Thumu Venkatanarayana vs State Bank Of India
2022 Latest Caselaw 5038 Tel

            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 -

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

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

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

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

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

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

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

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

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