HON'BLE SRI JUSTICE K. LAKSHMAN
WRIT PETITION No.23240 OF 2021
ORDER:
Heard Mr. P. Ravi Shankar, learned counsel for the petitioner and Mr. Alluri Krishnam Raju, learned counsel for respondents.
2. This writ petition is filed to direct the respondents to disburse the Educational Loan to the petitioner's daughter Account S.B. No.62443153554 as per sanctioned Letter No.RACPC/EL/2328 dated 02.08.2019 kept in Loan Account No.38697205673 (T. Chandrika) without insisting for submission of Land Conversion Certificate in respect of the land admeasuring 866 66 sq. yards, situated in Sy. No.502 in Paloncha Revenue Village in the limits of Paloncha Municipality and Town of Bhadradri - Kothagudem District which was already mortgaged by way of deposit of Title Deeds vide Document No.4227 of 2019 dated 02.08.2019.
3. FACTS OF THE CASE:
i) The wife of the petitioner is the absolute owner and possessor of land admeasuring 866.66 square yards in Survey No.502, situated at Paloncha Municipality and Revenue Mandal, Bhadradri - 2
KL,J W.P. No.23240 of 2021 Kothagudem District. She had purchased the aforesaid property under a registered sale deed bearing document No.600 of 2008, dated 21.02.2008.
ii) The petitioner herein had obtained educational loan by mortgaging the said property to meet the Educational Fee and expenses of his daughter's Engineering Course i.e., B.Tech. He had paid EMIs regularly. His daughter had completed the said Course and she was intending to pursue Higher Studies i.e., M.S., in Computer Sciences in USA. She got admission in Texas A&M University in USA during the academic year 2019. Accordingly, she was directed to join the programme by 01.08.2019.
iii) Therefore the petitioner herein had applied for educational loan on 23.06.2019 by mortgaging the aforesaid property which was already under mortgage with the bank. The same is further extended by way of deposit of title deeds.
iv) The respondent bank had obtained a legal opinion dated 01.06.2019. On satisfying that the petitioner herein had submitted all the documents including mortgage of the said property by way of deposit of title deeds, the bank had sanctioned educational loan vide 3 KL,J W.P. No.23240 of 2021 their letter dated 02.08.2019 sanctioning an amount of Rs.30.00 lakhs. The said sanction letter was issued by respondent No.3, who in turn, requested the petitioner herein to approach the Regional Office of Khammam Branch for the purpose of execution of documents and for disbursement of the loan as per schedule.
v) Respondent No.5 had directed the petitioner herein to produce Land Conversion proof in respect of the aforesaid property. The petitioner herein had applied for certificate of conversion from agriculture to non-agriculture. Due to some unavoidable delay, the Revenue Divisional Officer (RDO) could not issue the said certificate. However, the RDO concerned has sent the file to the Tahsildar by which time there was change of policy. Therefore, the RDO did not pass orders and the petitioner herein had filed a writ petition vide W.P. No.3845 of 2021. This Court directed District Collector to take action within a period of six (06) weeks. Since the said order was not complied with, the petitioner herein has filed Contempt Case vide C.C. No.976 of 2021. However, the said conversion proceedings were issued by the Tahsildar, Paloncha on 21.10.2021. Thus, the respondents though sanctioned the aforesaid amount of Rs.30.00 lakhs towards educational loan, they have not disbursed the same on the 4 KL,J W.P. No.23240 of 2021 ground that the petitioner herein did not produce the conversion proceedings in respect of the aforesaid property from agriculture to non-agriculture (NALA). Therefore, the present writ petition.
4. CONTENTIONS OF THE PETITIONER:
i) It is the specific case of the petitioner that though he has applied for issuance of NALA proceedings, the same was not furnished, therefore, he had to file the above writ petition and the contempt case. However, the Tahsildar, Paloncha had issued the NALA proceedings on 21.10.2021.
ii) According to the petitioner, as per the guidelines issued by the Bank, there is no need to furnish the NALA proceedings. Even basing on the Valuation Report, legal opinion, the respondent bank can disburse the loan. Even then, the respondent bank did not disburse the loan amount though sanctioned.
5. CONTENTIONS OF THE RESPONDENTS:
i) The respondents filed counter affidavit contending that submission of NALA proceedings is must and, therefore, the respondent bank had advised the petitioner to provide either to furnish 5 KL,J W.P. No.23240 of 2021 the said proceedings or to provide alternate security which is a SARFAESI compliance property. The petitioner herein had submitted an undertaking on 30.07.2019 stating that he would produce the NALA proceedings after obtaining from the concerned authority. Even then, the petitioner failed to produce the same.
ii) The respondents bank sanctioned the aforesaid loan anticipating the petitioner would produce the said NALA proceedings at the earliest. Even the bank has completed the documentation formalities on 02.08.2019. The petitioner herein had produced the aforesaid certificate/proceedings after two (02) years i.e., on 29.10.2021. The petitioner could not fulfill the conditions on which the loan was sanctioned. There was a delay of two (02) years. After expiry of six (06) months from the date of sanction, the guidelines do not permit the bank to release the first disbursement.
iii) It is further contended that the sanction of loan and the conditions in regard to security are a matter of policy, and the Bank is guided by the policy decision taken at the Corporate level. To ensure the loan amount can be recovered by legal process, in the event of default, the property is taken as security. If it is an agricultural 6 KL,J W.P. No.23240 of 2021 property, it is exempted from the purview of SARFAESI Act, which is a speedy recovery. Therefore, they are not in a position to disburse the loan to the petitioner.
6. ANALYSIS AND FINDING OF THE COURT:
i) In view of the aforesaid rival submissions, it is not in dispute that the wife of the petitioner is the owner and possessor of the subject property. The respondent bank has obtained legal opinion 01.06.2019 and also Valuation Report 07.06.2019 and on satisfying that there is no title dispute with regard to the same, it had sanctioned the aforesaid educational loan of Rs.30.00 lakhs to the petitioner herein. Accordingly, a sanction letter dated 02.08.2019 was issued to the petitioner herein. According to the respondent bank, the petitioner has to submit NALA proceedings within six (06) months as per the Bank guidelines. Though the petitioner herein had submitted an undertaking dated 30.07.2019 stating that he would submit the NALA proceedings, he failed to do so within the aforesaid period. However, he had submitted the NALA proceedings dated 21.10.2021 i.e., after elapse of two years. Thus, the respondent bank has not disbursed the loan to the petitioner only on the ground that the petitioner herein has 7 KL,J W.P. No.23240 of 2021 not produced the NALA proceedings within the period of six (06) months from the date of sanction of the loan. The apprehension of the respondent bank is that the bank may not in a position to recover the loan by initiating legal process in the event of default, the property is taken as security. If it is an agriculture property, it is exempted from the purview of SARFAESI Act, which is a speedy recovery. Now, the petitioner herein had already submitted the aforesaid NALA proceedings dated 21.10.2021.
ii) In the counter, respondents have stated that the petitioner herein has to submit the aforesaid NALA proceedings within six (06) months. After expiry of six (06) months from the date of sanction, the guidelines do not permit them to release the first disbursement. Therefore, even according to the respondents, the guidelines do not permit the bank to disburse the first installment after expiry of six (06) months. It is relevant to note that it is only a guideline and not a rule or Statute which prohibits the respondent bank to disburse the loan amount, even after expiry of the said six (06) months period.
iii) As stated above, the petitioner herein has specifically explained the reason for the delay caused in furnishing the NALA 8 KL,J W.P. No.23240 of 2021 proceedings. He had also submitted an undertaking to that effect. Though he had applied for NALA proceedings, the revenue authorities have not issued the same, therefore, he had to file a writ petition and contempt case. However, the Tahsildar, Paloncha has issued the NALA proceedings dated 21.10.2021 and the same was submitted to the respondent bank. Thus, the petitioner herein had completed all the formalities. In view of the same, now there is no impediment to respondent bank to disburse the loan. As stated above, the aforesaid six (06) months period is only a guideline and it is not a bar.
iv) In view of the aforesaid circumstances and in view of the fact that the petitioner herein had already furnished the NALA proceedings dated 21.10.2021, this Court is of the considered view that respondent No.5 bank has to disburse the loan to the petitioner herein which was sanctioned vide aforesaid proceedings dated 02.08.2019 without reference to the aforesaid guideline.
v) In this regard, it is relevant to note that the Kerala High Court vide order dated 25.07.2011 in W.P. (C) No.17866 of 2011, considering the Master Circular issued by the SBI with regard to the Education Loan Scheme and also on examination of the facts of the 9 KL,J W.P. No.23240 of 2021 case that the bank had rejected the loan application of the petitioner therein on the ground that the property offered towards collateral security was an agricultural land, directed the respondent bank to sanction education loan to the petitioner therein. A similar view was taken by the Madras High Court in a judgment dated 12.06.2017 in W.P. No.36526 of 2016. In both the said cases, the property was agricultural property, whereas, in the case on hand, it is a non- agricultural property and conversion proceedings were produced with some delay. As stated above, the reasons were explained by the petitioner. Therefore, the petitioner herein stands on a better footing.
vi) It is relevant to note that vide letter dated 13.12.2021, the petitioner had requested the respondent bank to disburse the sanctioned amount and vide letter dated 27.10.2021 respondent No.2 requested respondent No.5 to take steps for sanction of the education loan of the petitioner and ensure to close/withdraw the present writ petition. Viewed from any angle, the petitioner is entitled for disbursement of the loan amount which was sanctioned.
7. CONCLUSION:
In view of the aforesaid facts and circumstances, this Writ Petition is disposed of directing the respondents bank to release the 10 KL,J W.P. No.23240 of 2021 aforesaid sanctioned education loan of Rs.30,00,000/- (Rupees Thirty Lakhs Only) vide letter 02.08.2019 to the petitioner herein without reference to the aforesaid guidelines of the bank. The respondents shall complete the entire process/exercise within a period of four (04) weeks from the date of receipt of copy of this order. However, in the circumstances of the case, there shall be no order as to costs.
As a sequel, the miscellaneous petitions, if any, pending in the writ petition shall stand closed.
_________________ K. LAKSHMAN, J 12th October, 2022 Mgr