Fida Ashraf. K vs State Bank Of India
2021 Latest Caselaw 7008 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                               PRESENT

                 THE HONOURABLE SMT. JUSTICE P.V.ASHA

     MONDAY, THE 01ST DAY OF MARCH 2021 / 10TH PHALGUNA, 1942

                       WP(C).No.1335 OF 2021(N)


PETITIONER:

               FIDA ASHRAF. K
               AGED 21 YEARS
               D/O. ASHRAF.K. KODAMBATTIL (HOUSE), OZHUKKARA,
               MAYANADU (POST), KOZHIKODE DISTRICT, PIN-673 008.
               MBBS STUDENT (SECOND YEAR), AL-AZHAR MEDICAL COLLEGE
               AND SUPER SPECIALTY HOSPITAL, EZHALLOOR (POST)
               THODUPUZHA, IDUKKI 685 605.

               BY ADV. SRI.JESWIN P.VARGHESE

RESPONDENTS:

      1        STATE BANK OF INDIA
               REPRESENTED BY THE REGIONAL MANAGER,
               FRANCIS ROAD, KOZHIKODE 673 001.

      2        THE BRANCH MANAGER,
               STATE BANK OF INDIA, MEDICAL COLLEGE BRANCH, MEDICAL
               COLLEGE (POST), KOZHIKODE 695 001.

      3        THE PRINCIPAL,
               AL-AZHAR MEDICAL COLLEGE AND SUPER SPECIALTY
               HOSPITAL, EZHALLOOR (POST) THODUPUZHA, 685 605.

               BY ADV. SRI.G.G.MANOJ
               BY ADV. SRI.S.SARATH PRASAD

     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
01.03.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C).No.1335 OF 2021(N)

                                    2




                        J U D G M E N T

Petitioner, who is a second year MBBS Student,

is aggrieved by the rejection of her application for

educational loan.

2. It is stated that the petitioner passed SSLC

as well as the Higher Secondary Examination with very

high marks with A+ Grade in all the subjects and

obtained admission for MBBS in the State merit quota

in the 3rd respondent College. As the petitioner's

family found it difficult to remit the fee for the

MBBS course, she submitted Ext.P6 application for

educational loan, with her father as the co-

applicant. In the application property in the name

of her father having an extent of 6.070 Ares along

with the residential house was offered as security.

However the second respondent did not take any

positive action though it was assured that it would

be processed and loan would be sanctioned. The WP(C).No.1335 OF 2021(N)

petitioner points out that it is only because of

Ext.P9 proceedings before the Munsiff Court in

execution proceedings in PLP No.21001 of 2016 that

the respondents did not sanction the loan. It is

stated that the said proceedings relates to a case

where her father stood as a guarantor for a loan

availed by one Smt. Jeeja from Kerala Gramin Bank and

that cannot be a relevant factor or reason for denial

of educational loan.

3. Learned Standing Counsel appearing for

respondents 1 and 2 have filed a statement. It is

stated that on examining the application submitted by

the petitioner it was found that the CIBIL score of

petitioner's father, who is the co-applicant, was

reflected as "Suit filed (Wilful Default)". Relying

on Annexure R1(1) Circular issued by the State Bank

of India it is stated that "if the account Status

for a secured loan/unsecured loan/credit card is

(i)Suit Filed, (ii) Wilful default (iii) Suit filed WP(C).No.1335 OF 2021(N)

(Wilful Default), (iv) Suit Filed & Written-off, (v)

Wilful default & written off or (vi) Suit Filed

(wilful default) and written off, the applicant's

proposal may be rejected. While considering the

application of the petitioner it was found that

father of the petitioner was a CIBIL defaulter on his

account status as it was shown as Suit Filed (Wilful

Default) and therefore the application was rejected.

4. Learned counsel for the petitioner relied on

the judgments of this Court in W.P.(C).No.24763 of

2020, 26953 of 2015 and W.A.No.2325 of 2015 in

support of his contention that the respondent Bank

instead of denying the educational loan arbitrarily,

ought to have sanctioned the same.

5. Having heard the contentions on either side

it is seen that the only ground for not considering

the application for loan in her favour is the account

status of the petitioner's father on the basis of

Ext.P9 where petitioner's father stood as a WP(C).No.1335 OF 2021(N)

guarantor. This Court has in a series of judgments

including W.P.(C).Nos.19248 of 2019, 10968 of 2020,

W.A.No.2325 of 2015, etc., held that poor CIBIL score

cannot be a ground for denying educational loan to a

meritorious student. As held in those cases and also

in the judgment in W.P.(C) No.24763 of 2020, the

criteria based on which the education loan is to be

sanctioned should be the possible earning capacity of

the student depending upon the course which she/he is

pursuing.

6. Ext.P5 scheme for educational loan was

floated by the Indian Bank Association in tune with

the policy decision of the Central Government and in

tune with the guidelines of the Reserve bank of India

for the very purpose of providing financial support

from the banking system to meritorious students for

pursuing higher education in India and aboard. In

Clause 2 of Ext.P5 Scheme emphasis is given to see

that a meritorious student is not loosing the WP(C).No.1335 OF 2021(N)

opportunity to pursue higher education for lack of

financial support. Therefore the Circular Annexure

R1(1) cannot override the provisions contained in the

Model Education Loan Scheme.

7. In the present case petitioner is a student

who got admission to MBBS in the State of Kerala

itself and there cannot be any scope for any doubt

regarding the earning capacity of a student who

passes MBBS. It is clear from the statement filed by

the respondents that they have not considered the

application of the petitioner in tune with the

objects and purposes for which Ext.P4 educational

loan scheme has been floated. Respondents ought to

have seen that petitioner, who is a second year

student, is not loosing her opportunity to continue

and undergo her studies on account of their inaction

on her application. When petitioner has stated that

6.070 Ares of land in the name of her father has

already been offered as security, respondents ought WP(C).No.1335 OF 2021(N)

to have considered the same before rejecting the

application (though no orders of rejection are

issued.)

Respondents 1 and 2 shall therefore reconsider

and process the application of the petitioner having

regard to the purpose for which educational loan has

been floated and to take appropriate action on her

application for sanctioning the loan within a period

of 'two weeks' from the date of receipt of a copy of

the judgment.

The writ petition is disposed of accordingly.

Sd/-

P.V.ASHA, JUDGE AS WP(C).No.1335 OF 2021(N)

APPENDIX PETITIONER'S EXHIBITS:

EXHIBIT P1 A TRUE COPY OF PETITIONER'S SSLC CERTIFICATE DATED 20.04.2015.

EXHIBIT P2 A TRUE COPY OF PETITIONER'S PLUS TWO CERTIFICATE NO. HSE-2/2017/276357 DATED 15.05.2017.

EXHIBIT P3 A TRUE COPY OF ALLOTMENT MEMO FOR MBBS COURSE ISSUED TO THE WRIT PETITIONER DATED 08.07.2019.

EXHIBIT P4 A TRUE COPY OF BONA FIDE CERTIFICATE ISSUED TO PETITIONER BY THE 3RD RESPONDENT DATED 13.10.2020.

EXHIBIT P5 A TRUE COPY OF MODEL EDUCATIONAL LOAN SCHEME PUBLISHED BY INDIAN BANK'S ASSOCIATION.

EXHIBIT P6 A TRUE COPY OF APPLICATION FOR EDUCATIONAL LOAN SUBMITTED BY THE PETITIONER DATED 24.12.2020.

EXHIBIT P7 A TRUE COPY OF LAND TAX RECEIPT FOR 6.070 ARES OF LAND BELONGS TO PETITIONER'S FATHER DATED 21.7.2020.

EXHIBIT P8 A TRUE COPY OF THE AFFIDAVIT SWORN JOINTLY BY THE PETITIONER AND HER FATHER DATED 16.10.2020.

EXHIBIT P9 A TRUE COPY OF E.P. NO. 124/17 IN P.L.P. NO. 21001/2016 BEFORE PRINCIPAL MUNSIFF COURT, KOZHIKODE.

RESPONDENTS' EXHIBITS:

ANN.R1(1) A TRUE COPY OF E-CIRCULAR ISSUED BY THE STATE BANK OF INDIA DEPARTMENT PBU PERSONAL LOANS DATED 17.01.2018, VIDE E-CIRCULAR NUMBER NBG/PBU/PL-

EDUCATION/56/2017-18.