' Association and the same is extracted hereunder: "2. Objectives of the Scheme: The Educational Loan Scheme outlined below aims atproviding financial support from the banking systemto deserving / meritorious students for pursuinghigher education in India and abroad. The mainemphasis is that every meritorious student thoughpoor is provided with an opportunity to pursue https://hcservices.ecourts.gov.in/hcservices/ education with the financial support from thebanking system with affordable terms and conditions. No deserving student is denied an opportunity topursue higher education for want of financialsupport. "10. The learned counsel for the respondent Bank relied onthe following passage in the circular dated 03.06.2008 of the HeadOffice of the State Bank of Travancore. "Minimum Marks 1. There is no minimum marks for eligibility, provided the applicant has qualified throughentrance test or merit based selectionprocedure.2.A minimum mark of 50% for General and 45% forSC/ST category candidates for qualifyingsubjects in the qualifying exam has been fixedfor students who have not qualified throughEntrance Test (there being no entrance test foradmission).3.Students who have secured admission throughManagement Quota should have obtained theminimum marks as specified in clause 2 above.

"11. The minimum marks prescribed by the Government of TamilNadu for joining B.E. Course are as follows: Open Category-50% Backward Class-45%Most Backward Class-40%SC/ST category-35% The above prescription of marks was from the year 2009-2010. Before2009-2010, the following were the marks prescribed by the Governmentof Tamil Nadu for joining B.E. Course. Open Category-55% Backward Class-50%Most Backward Class-45%SC/ST category-35% 12. In the present case, the petitioner joined the B.E.Course in 2008-2009. He is now studying in the second year course. He has to undergo studies for two more years. The college has giventhe estimated fees structure for the year 2009-2010 in their letter https://hcservices.ecourts.gov.in/hcservices/ dated 21.08.2009 and the same are as follows:S.NoDetails2009-101Tuition fees 62,5002Notebooks, Lab & othercharges7,5003Transport charges11,000Total81,00013.It is also not in dispute that the college where thepetitioner was admitted has been approved by AICTE and has beenaffiliated to Anna University.

The only objection of the respondentis that the petitioner failed to obtain 45% marks for sanctioning ofeducational loan, as the same was the criteria prescribed by its HeadOffice. 14. If the argument of the learned counsel for therespondent Bank is accepted, in Tamil Nadu, except the GeneralCategory students, no other students belonging to SC/ST and MostBackward Class categories admitted in the B.E. Course with less than45% marks, could get educational loan, since the Governmentprescribed 35% marks for admission to SC/ST students, 40% marks foradmission to Most Backward Class students, while 50% marks isprescribed for Open Category. Such a prescription of lower marks forSC/ST students is to achieve the objective of the constitutional goalset out in Article 46 of the Constitution. The very purpose of theeducational loan would get thus defeated. The Union of India camewith the policy of granting educational loan to weaker sections ofthe society in furtherance of Article 46 of the Constitution.

Article46 should be read with Article 21 of the Constitution. One of thefacets of Article 21 of the Constitution is right to education. Inthis regard, Article 46 of the Constitution is extracted hereunder: "46. Promotion of educational and economicinterests of Scheduled Castes, Scheduled Tribes andother weaker sections. - The State shall promotewithin special care the educational and economicinterests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from socialinjustice and all forms of exploitation. "15. The great Tamil Poet Thiruvalluvar highlighted theimportance of education by saying that person, without education, isthe person without eyes. The said Thirukkural is as follows: https://hcservices.ecourts.gov.in/hcservices/ "fz; cilah; vd; gth; fw; nwhh; Kfj;J ,uz;L g[z; cilah; fy; yhjth;. and the English translation is as follows:-Only the learned have their faces adorned by two eyes, For the ignorant, eyes are no more than sores.

" 16. Hence, the respondent Bank cannot cite the circulardated 03.06.2008 of its Head Office as well as the Model EducationalLoan Scheme of the Indian Banks' Association to deny educational loanto the petitioner. If such an attitude was there, evenDr.B.R.Ambedkar could not have gone for higher education. Dr.B.R.Ambedkar obtained only 287 marks out of 750 in the matricexamination. But the King of Baroda was kind enough to extendfinancial assistance to Dr.B.R.Ambedkar. Here, the Union of India hasnow framed a scheme for providing financial assistance to weakersections of the Society for their education. But it is unfortunatethat the respondent Bank is denying the same to the weaker sectionsof the society, citing one reason or the other. 17. This Court in uncertain terms held in the decisionreported in 2010 (6) MLJ 47 that once the eligibility for admissionis established and a candidate is selected through any one of themode of selection, which is permitted by the Monitoring Committee andthe University having approved the admission of the petitioner, it isnot open to the respondent Bank to refuse loan facility viz.,education loan to a deserving candidate like the petitioner.

Paras11, 12 and 13 of the said judgment are extracted hereunder: "11. In the impugned order, the secondrespondent has stated that since the petitioner hassecured admission in management quota and not wentthrough the selection process, the petitioner isnot eligible to get sanction of education loan. Thesaid stand of the respondents is contrary to thescheme announced by the respondents viz., VidyaJyothi Educational Loan Scheme. Though in the saidscheme it is stated that admission could be claimedby writing entrance examination, it is commonknowledge to all concerned that in the state of Tamil Nadu, no entrance examination is conductedfor admission to B.E. Degree course or for anyprofessional course. Admittedly, there are twomodes of admissions to professional course in self- https://hcservices.ecourts.gov.in/hcservices/ financing colleges in the state of Tamil Nadu viz.,Government quota, i.e., candidates are selectedthrough single window selection and managementquota.

The said allocation of seats is alsoapproved every year by the Monitoring Committeeheaded by a retired High Court Judge, constitutedby the State Government as per the Judgment of the Supreme Court in the decision in Islamic Academy of Education v. State of Karnataka AIR 2003 SC 3724 :(2003) 6 SCC 697 and P.A. Inamdar v. State of Maharashtra AIR 2005 SC 3226 : (2005) 6 SCC 537 :(2005) 3 MLJ 158.12.The fact that the petitioner was selectedand admitted in the management quota seat andpursuing his studies cannot be a debarment forsubmitting application to avail education loan. Itis not the case of the respondents that thepetitioner is not eligible to be admitted in theB.E. Degree course due to lack of minimum marks, age or otherwise. Once eligibility for admission isestablished and a candidate is selected through anyone of the mode of selection, which is permitted bythe Monitoring Committee and the University havingapproved the admission of the petitioner, it is notopen to the respondent bank to refuse loan facilityviz., education loan to a deserving candidate likethe petitioner.

The Central Government as well asthe Reserve Bank of India gave guidelines to thebanking sectors to sanction education loan to alldeserving candidates. The requirements, the bankscan insist upon is whether the candidate iseligible to be admitted in the course, whether thecourse is approved by the competent body, andwhether the college is affiliated to the Universitywhich conducts examinations. 13. The Schemes and Policies are framed by the Central Government and the benefit should reach thedeserving persons. Rejecting the claim ofeducation loan to the petitioner by the secondrespondent by raising untenable and hypertechnicalground establishes the mindset of the person, whois in charge of the bank. The Bank is not entitledto take a rigid and hairsplitting interpretation incases like this, without bearing in mind the objectof the Scheme. In all other Banks, education loan https://hcservices.ecourts.gov.in/hcservices/ is sanctioned to students admitted in managementquota.

In some cases, though initially the loanapplications were not considered favourably, onreceiving notice, the concerned banks readilysanctioned loans on the basis of valuable legaladvice given by the standing counsels. If theattitude of the respondent bank is accepted orgiven a seal of approval, it would bediscriminatory and violative of Article 14 of the Constitution of India, which prohibitdiscriminatory treatment to a citizen. The higherofficials of the respondent bank are bound to giveproper instructions to Branch Managers as to howthe applications seeking education loan are to beprocessed, so that such kind of unreasonableattitude can be avoided. "18. This Court in another judgment in W.P.No.33933 of 2007(decided on 16.11.2007) also held that just because the studentfailed in one subject does not mean that he is unqualified to geteducational loan. In the said case, educational loan was declined onthe ground that he was not meritorious.

The aforesaid scheme of the Indian Banks' Association was cited by the respondent Bank to refuseeducational loan. Para 9 of the said judgment is extracted hereunderin this regard. "9. On the face of it one can see that theorder passed by the second respondent is patentlyillegal and against the policy of the Government andit is against the concept of propagating educationamong the students especially to the students whocome from down trodden community. A reference tothe impugned order passed by the second respondentbank which reads as follows: "We refer to the above and informyou that due to poor academic career of thestudent, we are unable to considereducational loan for your son. "makes it very clear that the second respondent haspredetermined the issue even before the petitionerhas chosen to join in his B.E. Degree course. Merely because in his Plus Two (+2) examination hehas failed in one subject does not mean that he isunqualified.

Based on his qualification only the https://hcservices.ecourts.gov.in/hcservices/ authorities competent have admitted him in an Engineering Degree Course and it is not for thesecond respondent to under estimate the quality ofany such candidate. On the other hand, even areference to the guidelines which is stated in thecurrent guidelines shows that the basis of issuanceof guidelines is to encourage education among thestudents and no where it is stated that only brightstudents should alone be given such loans. On theother hand the guidelines show that in the normalcircumstances, while appraising the loan, theprospects of the future income of the student whichhas to be considered and it is also open to the bankto consider the prospects of the parent / guardian. "19. None of the judgments relied on by the learned counselfor the respondent are relating to educational loan and on the otherhand, those judgments relate to commercial transactions.

This Courtas well as the Honourable Apex Court categorically held that incommercial transactions, the jurisdiction of this Court under Article226 of the Constitution is limited and normally this Court could notinterfere in the commercial transactions. Hence, those judgments donot apply to the facts and circumstances of this case. 20. In fact, the judgment of the Honourable Apex Court inSTATE OF TAMIL NADU VS. S.V.BRATHEEP reported in 2004 (2) CTC 227relied on by the learned counsel for the respondent supports the caseof the petitioner. In the said case, the State prescribed highermarks as eligibility for admission in B.E. Course than the marksprescribed by AICTE. This was put to challenge before this Court. Alearned single Judge sustained the order of the Governmentprescribing higher qualification. However, a Division Bench of this Court set aside the order of the learned single Judge. The matter wastaken to the Honourable Apex Court.

The Honourable Apex Court heldthat the State has power to prescribe higher marks as a minimumeligibility criteria for admission in B.E. Course than the marksprescribed by the AICTE. The relevant passage in para 3 of thejudgment in 2004 (2) CTC 227 is extracted hereunder: "3. The learned Single Judge of the High Court, who examined the matter, held that the prescriptionof qualifications or prescription of the minimumeligible marks for SC/ST as mere pass, most backwardat 50% average marks in the related subjects, backward at 55% average marks in the relatedsubjects and other classes at 60% average marks inthe related subjects, would not be in conflict with https://hcservices.ecourts.gov.in/hcservices/ the Regulations of the All India Council for Technical Education (AICTE) and, therefore, dismissed the writ petitions. On appeal, a DivisionBench of the High Court held that there is a glaringdifference in the norms fixed by AICTE and the normsfixed by the State Government, and struck down thesame........." 21.

The aforesaid judgment makes it clear that even at thattime, a mere pass was required for SC/ST students. When the Government prescribed a mere pass for admission to SC/ST students, the Bank cannot deny those students the educational loan citing thatthe SC/ST students failed to get 45% of marks. As stated above, thepetitioner was the first person in his family to enter the collegeeducation. 22. Considering the facts and circumstances of the case, therespondent is directed to sanction educational loan to the petitionerfor his second year B.E. Course, within a period of four weeks fromthe date of receipt of a copy of this order and also sanctioneducational loan for the third and fourth year course respectively. As far as the payment of fees for the second year is concerned, thecollege is directed to reimburse the same to the petitioner onreceipt of the loan being sanctioned by the respondent bank.