IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 16/09/2010 CORAM THE HONOURABLE MR.JUSTICE D.HARIPARANTHAMAN W.P.NO.556 OF 2010 S.Maran ... Petitioner Versus The Branch Manager State Bank of Travancore Tiruvallur Salai, Panneer Nagar, Mugappair, Chennai – 600 037. ... Respondent PRAYER: Writ petition filed under Article 226 of the Constitution of India praying for the issuance of writ of mandamus, to direct the respondent to sanction educational loan to the petitioner. For Petitioner : Mr.C.Prakasam For Respondent : Mr.K.Sankaran O R D E R The petitioner belongs to Scheduled Caste. He passed Higher Secondary examinations in March 2008 and secured the following marks out of 200 in each subject: Tamil - 129 English - 136 Physics - 87 Chemistry - 91 Biology - 118 Mathematics - 72 He joined B.E. (Computer Science) course in S.K.R. Engineering College, Agarmel, Poonamallee during 2008-2009. The course is of four years duration. He is the first person in his family to enter the portals of college education. According to him, he was not aware of the financial assistance being given by the Nationalized Banks. With great difficulty, he managed to pay the fees for the first year. https://hcservices.ecourts.gov.in/hcservices/ On knowing that the Union of India has instructed the Banks to provide financial assistance for the purpose of education, he made an application to the respondent on 07.09.2009 seeking educational loan under the Gyan Jyothi Educational Loan Scheme. Thereafter, he visited the respondent Bank frequently. But there was no response from the respondent. It is stated that the petitioner issued legal notice to the respondent Bank and the same was of no use to him. The petitioner further stated that since the loan was not sanctioned, he was not able to pay the fees for the second year course. If he failed to pay the fees, he could not be permitted in the college and ultimately, he could not write the examinations. Therefore, he was forced to borrow money outside and paid the fees for the second year course. 2.The petitioner has now come up with the present writ petition seeking for a direction to the respondent to sanction educational loan to him. 3.Notice was ordered by this Court on 12.01.2010. 4.Heard Mr.C.Prakasam, learned counsel for the petitioner and Mr.Sankaran, learned counsel for the respondent. 5.The respondent filed counter affidavit. It is pleaded in the counter affidavit that the Gyan Jyothi Educational Loan Scheme provides for eligibility criteria for granting educational loan. As per the eligibility criteria, minimum marks of 50% for General Category and 45% for SC/ST category has been prescribed for sanctioning of educational loan. Since the petitioner failed to fulfill the eligibility criteria, he was not sanctioned loan. 6.The learned counsel for the petitioner submitted that the respondent ought to have sanctioned loan. It is also submitted that the respondent did not pass any order either sanctioning the loan or refusing to grant loan. The respondent could not prescribe 45% marks for SC/ST students as eligible criteria to obtain educational loan, when both the AICTE and the Tamil Nadu Government prescribed a mere pass for SC/ST students for admission to B.E. Course. 7.The learned counsel for the petitioner also relied on the following decisions of this Court in support of his submission: 1)Minor D.Iniyan Gowtham, Rep. by his father and Natural Guardian R.Dhavamani Vs. The Union of India, Rep. by its Secretary, Finance Department, New Delhi and another in W.P.No.33933 of 2007 (decided on 16.11.2007) 2)S.Saran Kumar Vs. Regional Manager, Karur Vysya Bank https://hcservices.ecourts.gov.in/hcservices/ reported in 2010 (6) MLJ 47 8.On the other hand, the learned counsel for the respondent Bank submitted that the loan was not sanctioned to the petitioner as he did not obtain 45% of marks as required for sanctioning the loan. It is further submitted that the respondent Bank is bound by the Model Educational Loan Scheme of Indian Banks' Association and also the circular dated 03.06.2008 of the Head Office of the State Bank of Travancore. According to the learned counsel, the Model Educational Loan Scheme of Indian Banks' Association contemplates sanctioning of loan only for meritorious students. Since the petitioner is not a meritorious student, he is not eligible for loan. The learned counsel for the respondent Bank also submitted that the circular dated 03.06.2008 of the Head Office of the State Bank of Travancore prescribed 45% of marks for SC/ST category candidates to sanction the educational loan. In support of his contention, the learned counsel relied on the following judgments: 1)Raunaq International Ltd., Vs. I.V.R. Construction Ltd., and others reported in AIR 1999 SC 393 2)Tamil Nadu Industrial Investment Corporation Ltd., Vs. Millenium Business Solutions Pvt. Ltd., reported in 2004 (5) CTC 689 3)Dhampur Sugar (Kashipur) Ltd., Vs. State of Uttaranchal reported in 2007 (8) SCC 418 4)Deen Dayal Medical & Educational Trust Vs. Housing and Urban Development Corporation reported in AIR 2009 MADRAS 81 9.I have considered the submissions made on either side. According to the learned counsel for the respondent, educational loan was not sanctioned to the petitioner as the petitioner did not obtain 45% of marks in the relevant subjects. In this regard, reliance is placed on para 2 of the Model Educational Loan Scheme of the Indian Banks' Association and the same is extracted hereunder: "2.Objectives of the Scheme: The Educational Loan Scheme outlined below aims at providing financial support from the banking system to deserving / meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student though poor is provided with an opportunity to pursue https://hcservices.ecourts.gov.in/hcservices/ education with the financial support from the banking system with affordable terms and conditions. No deserving student is denied an opportunity to pursue higher education for want of financial support." 10.The learned counsel for the respondent Bank relied on the following passage in the circular dated 03.06.2008 of the Head Office of the State Bank of Travancore. "Minimum Marks 1.There is no minimum marks for eligibility, provided the applicant has qualified through entrance test or merit based selection procedure. 2.A minimum mark of 50% for General and 45% for SC/ST category candidates for qualifying subjects in the qualifying exam has been fixed for students who have not qualified through Entrance Test (there being no entrance test for admission). 3.Students who have secured admission through Management Quota should have obtained the minimum marks as specified in clause 2 above." 11.The minimum marks prescribed by the Government of Tamil Nadu for joining B.E. Course are as follows: Open Category - 50% Backward Class - 45% Most Backward Class - 40% SC/ST category - 35% The above prescription of marks was from the year 2009-2010. Before 2009-2010, the following were the marks prescribed by the Government of Tamil Nadu for joining B.E. Course. Open Category - 55% Backward Class - 50% Most Backward Class - 45% SC/ST category - 35% 12.In the present case, the petitioner joined the B.E. Course in 2008-2009. He is now studying in the second year course. He has to undergo studies for two more years. The college has given the estimated fees structure for the year 2009-2010 in their letter https://hcservices.ecourts.gov.in/hcservices/ dated 21.08.2009 and the same are as follows: S.No Details 2009-10 1 Tuition fees 62,500 2 Notebooks, Lab & other charges 7,500 3 Transport charges 11,000 Total 81,000 13.It is also not in dispute that the college where the petitioner was admitted has been approved by AICTE and has been affiliated to Anna University. The only objection of the respondent is that the petitioner failed to obtain 45% marks for sanctioning of educational loan, as the same was the criteria prescribed by its Head Office. 14.If the argument of the learned counsel for the respondent Bank is accepted, in Tamil Nadu, except the General Category students, no other students belonging to SC/ST and Most Backward Class categories admitted in the B.E. Course with less than 45% marks, could get educational loan, since the Government prescribed 35% marks for admission to SC/ST students, 40% marks for admission to Most Backward Class students, while 50% marks is prescribed for Open Category. Such a prescription of lower marks for SC/ST students is to achieve the objective of the constitutional goal set out in Article 46 of the Constitution. The very purpose of the educational loan would get thus defeated. The Union of India came with the policy of granting educational loan to weaker sections of the society in furtherance of Article 46 of the Constitution. Article 46 should be read with Article 21 of the Constitution. One of the facets of Article 21 of the Constitution is right to education. In this regard, Article 46 of the Constitution is extracted hereunder: "46.Promotion of educational and economic interests of Scheduled Castes, Scheduled Tribes and other weaker sections. - The State shall promote within special care the educational and economic interests of the weaker sections of the people, and, in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation." 15.The great Tamil Poet Thiruvalluvar highlighted the importance of education by saying that person, without education, is the person without eyes. The said Thirukkural is as follows: https://hcservices.ecourts.gov.in/hcservices/ "fz; cilah; vd;gth; fw;nwhh; Kfj;J ,uz;L g[z; cilah; fy;yhjth; . and the English translation is as follows:- Only the learned have their faces adorned by two eyes, For the ignorant, eyes are no more than sores. " 16.Hence, the respondent Bank cannot cite the circular dated 03.06.2008 of its Head Office as well as the Model Educational Loan Scheme of the Indian Banks' Association to deny educational loan to the petitioner. If such an attitude was there, even Dr.B.R.Ambedkar could not have gone for higher education. Dr.B.R.Ambedkar obtained only 287 marks out of 750 in the matric examination. But the King of Baroda was kind enough to extend financial assistance to Dr.B.R.Ambedkar. Here, the Union of India has now framed a scheme for providing financial assistance to weaker sections of the Society for their education. But it is unfortunate that the respondent Bank is denying the same to the weaker sections of the society, citing one reason or the other. 17.This Court in uncertain terms held in the decision reported in 2010 (6) MLJ 47 that once the eligibility for admission is established and a candidate is selected through any one of the mode of selection, which is permitted by the Monitoring Committee and the University having approved the admission of the petitioner, it is not open to the respondent Bank to refuse loan facility viz., education loan to a deserving candidate like the petitioner. Paras 11, 12 and 13 of the said judgment are extracted hereunder: "11.In the impugned order, the second respondent has stated that since the petitioner has secured admission in management quota and not went through the selection process, the petitioner is not eligible to get sanction of education loan. The said stand of the respondents is contrary to the scheme announced by the respondents viz., Vidya Jyothi Educational Loan Scheme. Though in the said scheme it is stated that admission could be claimed by writing entrance examination, it is common knowledge to all concerned that in the state of Tamil Nadu, no entrance examination is conducted for admission to B.E. Degree course or for any professional course. Admittedly, there are two modes of admissions to professional course in self- https://hcservices.ecourts.gov.in/hcservices/ financing colleges in the state of Tamil Nadu viz., Government quota, i.e., candidates are selected through single window selection and management quota. The said allocation of seats is also approved every year by the Monitoring Committee headed by a retired High Court Judge, constituted by the State Government as per the Judgment of the Supreme Court in the decision in Islamic Academy of Education v. State of Karnataka AIR 2003 SC 3724 : (2003) 6 SCC 697 and P.A. Inamdar v. State of Maharashtra AIR 2005 SC 3226 : (2005) 6 SCC 537 : (2005) 3 MLJ 158. 12.The fact that the petitioner was selected and admitted in the management quota seat and pursuing his studies cannot be a debarment for submitting application to avail education loan. It is not the case of the respondents that the petitioner is not eligible to be admitted in the B.E. Degree course due to lack of minimum marks, age or otherwise. Once eligibility for admission is established and a candidate is selected through any one of the mode of selection, which is permitted by the Monitoring Committee and the University having approved the admission of the petitioner, it is not open to the respondent bank to refuse loan facility viz., education loan to a deserving candidate like the petitioner. The Central Government as well as the Reserve Bank of India gave guidelines to the banking sectors to sanction education loan to all deserving candidates. The requirements, the banks can insist upon is whether the candidate is eligible to be admitted in the course, whether the course is approved by the competent body, and whether the college is affiliated to the University which conducts examinations. 13.The Schemes and Policies are framed by the Central Government and the benefit should reach the deserving persons. Rejecting the claim of education loan to the petitioner by the second respondent by raising untenable and hypertechnical ground establishes the mindset of the person, who is in charge of the bank. The Bank is not entitled to take a rigid and hairsplitting interpretation in cases like this, without bearing in mind the object of the Scheme. In all other Banks, education loan https://hcservices.ecourts.gov.in/hcservices/ is sanctioned to students admitted in management quota. In some cases, though initially the loan applications were not considered favourably, on receiving notice, the concerned banks readily sanctioned loans on the basis of valuable legal advice given by the standing counsels. If the attitude of the respondent bank is accepted or given a seal of approval, it would be discriminatory and violative of Article 14 of the Constitution of India, which prohibit discriminatory treatment to a citizen. The higher officials of the respondent bank are bound to give proper instructions to Branch Managers as to how the applications seeking education loan are to be processed, so that such kind of unreasonable attitude can be avoided." 18.This Court in another judgment in W.P.No.33933 of 2007 (decided on 16.11.2007) also held that just because the student failed in one subject does not mean that he is unqualified to get educational loan. In the said case, educational loan was declined on the ground that he was not meritorious. The aforesaid scheme of the Indian Banks' Association was cited by the respondent Bank to refuse educational loan. Para 9 of the said judgment is extracted hereunder in this regard. "9.On the face of it one can see that the order passed by the second respondent is patently illegal and against the policy of the Government and it is against the concept of propagating education among the students especially to the students who come from down trodden community. A reference to the impugned order passed by the second respondent bank which reads as follows: "We refer to the above and inform you that due to poor academic career of the student, we are unable to consider educational loan for your son." makes it very clear that the second respondent has predetermined the issue even before the petitioner has chosen to join in his B.E. Degree course. Merely because in his Plus Two (+2) examination he has failed in one subject does not mean that he is unqualified. Based on his qualification only the https://hcservices.ecourts.gov.in/hcservices/ authorities competent have admitted him in an Engineering Degree Course and it is not for the second respondent to under estimate the quality of any such candidate. On the other hand, even a reference to the guidelines which is stated in the current guidelines shows that the basis of issuance of guidelines is to encourage education among the students and no where it is stated that only bright students should alone be given such loans. On the other hand the guidelines show that in the normal circumstances, while appraising the loan, the prospects of the future income of the student which has to be considered and it is also open to the bank to consider the prospects of the parent / guardian." 19.None of the judgments relied on by the learned counsel for the respondent are relating to educational loan and on the other hand, those judgments relate to commercial transactions. This Court as well as the Honourable Apex Court categorically held that in commercial transactions, the jurisdiction of this Court under Article 226 of the Constitution is limited and normally this Court could not interfere in the commercial transactions. Hence, those judgments do not apply to the facts and circumstances of this case. 20.In fact, the judgment of the Honourable Apex Court in STATE OF TAMIL NADU VS. S.V.BRATHEEP reported in 2004 (2) CTC 227 relied on by the learned counsel for the respondent supports the case of the petitioner. In the said case, the State prescribed higher marks as eligibility for admission in B.E. Course than the marks prescribed by AICTE. This was put to challenge before this Court. A learned single Judge sustained the order of the Government prescribing higher qualification. However, a Division Bench of this Court set aside the order of the learned single Judge. The matter was taken to the Honourable Apex Court. The Honourable Apex Court held that the State has power to prescribe higher marks as a minimum eligibility criteria for admission in B.E. Course than the marks prescribed by the AICTE. The relevant passage in para 3 of the judgment in 2004 (2) CTC 227 is extracted hereunder: "3.The learned Single Judge of the High Court, who examined the matter, held that the prescription of qualifications or prescription of the minimum eligible marks for SC/ST as mere pass, most backward at 50% average marks in the related subjects, backward at 55% average marks in the related subjects and other classes at 60% average marks in the related subjects, would not be in conflict with https://hcservices.ecourts.gov.in/hcservices/ the Regulations of the All India Council for Technical Education (AICTE) and, therefore, dismissed the writ petitions. On appeal, a Division Bench of the High Court held that there is a glaring difference in the norms fixed by AICTE and the norms fixed by the State Government, and struck down the same........." 21.The aforesaid judgment makes it clear that even at that time, a mere pass was required for SC/ST students. When the Government prescribed a mere pass for admission to SC/ST students, the Bank cannot deny those students the educational loan citing that the SC/ST students failed to get 45% of marks. As stated above, the petitioner was the first person in his family to enter the college education. 22.Considering the facts and circumstances of the case, the respondent is directed to sanction educational loan to the petitioner for his second year B.E. Course, within a period of four weeks from the date of receipt of a copy of this order and also sanction educational loan for the third and fourth year course respectively. As far as the payment of fees for the second year is concerned, the college is directed to reimburse the same to the petitioner on receipt of the loan being sanctioned by the respondent bank. 23.The writ petition is disposed of with the above directions. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar TK To The Branch Manager State Bank of Travancore Tiruvallur Salai, Panneer Nagar, Mugappair, Chennai – 600 037. +1cc to Mr.K.Sankaran, Advocate Sr 68039 +1cc to Mr.C.Prakasam, Advocate Sr 68499 KSK(CO) km/17.9. W.P.NO.556 OF 2010 https://hcservices.ecourts.gov.in/hcservices/