IN THE HIGH COURT OF JUDICATAURE AT MADRAS DATED 10.12.2011 CORAM THE HONOURABLE MR. JUSTICE D.HARIPARANTHAMAN W.P.No.9794 of 2011 V.Dinesh .. Petitioner Vs. Punjab National Bank Rep. By its Manager, Ulundurpet, Villupuram District. .. Respondent Writ petition filed under Article 226 of the Constitution of India for issuance of Writ of Certiorarified Mandamus after calling for the records from the respondent relating to the letter dated 2.6.2010 bearing reference No.Nil and all connected documents/decisions refusing to consider petitioners application for Educational loan and quash the same as illegal and arbitrary and consequently direct the respondent to consider the petitioner's loan application for pursuing MBBS Course in the Vinayaka Mission's Medical College, Vinayaka Missions University 2009-2010 batch and release the loan amount. For Petitioner : Mr.R.Mahadevan For Respondent : Mr.Rajasekar for Mr.Gokul Krishnan O R D E R The petitioner filed the present writ petition to quash the order dated 2.6.2010 of the respondent and for a direction to consider the educational loan application for pursuing MBBS Course in Vinayaka Mission's Medical College, Vinayaka Missions University from 2009-2010 onwards. 2.The petitioner passed the Higher Secondary Course in March 2009. He secured admission in MBBS Course during the academic year 2009-2010 in Vinayaka Mission's Medical College, Vinayaka Missions University at Karaikal, Pondicherry State. The duration of the MBBS course is five years. The tuition fees, other fees and hostel fees for 5 years prescribed by the Vinayaka Mission's Medical College are as follows: https://hcservices.ecourts.gov.in/hcservices/ "The provisional fee structure of the duration of the course is given below. INTALLME NT TUITION FEES Rs. OTHER FEES Rs. HOSTEL FEES Rs. TOTAL FEES Rs. FIRST 3,50,000 /- 62,500/- 25,000/- 4,37,550/- SECOND 3,50,000 /- 19,000/- 25,000/- 3,94,000/- THIRD 3,50,000/ - 19,000/- 25,000/- 3,94,000/- FOURTH 3,50,000/ - 19,000/- 25,000/- 3,94,000/- FIFTH 3,50,000/ - 19,000/- 25,000/- 3,94,000/- 3.The petitioner hails from a poor family. He belongs to Most Backward Class. The petitioner applied for educational loan from the respondent Bank on 1.2.2010 for Rs.18,88,500/- for five years. 4.The application of the petitioner was rejected by the respondent Bank by an order dated 2.6.2010 on the ground that the Vinayaka Missions University, where the petitioner is studying, is under crack down by the Central Government and therefore, extending new educational loans to the students in the said University has been kept in abeyance and therefore, the respondent Bank is unable to consider the request of the petitioner. Challenging the aforesaid order, the petitioner has approached this Court. 5.The respondent filed a counter affidavit reiterating their position as was stated in the impugned order dated 2.6.2010. 6.The learned counsel for the petitioner submits that the students belonging to earlier batches of Vinayaka Missions University are given educational loan by the respondent Bank and the educational loan is continued in respect of them. It is further submitted that as on today, pursuant to the order dated 25.01.2010 of the Apex Court in Writ Petition (Civil)No.142 0f 2006, granting status quo, the Vinayaka Missions University continues to be a Deemed University. Even if, the University loses its Deemed University character, the students who were admitted could be protected by treating the institution as a College and getting it affiliated with same University. Therefore, the educational loan shall not be deprived to the petitioner particularly when status quo is granted by the Apex Court in the order dated 21.12.2010 in Writ Petition (Civil)No.142 0f 2006. https://hcservices.ecourts.gov.in/hcservices/ 7.The learned counsel for the petitioner further submits that the petitioner is willing to comply with any condition for grant of loan that could be imposed by the respondent Bank according to the rules. 8.It is further submitted that the mother of the petitioner is a Secondary Grade Teacher in Primary School at Sengurichi at Tirunavalur Panchayat Union in Villupuram District and she also would stand as guarantor apart from satisfying other conditions, for granting loan. 9.On the other hand, the learned counsel for the respondent Bank submits that since there was crack down by the Central Government on 44 Deemed Universities, of which Vinayaka Missions Univeristy is one, the Head Office of the respondent Bank has taken a decision that they would not extend any new educational loan to the students of those 44 Deemed Universities which are under crack down by the Central Government and the same was followed by all the Branches including the respondent Branch. The decision of the Head Office was communicated to branches in the Circular dated 1.2.2010. The respondent has, therefore declined the request of the petitioner by the impugned order dated 2.6.2010. 10.I have considered the submissions made on either side. 11.The petitioner joined MBBS Course during the year 2009-2010 and the duration of the course is five years. The petitioner has to incur the expenditure of Rs.18,88,550/- towards tuition fees, hostel fees and other fees for completing the MBBS Course. The details of the fees structure furnished by the Vinayaka Mission's University is enclosed at page 17 of the typed set of papers filed along with the writ petition and the same is extracted above in paragraph two of this order. 12.It is true that the Central Government has taken certain action against 44 Deemed Universities and Vinayaka Missions University is one among them. The Vinayaka Missions University has retained its status as Deemed University as on to-day under the University Grants Commission Act and the same would be finally decided by the Apex Court in Writ Petition(Civil)No.142 of 2006. The Apex Court passed an interim order dated 25.1.2010 stating that Status quo shall be maintained during the interregnum period as far as the 44 Universities are concerned including the Vinayaka Missions University. 13.When I directed the learned counsel for the Medical Council to find out the status as to whether any action has been taken by them and the stage of the case which is pending before the Apex Court, the learned counsel for the Medical Council has produced the order dated 25.1.2010 of the Apex Court in W.P.No.142 of 2006. The order dated 25.1.2010 grants Status quo during the interregnum period and the matter is under consideration by the Apex Court and https://hcservices.ecourts.gov.in/hcservices/ hence, as on today, the status of the Vinayaka Missions University continues as Deemed University. 14.The learned counsel for the respondent submits that the students belonging to earlier batches of the Vinayaka Missions University are granted educational loan and the loan is continued in respect of those students but, new loan alone is not sanctioned due to crack down action taken by the Central Government. 15.In my view, when the respondent Bank extends the benefits of educational loan to other students who are pursuing their MBBS Course in Vinayaka Missions University, they cannot refuse to extend the same facilities to the petitioner alone on the ground that there was a crack down by the Central Government on Vinayaka Missions University along with other Deemed Universities. If the petitioner is deprived of educational loan while others are granted, the same amounts to discriminatory and arbitrary action on the part of the respondent Bank. 16.Even if, the Deemed Universities could loose their status as Deemed Universities pursuant to the action taken by the Central Government referred to above, the students who are already admitted in the interregnum period could not be left in lurch, as their education would suffer, for no fault of them. 17.Hence, I am of the view that the petitioner cannot be denied educational loan on the ground that the University where he is studying is under crack down by the Central Government. At this juncture, it is relevant to extract the impugned order dated 02.06.2010 and the same is extracted hereunder: "As already appraised to you we are to state that as per HO guidelines dt.01.02.2010 the above University is under create down by Govt. and as extending New Educational Loans has been kept in abeyance, we are unable for consider your proposal at present. As per your oral request of date we are returning the papers provided to us for consideration". 18.As per the counter filed by the respondent, the impugned order was passed pursuant to the Circular dated 1.2.200 of the Head Office. 19.The aforesaid decision of the Head Office and the consequential decision of the respondent Bank refusing to extend the benefit of educational loan to the petitioner is not fair and reasonable, particularly when others are given loan by the respondent Bank. 20.At this juncture, it is relevant to refer to the instruction governing the payment of educational loan issued by the Government of India, Ministry of Human Resource Development, https://hcservices.ecourts.gov.in/hcservices/ Department of Higher Education which is enclosed in typed set of papers at page Nos.7 to 11 and the relevant portion of the same is extracted hereunder: Security Upto Rs.4.00 lacs: Co-Obligation of Parents. No Security Above Rs.4.00 lacs and Upto Rs.7.5 lacs: Co-Obligation of Parents together with collateral security in the form of suitable 3rd party guarantee acceptable to the Bank Above Rs.7.5 lacs: Co-Obligation of Parents. Collateral Security of suitable value along with Assignment of future income of the student for payment of installments. The Security can be in the form of land/building/Govt. Securities/Public Sector Bonds/Units of UTI, NSC, KVP, LIC Policy, Gold, Shares/Mutual Funds/Debentures, Bank Deposit in the name of the student parent/guardian or any other third party with suitable Margin". 21.The educational loan in this case is beyond Rs.4,00,000/- and therefore, the security should be furnished as demanded by the respondent Bank, as per the Clause relating to the security as per the instructions of the Government of India, Ministry of Human Resource Development, Department of Higher Education, 22.The learned counsel for the petitioner submits that the petitioner is willing to comply with the aforesaid condition relating to security and also submits that the mother of the petitioner who is a Government employee is also willing to stand as a guarantor. Thus, the interest of the Bank is well secured. Taking into account the submissions made by the learned counsel for the petitioner that the petitioner is willing to provide security as required by the Bank as per the instructions relating to payment of education loan, I am inclined to allow this writ petition by quashing the impugned order dated 2.06.2010. 23.The respondent Bank is hereby directed to consider the application of the petitioner for granting educational loan based on the aforesaid observations and to sanction the same if the petitioner complies with the requirement of the Bank with regard to the security as required by the respondent Bank. The respondent Bank is further directed to complete the above said exercise within a period of four weeks from the date of receipt of a copy of this order. https://hcservices.ecourts.gov.in/hcservices/ 24.The writ petition stands disposed of on the above terms. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar cla To The Manager, Punjab National Bank Ulundurpet, Villupuram District. 1 CC to Mr.V.P.Raman, Advocate, SR.75887 1 CC to Mr.S.Saravana Kumar, Advocate, SR.75507 1 CC to Mr.K.Rajasekaran, Advocate, SR.75588 W.P.No.9794 of 2011 GV(CO) SRA(19/12/2011) https://hcservices.ecourts.gov.in/hcservices/