Allowed

Nida Ahmed Ali Sayyad v. the Union of India through Finance Department and Others

Bombay HC11 Mar 2024WP/434/2024

Case brief

AI extract

What is this about?

The High Court allowed a writ petition against a bank's rejection of an education loan application. Finding that no dues certificates negated adverse credit history, the court directed the bank to reconsider the application with the petitioner and co-applicant Taffazul Khan Pathan.

What did the court decide?

The petition was allowed; the respondent bank was directed to consider the petitioner's education loan application along with the co-applicant Taffazul Khan Pathan for sanction if no other legal imped

Nida Ahmed Ali Sayyad Vs the Union of India through… — Banking and Recovery | Bombay HC (2024)

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WP-434-2024.odt

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2024:BHC-AUG:5940-DB

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD

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WRIT PETITION NO. 434 OF 2024

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Nida Ahmed Ali Sayyad

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...Petitioner

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Versus

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The Union of India and Others

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...Respondents

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...

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Mr. B. R. Kedar, Advocate for the Petitioner
Mr. S. W. Munde, Advocate for Respondent Nos. 1, 3 to 5
...

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CORAM:RAVINDRA V. GHUGE &
R. M. JOSHI, JJ
DATE:MARCH 11, 2024

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ORDER (PER R. M. JOSHI, J)

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1.The Petitioner seeks to challenge the impugned
communication dated 27.07.2023 issued by Respondent No.
5 with further direction to restore proposal of the
Education Loan to its original stage.

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2.This Petition came to be filed in the backdrop
of following facts:

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Petitioner has applied for the Education Loan

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for Rs. 3,73,000/- from Respondent No. 5, a
Nationalized Bank. Since Petitioner’s parents come from
economically weaker section, they are not in a position
to bear her educational expenses. She, therefore,

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Page 1 of 5

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WP-434-2024.odt

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approached Respondent No. 5 – Bank for Education Loan,
but the same was not sanctioned. The Petitioner was

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asked to join her father as co-applicant, however, the
application was not considered by the Bank for the
reason that he has no good credit history. With regard
to loan application, Petitioner has made several
communications with Respondent No. 5 – Bank. Later on,
due to the insistence of Bank to change co-applicant,
Taffazul Khan Pathan became co-applicant. However, the
Bank did not accept him as co-applicant on the ground
that he has adverse credit history.

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3.Learned Counsel for the Petitioner submits

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that the Respondent – Bank on technicalities is not
considering the application for loan made by the
Petitioner. It is his submission that the Bank has
failed to consider no dues certificate issued in favour
of co-applicant from Berar Finance Limited as well as
The Chitnavispura Sahakari Bank Ltd, Narsala. Thus, it
is his submission that the Bank cannot be allowed to
refuse entertainment of the application of the
Petitioner, by taking shelter of the circular, which is
contrary to the scheme. It is contended that for any

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Page 2 of 5

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WP-434-2024.odt

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educational loan up to Rs. 4 lacs no security is
required and in complete ignorance of these facts and
policy, the loan application is not entertained.

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4.Respondent No. 5 by filing affidavit-in-reply
of Prafulla Kishor Khond, Senior Manager, Union Bank of
India, Bhusawal Branch opposed Petition. In the said
reply, the master circular issued by the Bank dated
09.12.2022 is relied. It is the case of the Bank that
the co-applicant has adverse credit history and as
such, there is no error committed by the bank in not
considering the request of the Petitioner for education
loan as the loan application carries such a co-
applicant.

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5.There cannot be any dispute with regard to the
facts that by its nature the education loan cannot be
equated with any other loan. Whole purpose of the
education loan is to extend help/assistance to a
student who would be deprived of right to education,
for want of adequate finances. It is with the aid of
loan availed from the financial/banking institutions,
education can be pursued. This intention of scheme of
education loan gets further strengthened with the fact

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Page 3 of 5

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WP-434-2024.odt

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that up to Rs. 4,00,000/-, no surety is required to be

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furnished for obtaining loan. As per scheme,
eligibility criteria for a co-applicant is that
he/she shall not have any adverse credit history.

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6.As far as facts in the present case are
concerned, Petitioner has placed on record documentary
evidence indicating that the co-applicant has been
issued no dues certificate by respective financial
institutions from whom he had obtained loan. Thus,
there is sufficient evidence on record to indicate that
the co-applicant is not defaulter. The adverse credit
history is not specified as to how many defaults in
repayment of installments would be considered as
adverse. There is nothing on record to indicate the
number of defaults caused by co-applicant to pay his
other loan installments. In any event, with issuance of
no dues certificates in his favour, he cannot be said
to be a person with adverse credit history. Thus, we do
not find any justification in Respondent No. 5 – Bank
in not considering him as co-applicant.

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7.In the aforesaid circumstances, this Writ
Petition is allowed in terms of prayer clause ‘B’. The

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Page 4 of 5

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WP-434-2024.odt

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application for education loan made by the Petitioner
along with co-applicant - Taffazul Khan Pathan be
considered by Respondent No. 5 and loan as sought by
the Petitioner be considered for sanction, if there is
no other legal impediment in doing so.

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(R. M. JOSHI, J) (RAVINDRA V. GHUGE, J)

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Malani

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Page 5 of 5

Nida Ahmed Ali Sayyad v. the Union of India through Finance Department and Others

Case brief

What is this about?

What did the court decide?

Nida Ahmed Ali Sayyad v. the Union of India through Finance Department and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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