1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED 13.10.2011 CORAM THE HONOURABLE MR. JUSTICE V.RAMASUBRAMANIAN W.P.(MD)Nos.4954 and 4956 of 2011 1. S.Kumar ..Petitioner in W.P.No.4954/2011 2. R.Mohanraj ..Petitioner in W.P.No.4956/2011 Vs 1. The Union of India, represented by Ministry of Finance, through Finance Secretary, Todhi Road, New Delhi. 2. State Bank of India, represented by its Deputy General Manager, Local Head Office, Circletop House, No.16, College Lane, Chennai - 600 006. 3. The Branch Manager, State Bank of India, Ayyampalayam Branch, Dindigul District. ..Respondents in both W.Ps' Prayer in W.P.No.4954 of 2011: Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Mandamus directing the respondents to sanction and disburse the entire loan amount of Rs.4,50,000/- based on the admission letter issued by the IILM "B" School, Chennai, dated 25.10.2010 within the period stipulated by this Court. Prayer in W.P.No.4956 of 2011: Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Mandamus directing the respondents to sanction and disburse the entire loan amount of Rs.4,50,000/- based on the admission letter issued by the IILM "B" School, Chennai, dated 17.04.2010 within the period stipulated by this Court. W.P.No.4954 of 2011 For Petitioner :M/s.C.Asaithambi For Respondent-1:Mr.S.Arunkumar Central Govt.Standing Counsel For Respondent-2:No appearance For Respondent-3:M/s.S.Sethuraman W.P.No.4956 of 2011 For Petitioner :M/s.C.Asaithambi For Respondent-1:Mr.G.Rengarajan Central Govt.Standing Counsel For Respondent-2:No appearance For Respondent-3:M/s.S.Sethuraman https://hcservices.ecourts.gov.in/hcservices/ 2 COMMON ORDER The petitioners have come up with the above Writ Petitions seeking direction to the respondents to sanction and disburse the amount of Rs.4,50,000/- each as educational loan. 2. Heard Mr.C.Asaithambi, learned counsel for the petitioners in both Writ Petitions, Mr.S.Arunkumar, learned Central Government Standing Counsel and Mr.G.Rengarajan, learned Central Government Standing Counsel appeared for the first respondent in above Writ Petitions respectively and Mr.S.Sethuraman, learned counsel appeared for the third respondent/bank in both Writ Petitions. 3. The petitioners have joined the first year M.B.A course in an institution by name IILM Business School said to be a partner institution of Bharathiyar University. The petitioners thereafter made applications for sanction of educational loan to the State Bank of India enclosing the details of fee payable. On the ground that the loan was not sanctioned, the petitioners filed the above Writ Petitions in April 2011. The Writ Petitions were admitted and Rule Nisi wasissued. 4. Today the learned counsel for the bank produced two letters both dated: 25.05.2011 issued by the bank to the petitioners. In the letters, it is stated that the bank had sanctioned a sum of Rs.2,40,000/- each to the petitioners under the State Bank of India Student Loan Scheme. Therefore, the prayer in the Writ Petitions have partly been conceded. 5. However, it appears that the petitioners did not approach the bank to take the loan. The reason is that the bank had sanctioned only a sum of Rs.2,40,000/- to each of them, though their request was for the sanction of Rs.4,50,000/-each. According to the learned counsel for the petitioners, the total amount of fees including tuition fees, University Fees, Examination Fees, Library Fees etc., works out to Rs.4,50,000/- for the entire duration of the course, namely two years. Since the bank had sanctioned only a sum of Rs.2,40,000/-, the petitioners seek the sanction of entire amount of loan. 6. Unfortunately, the petitioners cannot demand by way of loan, whatever is charged by the self=financing institutions. The fees structure of self-financing institutions are regulated by the committees appointed by the State Government. Justice N.V.Balasubramanian(retired) was appointed last year and the Fee Committee had already prescribed a particular amount that could be charged by the self-financing institutions. If an institution demands more amount than what is prescribed by the Committee, it amounts to illegal demand. The Court exercising jurisdiction under Article 226 of Constitution of India cannot issue a Mandamus to a bank to sanction educational loan to the extent of the fee so demanded illegally by an educational institution. To do so would amount to recognition and approving the illegal demand made by the educational institution. 7. For instance, in the case on hand, the institution has charged a sum of Rs.20,000/- per Semester(total Rs.80,000/-) for Wi-fi Usage and Library. It means they have charged Rs.80,000/-for such usage. This has no sanction in law. https://hcservices.ecourts.gov.in/hcservices/ 3 8. The learned counsel for the petitioners relied upon a judgement of the Division Bench in W.A(MD)No.23 of 2011, dated 11.01.2011. The said decision arose out of a case where the bank had sanctioned only a sum of Rs.25,000/- per year towards Mess Fee and a sum of Rs.25,000/- towards Hostel Fee. The Division Bench held that the purpose of sanctioning loan is to encourage persons who are not having the source of income to undergo higher study. Consequently, the Division Bench held that the bank was obliged to sanction the Mess Fee and Hostel Fee as claimed by the petitioners. 9. But a careful reading of the above decision shows that the Division Bench did not lay down as a principle of law that whatever is the amount claimed by the educational institution, the same had to be sanctioned without raising a little finger under protest. That cannot also be the law. More than encouraging students to pursue higher education, such directions only encourage self-financing institutions to charge any amount of fee under different names and also get the same receive the seal of approval from this Court indirectly. This Court cannot be a party to perpetuate an illegality. 10. Therefore, these Writ Petitions are disposed of directing the bank to disburse the amount already sanctioned by them by their letters, dated 25.05.2011 to the petitioners, if they desire to take the said amount. No costs. SD/- Assistant Registrar (RTI) /True copy/ Sub Assistant Registrar(C.S) To 1. The Finance Secretary, Union of India, Ministry of Finance, Todhi Road, New Delhi. 2. The Deputy General Manager, State Bank of India, Local Head Office, Circletop House, No.16, College Lane, Chennai - 600 006. 3. The Branch Manager, State Bank of India, Ayyampalayam Branch, Dindigul District. +2 CC to Mr.C.Asaithambi, Advocate, Sr.NO.35615 vsn W.P(MD)NoS.4954 and 4956 of 2011 13.10.2011 TR :14.10.2011: 3p/6c : IT https://hcservices.ecourts.gov.in/hcservices/