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Judgment
The appellant joined B.A. LL.B. Course (duration 5 years)
and applied for education loan to the State Bank of Bikaner and
Jaipur. After processing the application of the appellant, vide
letter dated 25th July, 2007, education loan in sum of
Rs.3,97,500/- was sanctioned. The loan had to be disbursed in
instalments to pay the Course fee. In terms of the sanction
letter the loan had to be returned in equated 60 monthly
instalments. Repayment was to commence from February, 2013.
The period interregnum was allowed as moratorium. After
moratorium period was over, the appellant started paying
monthly instalments and by March 2015 paid Rs.2,59,200/- in 18
instalments.
As per appellant he then realized that he was entitled to
waiver of interest during the moratorium period in view of a
policy decision taken by the Government of India, inasmuch as
the Government of India notified a Scheme to provide interest
subsidy by making available direct funds to the banks. Since the
bank did not agree to the stand taken by the appellant and
relied upon its circular dated 4th March, 2014 the appellant filed
a writ petition in this Court which has been dismissed by the
learned Single Judge vide impugned order dated 5 th November,
2015.
The view taken by the learned Single Judge is that a
subsidy is not a matter of right and that the speech by Union
Finance Minister while presenting the budget could not be relied
upon for purposes of interpreting the Scheme which was finally
notified. The learned Single Judge has held that the Scheme
notified allowed subsidy on interest component outstanding as
on 31st December 2013. The learned Single Judge has held that
qua the appellant no interest was outstanding as on 31 st
December, 2013.
From a perusal of the impugned decision we find that
though the learned Single Judge has noted the Scheme notified
by the Government of India, but the impugned decision is
premised on what was relied upon by the Indian Banks''
Association as their understanding of the Scheme.
It would thus be necessary to note the contents of the
Scheme notified by the Government of India. The same was
annexed as Annexure-6 to the writ petition and in the reply filed
by the respondents was admitted as a correct document.
Sub paras (i) and (ii) of para-2 of the Scheme notified by
the Government of India are relevant to be noted. They read as
under:-
"2. The broad parameters of the Scheme are:-
(i) The Scheme would be only applicable for studies in technical and professional courses in India. The interest subsidy shall be linked with the existing Educational Loan Scheme of IBA and restricted to students enrolled in recognized professional courses (after Class XII) in India in Educational Institutions established by Acts of Parliament, other Institutions recognized by the concerned Statutory Bodies, Indian Institutes of Management (IIMs) and other institutions set up by the Central Government.
(ii) Under the Scheme, interest payable by the student availing of the Educational Loan Scheme of the Indian Banks'' Association for professional courses for the period of moratorium (i.e. course period, plus one year or six months after getting job, whichever is earlier) as prescribed under the Educational Loan Scheme of the Indian Banks'' Association, shall be borne by the Government. After the period of moratorium is over, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing Educational Loan Scheme and as may be amended from time to time."
A perusal of sub-para(ii) would show that the decision of
the Government of India was that interest payable by the
students availing Educational Loan Scheme for the period of
moratorium shall be borne by the Government and after the
moratorium was over, the interest on the outstanding loan
amount would be paid by the student.
The Scheme has two distinct parts. The first pertaining to
the period of moratorium. The second for the period after the
moratorium was over.
This has been overlooked by the learned Single Judge.
The Scheme unequivocally records that for the period of
moratorium the interest would be borne by the Government.
The reason is obvious. Its purpose finds mention in the
budget speech made by the Union Finance Minister. The Union
Minister made a reference to the budget for the year 2009-10, in
which for the period of moratorium the Government agreed to
bear the burden of interest but for loans disbursed after 1 st April
2009. The Scheme brought great cheers to the students-
borrowers and their families. The Union Minister noted that there
was a sense of discrimination vis-a-vis students who had
borrowed before 31st March, 2009 and had to bear the interest
burden for the period of moratorium. Making a budgetary
allocation of Rs.2,600/- crores to be directly transferred to the
banks the assurance was that for the period of moratorium for
education loans taken upto 31st March, 2009 and outstanding up
till 31st December, 2013 the Government would take over the
interest liability.
Though we find no ambiguity in the Scheme, but we refer
to the speech made at the floor of the Parliament to bring home
the point that even for education loans which were disbursed up
till 31st March, 2009 the Government took over the liability to
pay interest for the moratorium period.
To confuse the issue of interest for the period post 31 st
December 2013 with reference to the loan outstanding is to miss
the bus. A loan taken would be an outstanding loan till not paid.
But it may not be payable on a particular date because of the
agreement between the parties.
A plain reading of the Scheme notified by the Government
makes it very clear that for the period of moratorium for
education loans taken upto 31st March, 2009 the interest would
be borne by the Government and for which Rs.2,600/- crores was
earmarked in the budget.
We dispose of the appeal declaring that for the period of
moratorium the appellant would not be liable to pay any interest
on the loan disbursed. On the loan disbursed the appellant would
be liable to pay interest post the period of moratorium.
No costs.