Appeal against writ court order dismissing petitioner's prayer for immediate disbursement of full education loan sanctioned for six-year MBBS abroad. Bank director upheld pro-rata basis aligned with RBI principles, finding no error for interference.
Bank director's pro-rata disbursement order upheld; writ appeal dismissed.
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
TUESDAY, THE 11TH DAY OF JANUARY 2022 / 21ST POUSHA, 1943
WA NO. 35 OF 2022
AGAINST THE JUDGMENT IN WP(C) 21235/2021 OF HIGH COURT OF KERALA
APPELLANT/WRIT PETITIONER:
JIMSON TITUS
AGED 20 YEARS, S/O.TITUS, THANNIPPILLY HOUSE,
NADATHARA P.O., MINOR ROAD, PIN - 680 751.
BY ADVS.
SHERRY J. THOMAS
JOEMON ANTONY
RESPONDENTS/RESPONDENTS:
1THE CHIEF MANAGER
BANK OF BARODA, THRISSUR BRANCH,
THIRUVAMBADY DEVASWOM BUILDING, ROUND WEST,
THRISSUR, KERALA - 680 001.
2THE GENERAL MANAGER,
RESERVE BANK OF INDIA, REGIONAL OFFICE,
BANJERI ROAD, ERNAKULAM NORTH, KALOOR,
ERNAKULAM - 682 018.
SRI. NAGARAJ NARAYANAN, SC FOR R1
THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 11.01.2022,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.A.No.35 of 2022
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JUDGMENT
Dated this the 11th day of January, 2022
S.Manikumar, C.J.
Before the writ court, the petitioner/appellant has sought for the following reliefs:
held as under:
“7. The application of the petitioner for educational loan of ₹7,00,000/- was against the total medical course expenses of ₹29,58,036/-, for the period of study of six years. The petitioner would submit that the Tuition Fee
W.A.No.35 of 2022
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for the first year is ₹2.57 lakhs and the petitioner would require another ₹2.85 lakhs for travelling expenses in the First Year itself. The petitioner claims that the respondents shall disburse an amount of ₹5.42 lakhs out of the sanctioned ₹7 lakhs in the First Year itself.
Being aggrieved, instant writ appeal is filed.
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The appellant, along with his parents as co-applicants, applied for Baroda Education loan at 1st respondent Bank for his MBBS in Petro Mohyla Black Sea National University, at Ukraine. The total estimated cost of education is Rs. 29,58,936/-, but the appellant required only Rs.7 lakhs, that too, for the first two years. Subsequent to the interventions of this Hon’ble Court, the 1st respondent sanctioned the education loan of Rs.7 lakhs.
Though the loan is sanctioned, the 1st respondent is not disbursing the amount to the account. They orally intimated that only an amount of Rs. 1.16 lakhs will be disbursed as 1/6th of the total loan amount. The contention of the bank is that the pro-rata basis disbursal is calculated by dividing total amount and actual years of course. Against which, the petitioner preferred a petition to the bank requesting to sanction the 1st year fee amount in accordance with the fees structure of the College (First year Fee amount of Rs. 2.57 lakhs and Rs. 2.85 lakhs as travelling expenses) and also in accordance with the guidelines issued by the Reserve Bank of India.
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The Exhibit P4 guidelines of RBI points out the objectives of the educational loan scheme. It is stated that the object of the scheme itself is to provide financial support from the banking system to meritorious students for pursuing higher education in India and abroad. The guideline Nos. 5.2 and 5.3 dealt with the studies of abroad. The quantum of finance is also mentioned in the above said model scheme. While assessing the quantum of finance, banks should ensure that a student is neither over financed nor under financed. The terms and conditions - No. 28 also confirms that the loan will be disbursed in stages as per the requirement directly to the college. When challenged, the writ court is of the view that the proportionate amount - loan amount/number of years of course can only be disbursed. This is against the guidelines issued by the Reserve Bank of India.
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W.A.No.35 of 2022
5. Clause 5.3 of the guidelines - expenses considered for
loan, reads as under:
“ 5.3. Expenses considered for loan
for pursuing the course in Petro Mohyla Black Sea National
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University at Ukraine is Rs.29.58 lakhs. Appellant has sought for a loan of Rs.7,00,000/-. Expenses claimed as detailed in
paragraph 12 of the counter affidavit is reproduced:
| 1st | 2nd | 3rd | 4th | 5th | 6th | Total | USD/ | AMOUNT | |
|---|---|---|---|---|---|---|---|---|---|
| Year | Year | Year | Year | Year | Year | INR | IN RS. | ||
| TUITION FEE | 3800 | 3800 | 3800 | 4100 | 4100 | 4100 | 23700 | 72.44 | 1716828 |
| ACCOMMODATION | 700 | 700 | 700 | 700 | 700 | 700 | 4200 | 72.44 | 304248 |
| FOOD EXP. | 1500 | 1500 | 1500 | 1500 | 1500 | 1500 | 9000 | 72.44 | 651960 |
| EXPENSES IN INDIA | 285000 | ||||||||
| TOTAL | 2958036 |
paid for the entire period of study on pro-rata basis. Averments in paragraph 8 of the counter affidavit on the said aspect is reproduced:
“8. The averment of the petitioner in paragraph 4 of the writ petition that the calculation for disbursement of loan account on pro-rata basis by the respondent bank is against the principles of justice and guidelines of the RBI is baseless, untenable and devoid of any merit. Pro-rata essentailly translates to “in proportion”, which means a process where whatever is being allocates will be distributed in equal portions for each year. Hence, in the case of the petitioner, an amount of 7 lakhs is sanctioned to the petitioner for the period of study of 6 years, then the proportionate pro-rata basis of loan amount
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disbursement per year to the 1st petitioner will be Rs.1.16 lakhs, per year for the 6 year period.”
“4. 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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under the Scheme.”
Giving due consideration to the material on record, we find no error in the impugned judgment, warranting interference. Accordingly, writ appeal is dismissed.
Pending interlocutory applications, if any, shall stand closed.
Sd/- S.Manikumar Chief Justice
Sd/-
Shaji P.Chaly
Judge
vpv
//true copy//
P.A. to Judge
1 issue framed by the court
Whether the writ court correctly dismissed the petitioner's appeal against the bank director refusing to disburse the entire sanctioned education loan at once.
Colour shows how this judgement treated each authority
W.A.No.1281 of 2021 dated 12.10.2021Referred¶72
Jimson Titus
The Chief Manager, Bank of Baroda
S.Manikumar
Shaji P.Chaly
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court