Haritha vs Dhanalakshmi Bank

Manjula Chellur, Ag. C.J.

This appeal is directed against the judgment of the learned Single Judge, wherein the learned Single Judge refused to intervene and grant the reliefs sought in the Writ Petition. It is not in dispute that the appellant, a student of Engineering in Electronics and Communication in Indian Engineering College, Vadakkankulam, Thirunelveli, approached the respondent Bank for sanction of an educational loan of Rs. 4,00,000/-. When the loan came to be rejected for want of repaying capacity of the petitioner and that of her parents, the petitioner approached the learned Single Judge. According to the appellant-writ petitioner, as per the guidelines issued by the Reserve Bank of India in the matter of granting educational loans by way of Model Educational Loan Scheme referred to at Exhibits R1(a) and R1(b), the respondent Bank had no authority to deny the loan to the appellant. The relevant clauses of the Scheme so far as sanctioning the loan are clauses 5 and 9. So far as the repayment, it is clause 10, which governs the situation. Unless the repaying capacity as indicated at clause 5 of the revised Scheme at Exhibit R1(b) is satisfactorily explained by the appellant, the Bank will not be able to proceed further so as to consider the repayment capacity or repayment schedule as indicated at clause 10. Clauses 5 and 9 have to be read together in order to consider the sanctioning of the educational loan. To evaluate repayment capacity, clause 5 also needs to be looked into, because depending upon the repaying capacity, the quantum of loan will be sanctioned. So far as appraisal of the financial position of the appellant and her parents, clause 9 has to be taken into consideration. According to the respondent Bank, after making appraisal of the entire situation, when the monthly income of the appellant''s parents would only come to Rs. 12,000/- per month and the possible EMI would be more than Rs. 6,000/- per month, it was not a case to be considered positively favouring the appellant. Therefore, the Bank offered a sum of Rs. 2,00,000/- as loan after appraising the financial capacity of the appellant and her family. The learned Single Judge, after referring to the clauses of the Scheme, disposed of the Writ Petition, directing the Bank to consider the possibility of granting of Rs. 2,50,000/- as loan to the appellant. Aggrieved by this, the appellant is before us.

The reliance is mainly placed on Exhibits R1(a) and R1(b), the Model Educational Loan Scheme and the Revised Model Educational Loan Scheme of the Reserve Bank of India. If there is any violation so far as compliance with the Model Educational Loan Scheme or the guidelines, it is for the RBI to take action against the Bank concerned for the violation. Here, based on the guidelines, the appellant is seeking a direction by way of a writ of mandamus to direct the respondent Bank to grant her loan for Rs. 4,00,000/-. When clauses 5, 9 and 10 are read together, it is very clear that the Bank has to be satisfied by way of appraisal report that the repaying capacity of the borrower in its objective assessment is positive so as to have repayment of the loan as contemplated under clause 10 of the Scheme.

In that view of the matter, the question is whether the Court could compel respondent Bank to give loan regardless of the repaying capacity of the appellant and without appraising the situation at all. If the Scheme proposes appraisal and also indicates who could get how much loan, definitely it would indicate a caution to the Banks to have an appraisal of the situation depending upon the particulars issued in the application so as to safeguard the public money, which is given as loan to the students like the appellant. In that view of the matter, in the absence of satisfactory appraisal regarding the repaying capacity of the borrower, the respondent-Bank was justified in saying, it cannot sanction loan beyond Rs. 2,00,000/-. Under these circumstances, we are of the opinion, there cannot be a positive direction giving the relief of mandamus directing the respondents to sanction a sum of Rs. 4,00,000/- as loan.

Accordingly, the Writ Appeal is dismissed.