Allowed

K. Sibi Chakkaravarthy, v. the Managing Director

Madras HC18 Apr 2013WP(MD)/4299/2013

Case brief

AI extract

What is this about?

The petitioner challenged the rejection of his educational loan application by City Union Bank due to his 81% marks. The Court held that the Indian Banks' Association guidelines do not authorize banks to fix arbitrary cut-off marks. Consequently, the impugned rejection order was quashed and remitted for fresh consideration.

What did the court decide?

The impugned order dated 12.03.2013 was quashed and the matter was remitted to the bank for fresh consideration within 15 days.

K. Sibi Chakkaravarthy, Vs the Managing Director — Banking and Recovery | Madras HC (2013)

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED: 18.04.2013

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CORAM:

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THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN

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W.P.(MD)No.4299 of 2013

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K.Sibi Chakkaravarthy ... Petitioner

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Vs.

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1.The Managing Director, City Union Bank Ltd., Kumbakonam, Kumbakonam District. 2.The Branch Managr, City Union Bank Ltd., Kovilpatti Branch, Thoothukudi District. ... Respondents

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PRAYER: Writ Petition is filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus to call for the records relating to the impugned order dated 12.03.2013 passed by the second respondent and quash the same and consequently direct the respondents to sanction Educational loan and disburse the amount as per the bonafide and expenditure certificated dated 23.08.2012 issued by National Engineering College, Kovilpatti.

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For petitioner : Mr.D.Shanmugaraja Sethupathi For R2 : Mr.G.Rajendran

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O R D E R

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This writ petition is directed against the order dated 12.03.2013 on the file of Kovilpatti Branch of City Union Bank Ltd., whereby and where under the application submitted by the petitioner for education loan was rejected on the ground that he acquired only 81% of marks in the core subjects.

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The petitioner is the son of a sales man of a fair price shop. The petitioner got admission for his B.E. Course in National Engineering College, Kovilpatti. Since he was not having financial resources to pay the tuition fees, an application was made before the second respondent to sanction educational loan. The said application was rejected by the bank under the pretext that the petitioner secured only 81% of marks as against the 85% prescribed by the bank. Feeling aggrieved by the said order, the petitioner is before this Court.

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The second respondent filed a counter affidavit indicating https://hcservices.ecourts.gov.in/hcservices/ that the Indian Banks' Association have permitted the concerned bank to fix their own cut off marks based on the employment opportunity and earning potential of the students. According to the second

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respondent, the City Union Bank Ltd., prescribed 85% in core subjects as a cut off mark for considering the application for educational loan. Since the petitioner got only 81%, his application was rejected.

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I have heard the learned counsel for the petitioner and the learned counsel appearing for the second respondent bank.

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The Indian Banks' Association have framed detailed guidelines with respect to grant of educational loan. Earlier, the banks have been rejecting the loan applications on the ground that the students obtained admission under management quota and that they failed to secure the cut off marks. Since the Government of India and the finance ministry received several representations from the students, the Reserve Bank of India intervened in the matter and directed the Indian Banks' Association to frame a revised scheme. The Indian Banks' Association framed a revised scheme and it does not contain any stipulation that the students should obtain a particular percentage of marks so as to enable the bank to consider the application for educational loan. There is no prescription that the bank can prescribe a cut off mark for the core subjects. In fact, the second respondent herein prescribed the cut off mark at 85%. None of the guidelines framed by the Indian Banks' Association gives authority to the bank to fix such an unreasonable percentage as cut off marks. Under the guise of fixing the cut off mark, the bank arbitrarily fix it at 85%.

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In view of the above, there is no justification in rejecting the application submitted by the petitioner for educational loan.

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In the result, the impugned order passed by the second respondent dated 12.03.2013 is quashed and the matter is remitted to the bank for fresh consideration. The second respondent is directed to consider and dispose of the application submitted by the petitioner for educational loan on merits and in accordance with the educational loan scheme framed by the Indian Banks' Association and in the light of the above observation. The said exercise shall be completed within 15 days from the date of receipt of a copy of this order.

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The writ petition is allowed to the extent indicated above. No costs.

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Sd/Assistant Registrar (CO)

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/True Copy/

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Sub Assistant Registrar

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rj2

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1.The Managing Director, https://hcservices.ecourts.gov.in/hcservices/

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City Union Bank Ltd., Kumbakonam, Kumbakonam District.

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2.The Branch Managr, City Union Bank Ltd., Kovilpatti Branch, Thoothukudi District.
+1CC to Mr.G.Rajendran,Advocate in SR.No.22280 +1CC to Mr.D.Shanmugaraja Sethupathi,Advocate in SR.No.22470
W.P.(MD)No.4299 of 2013 18.04.2013
RG.25.04.2013 3P/5C
I.T.

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https://hcservices.ecourts.gov.in/hcservices/

K. Sibi Chakkaravarthy, v. the Managing Director

Case brief

What is this about?

What did the court decide?

K. Sibi Chakkaravarthy, v. the Managing Director

Case brief

What is this about?

What did the court decide?

What the court decided

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