Allowed

The Zonal Manager, Bank of India, v. Devika Soniraj

Kerala HC12 Oct 2021WA/1281/2021

Case brief

AI extract

What is this about?

This appeal against a High Court order directing a public sector bank to disburse an educational loan was allowed. The bank was directed to pay the loan in periodic installments for five years, subject to the student filing an undertaking regarding the repayment schedule.

What did the court decide?

Bank of India directed to disburse loan of Rs. 7 lakhs to respondent's institution in five yearly installments of Rs. 1.4 lakh each, subject to student undertaking.

The Zonal Manager, Bank of India, Vs Devika Soniraj — Service and Employment | Kerala HC (2021)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

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THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

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TUESDAY, THE 12^TH DAY OF OCTOBER 2021 / 20TH ASWINA, 1943

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WA NO. 1281 OF 2021

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AGAINST THE JUDGMENT IN WP(C) 6593/2021 OF HIGH COURT OF KERALA, ERNAKULAM DATED 9.7.2021 APPELLANTS/RESPONDENTS:

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1 THE ZONAL MANAGER, BANK OF INDIA, ZONAL OFFICE, KALOOR TOWERS, K.K.ROAD, KALOOR, KOCHI-682 017.

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2 THE BRANCH MANAGER, BANK OF INDIA, PARUR MAIN ROAD BRANCH, NORTH PARUR, PIN-683 513.

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BY ADVS. K.M.ANEESH ADARSH KUMAR K.SANTHOSH KUMAR (KALIYANAM) BIJU VARGHESE ABRAHAM DILEEP CHANDRAN SHASHANK DEVAN

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RESPONDENT/PETITIONER:

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DEVIKA SONIRAJ, AGED 21 YEARS D/O.SONIRAJ, VATTATHERY HOUSE, PALLIPORT P.O., ERNAKULAM-683 515.

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BY ADVS. REJI MATHEW.M M.K.MEHRUNISHA BASIMA MATHEW VARGHESE

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 12.10.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.A.1281/2021

J U D G M E N T

Dated this the 12^th day of October, 2021

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S. Manikumar, CJ.

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On 5.10.2021, we passed the following order:

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"Being aggrieved by the directions issued in W.P.(C).No.6593 of 2021 dated 09.07.2021, bank has filed this appeal. Notwithstanding the challenge, Mr. Anish K.M., learned Counsel for the bank submitted that the appellant bank is ready to disburse the loan amount sought for, for the completion of the BAMS course, which has a duration of 5½ years, provided the respondent student makes necessary arrangements to safeguard repayment of loan amount, as per the terms and conditions of the scheme framed by the Association of Banks. He further submitted that the tuition fee for the first year BAMS course has already been paid by the

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respondent/student.

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Particulars	Year 1	Year 2	Year 3	Year 4	Year 5	Total
Tuition fees	199415	199415	199415	199415	199415	997075.00
Exam fees	0	0	0	0	0
Books stationery	0	0	0	0	0
Equipment /Computer	0	0	0	0	0
Hostel Expenses	48000	48000	48000	48000	48000	24000.00
Sundries Travel	79050	79050	79050	79050	79050	395250.00
Total	326465	326465	326465	326465	326465	1632325.00
Own Source/ Scholarship	186465	186465	186465	186465	186465	932325.00
Loan required	140000	140000	140000	140000	140000	700000.00

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W.A.1281/2021

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From the details submitted by the respondent/student, it could be deduced that the duration of the course is 5½ years and that the respondent/student requires a sum of Rs.1,40,000/- (Rupees One Lakh Forty Thousand only) per year towards the tuition and other fees. Thus, a sum of Rs.7 lakhs has been shown as the requirement from the bank to be paid as tuition fees for the said course.

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Though, Mr. Reji Mathew, learned Counsel for the respondent/student has prayed for immediate release of the entire loan amount, from the data furnished, i.e., source of finance is only a sum of Rs.1,40,000/- per year from the bank, spreading over five years from the first year onwards.

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Now, that the respondent/student has already paid the tuition fee for the first year, notwithstanding the payment already made, considering the financial circumstances of the respondent as on today, the object and scheme of the educational loan to meritorious students, it is desirable that the appellant bank provides educational loan to the extent requested, namely; 7.5 lakhs, to ensure periodical payment towards tuition fees every year.

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In such view of the matter, bank is directed to pay the entire loan amount of 7.5 lakhs to the respondent/student, subject to an affidavit of undertaking to be filed by the respondent/student, as regards the repayment schedule, as provided in Clause 12 of the Model Educational Loan Scheme for Pursuing Higher Education in India and Abroad, 2021. For brevity, Clause 12 of the Scheme which deals with repayment is reproduced as follows:

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“12. REPAYMENT

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Repayment Holiday/Moratorium: Course period

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- 1 year.

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W.A.1281/2021

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 Repayment of the loan will be in equated monthly instalments for a period of 15 years for all categories (excluding course and moratorium period).

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While EMI based repayment is the generally accepted practice, many times the salary levels at the start of the career may not facilitate comfortable payment of salary level at the start of the career may not facilitate comfortable payment of EMI in certain cases (e.g. professionals like Doctors). Telescoping of repayment with stepped up instalments with passage of time may be considered in such cases.”

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On the apprehension that failure to repay any term of the Scheme on likelihood of discontinuation of the course, Clause 14 of the said Scheme provides for follow up/monitoring, which reads thus:-

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“14. FOLLOW UP/MONITORING

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Students to submit progress report at regular intervals. In case of studies abroad, student to submit the Social Security Number (SSN) / Unique Identification Number (UIN) / Identity Card and banks to note the same in records. The Aadhaar number issued by UIDAI may also be captured in bank's system as and when available.

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Student to submit the employment details after the completion of the course.”

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In the light of what we have considered and observed, it is now for the respondent/student to file an affidavit of undertaking regarding the repayment of loan.

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Post on 12.10.2021, for filing of affidavit."

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W.A.1281/2021

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Respondent, Devika Soniraj, D/o. Soniraj has filed an affidavit dated 9.10.2021, which reads thus:

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“2. I am a bonafide student studying for second year BAMS course in Poomulli Neelakandan Namboothiripad Memmorial Ayurveda Medical College, Shornur, Cheruhuruthy, Thrissur. I belong to Ezhava Community and secured admission in the merit quota. I secured All India Rank No. 154383 in NEET(UG) 2019 Entrance Examination. My family is engaged in the business of Ayurveda Medicines and the selection of this course is very much related to my taste as well as passion in the ayurvedic field, expecting a success in the career as an Ayurvedic Doctor. I have to pay a sum of Rs. 16,32,325/-(Rupees Sixteen Lakhs Thirty two Thousand Three Hundred and Twenty Five only) as the course fee and other charges for the entire period of five years to the college. Since, I have no other means to raise and mobilize the full amount for the fees to be paid to the college, I submitted the loan application on 19/08/2020 to the Bank of India, Main Road Branch, Parur for an educational loan for Rs. 7,00,000/ (Rupees Seven Lakhs only) under BOI Star Education Loan Scheme to tide over the situation. But the loan application was rejected by the bank on 21.01.21

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Against the order of rejection of loan, I filed WP(C) 6593/2021 before this Hon'ble Court. The Hon'ble Court as per Judgment dated 09/07/2021 was pleased to direct the bank to disburse the loan applied by me forthwith. The Bank challenged the said order by filing WA 1281/2021 before this Hon'ble Court. This Hon'ble Court while considering the Writ Appeal was pleased to pass an order directing the bank to pay the entire loan amount of 7.5 lakhs to me subject to filing an affidavit of of undertaking to be filed by me as regards the repayment schedule as provided in

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W.A.1281/2021

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clause 12 of the Model Educational Loan Scheme for pursuing Higher Education in India and Abroad 2021.

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In compliance with the order of this Hon'ble Court, I humbly undertake and submit as follows:

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a. I hereby undertake that I shall start repayment of the Loan immediately after the Holiday/ Moratorium,that is, Course period plus one year.

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b. I shall repay the loan amount in equated monthly instalments in 15 years of period as stipulated in the Scheme with liberty to foreclose the loan in the event of improvement of the financial position.

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c. I undertake that I shall submit the progress report at regular interval as required by clause 14 of the Scheme.

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d. I also undertake that I shall submit the employment details after the completion of the course as stipulated in the Scheme.”

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In continuation of the order dated 5.10.2021, we direct the Bank of India to disburse a sum of Rs.7,00,000/- as claimed in her application, to the respondent. First year fee has already been paid by the student/respondent. Nevertheless, as per the request, source of finance by the Bank, should be periodical, spreading over five years.

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As the first year fee has already been paid by the student, appellant/Bank is directed to pay Rs.1,40,000/- to the respondent/student, within ten days from the date of receipt of a copy of this judgment.

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As fee for the second years is due, bank is directed to disburse

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W.A.1281/2021

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the second year fee/second instalment of loan of Rs.1,40,000/- to the educational institution/Poomulli Neelakandan Namboothiripad Memorial Ayurveda Medical College, Shornur, immediately. Rest of the loan amount shall be remitted to the above institution as per the schedule, namely 3^rd year-Rs.1,40,000/-, 4^th year-Rs.1,40,000/-, 5^th year-Rs.1,40,000/-.

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It is made clear that the affidavit of undertaking dated 9.10.2021 regarding repayment should be complied with, without any fail. In the event of any failure to comply with the undertaking in letter and spirit, the appellant Bank is at liberty to take appropriate action under the Scheme.

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Writ appeal is disposed of accordingly.

Sd/S. Manikumar,

Chief Justice

Sd/Shaji P. Chaly,

sou.

The Zonal Manager, Bank of India, v. Devika Soniraj

Case brief

What is this about?

What did the court decide?

The Zonal Manager, Bank of India, v. Devika Soniraj

Case brief

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What did the court decide?

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