Heard the learned counsel for the petitioner and the learned counsel appearing for the respondents.
2. This writ petition has been filed praying for a Writ of Certiorarified Mandamus to call for and quash the proceedings of the first respondent, dated 8.10.2009, and to direct the first respondent to disburse the educational loan sanctioned in favour of the petitioner's son. It has been stated that the petitioner's son, Ramanathan, is pursuing his B.E., Aeronautical Engineering Degree course in Noorul Islam College of Engineering, Thuckalay, in Kanyakumari District,
3. The petitioner had approached the first respondent to avail an educational loan, in favour of his son, to pursue his B.E.Degree course. All the required documents had been enclosed, along with the application. The petitioner had requested for a loan of Rs.4,00,000/-. After the verification of the documents submitted by the petitioner, the first respondent had sanctioned the educational loan and he had further instructed the petitioner to open a savings bank account in the State Bank of India, Palayamkottai, Tirunelveli District.
4. It has also been stated that the first respondent had sanctioned an amount of Rs.3,06,000/- and credited a sum of Rs.59,100, in the savings bank account of the petitioner, on 21.9.2006, towards the first instalment of the loan. The loan amount of RS.3,06,000/- is repayable in 54 equated monthly instalments of Rs.5,280/-, per instalment.
5. It has been further stated that a further sum of Rs.8,000/- and Rs.49,700/-, on 5.1.2007 and 19.6.2007, respectively, had been granted by the first respondent, to pay the college fees and the hostel tution fees. The interest for the loan was being paid by the petitioner, regularly. Thereafter, the petitioner had requested the first respondent, on 25.12.2007, to grant a sum of Rs.10,000/- to remit the hostel fees for the fourth semester, which was due to be paid, on or before 10.1.2008. However, the respondent had evaded the grant of the loan amount stating that the petitioner's son had failed in some subjects, in the examinations conducted during the previous semester. The petitioner has stated that his son has been a good student. However, since he had fallen ill he could not perform well in the examinations conducted during the previous semester. Medical certificates were also available to show that the petitioner's son was unwell. The head of the department concerned and the Principal of the College had also certified. With regard to the conduct, attendance and the performance of the petitioner's son. In such circumstances, the refusal of the first respondent to grant the amount of Rs.10,000/-, being a part of the sanctioned educational loan amount, to the petitioner, is arbitrary and illegal. Therefore, the petitioner has preferred the present writ petition before this Court, under
Article 226 of the Constitution of India.
6. Relying on Clause V of the terms and conditions of the agreement, the learned counsel Mr.K.M.Vijaya Kumar, appearing on behalf of the first and the second respondents, had submitted that the performance of the student should be satisfactory and if the student fails in any one of the examinations conducted by the institution, the Bank concerned would be at liberty to recall the loan amount. Clause V of the agreement reads as follows:
"The Student is expected to take up his studies seriously and shall work hard and try his best to maintain a good academic record and shall intimate to the Bank the results of periodical tests/examinations conducted by the institution. The Student shall not participate in any unlawful activity which will debar him from prosecuting his studies and shall follow all the rules and regulations for the time in force and maintain such dignity and decorum as is expected of the student by the institution. If the performance of the student is not satisfactory or if he fails in any one of the examinations conducted by the institution or if any adverse report in respect of the progress/conduct of the student comes to Bank's knowledge, the Bank will be at liberty to recall the loan amount and the Student and/or the Guardian shall be liable to repay immediately the outstanding due together with interest and other costs." In such circumstances, the first respondent had refused to pay the sum of Rs.10,000/-, as requested by the petitioner.
7. In view of the contentions raised on behalf of the parties concerned and on a perusal of the records available, it is seen that the first respondent had sanctioned the educational loan of Rs.3,06,000/-, in favour of the petitioner's son, to pursue his B.E. Degree course in Aeronautical Engineering. Though a substantial portion of the loan amount had been disbursed, the request of the petitioner for the grant of Rs.10,000/-, on 25.12.2007, for payment of the hostel fees, for the fourth semester of the course, had been refused by the first respondent. The only reason stated in the impugned communication of the first respondent, dated 8.10.2009, is that, since the petitioner's son, Ramanathan, had failed in certain subjects during his engineering degree course, the loan amount could not be paid.
8. Even though it is seen from Clause V of the agreement signed by the petitioner, while availing the educational loan, that if the performance of the student is not satisfactory or if he fails in any one of the examinations conducted by the institution, the Bank will be at liberty to recall the loan amount and the student and the guardian shall be liable to repay, immediately, the outstanding dues, together with interest and other costs, it may not be appropriate for the first respondent to refuse to grant the sanctioned loan amount to the petitioner's son to pursue his B.E. Degree course.
9. It is not in dispute that the petitioner's son belongs to a poor family and that he belongs to an underprivileged class of the society. As such, the refusal of the first respondent to grant a part of the educational loan, which had already been sanctioned by him, for the payment of hostel fees, cannot be said to be proper or correct. Further, a reading of Clause V of the agreement would only show that if the performance of the petitioner is not satisfactory or if he fails, in any one of the examinations conducted by the institution, the Bank will be at liberty to recall the loan amount. However, it is within the discretion of the Bank concerned to do so.
10. Even though it is for the concerned Bank to use its discretion to recall the loan amount, such discretion should be exercised taking into consideration, the various factors, including the economic and social conditions of the student concerned. Further, the petitioner has stated that his son could not perform well, in certain examinations conducted by the College concerned, due to his illness and that sufficient evidence is available in support such a claim. Further, it has also been pointed out that both the head of the department and the Principal of the College have also certified in favour of the student. In such circumstances, the writ petition is allowed and the first respondent is directed to grant the sum of Rs.10,000/-, to the petitioner, as prayed for by him, within a period of four weeks from the date of receipt of a copy of this order. No costs. Consequently, connected M.P. is closed.
csh
1.The Branch Manager, State Bank of India, Palayamkottai, Tirunelveli District.
2.State Bank of India represented by its Regional Manager, Tirunelveli, Tirunelveli District.
3.The Union of India, represented by its Secretary, Ministry of Finance, New Delhi.