Canara Bank v. Sajith S. and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE** ## **&** **THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN TUESDAY, THE 28[TH] DAY OF FEBRUARY 2023 / 9TH PHALGUNA,** ## **1944** ## **WA NO. 151 OF 2023** **WP(C) 25719/2022 OF HIGH COURT OF KERALA** ## **- APPELLANTS/RESPONDENTS 3 5:** 1 CANARA BANK, REPRESENTED BY ITS ASSISTANT GENERAL MANAGER CANARA BANK REGIONAL OFFICE 31/1003, 2ND FLOOR AZEEZ COMPLEX MARKET ROAD, PALAKKAD KERALA, PIN - 678014 2 THE BRANCH MANAGER CANARA BANK BIG BAZAAR BRANCH B.O.C. ROAD PALAKKAD, PIN - 678014 3 THE BRANCH MANAGER CANARA BANK PAZHAYANNUR BRANCH KVM PLAZA AMBALA NADA, ELANAD ROAD PAZHAYANNUR P.O. THRISSUR, PIN - 680104 BY ADVS. ANIRUDH KADAVIL M.J.RAJASREE K.V.ANIL ## **- RESPONDENTS/PETITIONERS 1 4 & RESPONDENTS 1,2 & 6:** 1 SAJITH S., S/O SURENDRAN A AGED 21 YEARS CHINAMMA NIVAS, PRANAMKULAM VADAKKANTHARA, PALAKKAD, PIN - 678012 WA Nos.151 & 248 of 2023 ..2.. - 2 RAJALAKSHMI K., D/O KRISHNANKUTTY K AGED 22 YEARS KUNNATHU VEEDU THIRUVADI, THEKKEPOTTA P.O. PALAKKAD, PIN - 678687 - 3 SREEKUTTY P.P., D/O PRABHAKARAN N AGED 22 YEARS PARAKKODE, THEKEKALAM KANIYARCODE THRISSUR, PIN - 680594 - 4 SUJITHRA K M., D/O MURALI K N AGED 21 YEARS KILINIYIL HOUSE SOUTH KONDAZHY, KONDAZHY THRISSUR, PIN - 679106 - 5 UNION OF INDIA, REPRESENTED BY SECRETARY TO GOVERNMENT MINISTRY OF FINANCE GOVERNMENT OF INDIA NEW DELHI, PIN - 110001 - 6 THE RESERVE BANK OF INDIA REPRESENTED BY THE GENERAL MANAGER REGIONAL OFFICE, KOCHI ERNAKULAM, PIN - 682018 - 7 SADANAM INSTITUTE OF COMMERCE AND MANAGEMENT STUDIES (SICOMS) GANDHI SEVA SADAN P.O. PERUR VIA PALAKKAD REPRESENTED BY ITS DIRECTOR, PIN - 679302 BY ADV JACOB SEBASTIAN THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 24.02.2023, ALONG WITH WA.248/2023, THE COURT ON 28.02.2023 DELIVERED THE FOLLOWING: WA Nos.151 & 248 of 2023 ..3.. ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE** **&** **THE HONOURABLE MRS. JUSTICE SHOBA ANNAMMA EAPEN TUESDAY, THE 28[TH] DAY OF FEBRUARY 2023 / 9TH PHALGUNA,** **1944** **WA NO. 248 OF 2023** **WP(C) 15376/2022 OF HIGH COURT OF KERALA** ## **- APPELLANTS/RESPONDENTS 3 6 & ADDL.RESPONDENT 8:** - 1 CANARA BANK, REPRESENTED BY ITS ASSISTANT GENERAL MANAGER CANARA BANK REGIONAL OFFICE 31/1003, 2ND FLOOR AZEEZ COMPLEX ,MARKET ROAD, PALAKKAD, PIN - 678014 - 2 THE BRANCH MANAGER CANARA BANK SREEKRISHNAPURAM BRANCH PALAKKAD DISTRICT, PIN - 678014 - 3 THE BRANCH MANAGER CANARA BANK SPECIALISED SME BRANCH SHORANUR, KULAPPULLY P.O. PALAKKAD, PIN - 679122 4 THE BRANCH MANAGER CANARA BANK KONGAD BRANCH PALAKKAD, PIN - 678631 - 5 THE BRANCH MANAGER CANARA BANK KALLUVAZHY BRANCH KALLUVAZHY P.O. PALAKKAD, PIN - 679514 BY ADVS. ANIRUDH KADAVIL M.J.RAJASREE K.V.ANIL WA Nos.151 & 248 of 2023 ..4.. ## **- RESPONDENTS/PETITIONERS 1 5 & RESPONDENTS 1,2 & 7:** - 1 VAISAKH T P, AGED 21 YEARS S/O SUBRAMANIAN T P THAZHATHEPURA HOUSE PUNCHAPPADAM P.O. PALAKKAD, PIN - 678633 - 2 SUDHEESH M., AGED 21 YEARS S/O SANTHOSH M MOOSALITHODI, POOKKOTTUKAVU KADAMBUR P.O. PALAKKAD, PIN - 679515 - 3 ANJALI K., AGED 22 YEARS D/O SUBRAMANYAN AND SATHI K KALATHETHIL HOUSE, MANGALAMKUNNU KATTUKULAM P.O. PALAKKAD, PIN - 679514 - 4 VINDUJA M., AGED 21 YEARS D/O JANARDHANAN M MAMBUZHI HOUSE, KOONATHARA P.O. KAVALAPARA PALAKKAD, PIN - 679523 - 5 FATHIMATHUL FARSANA P H., AGED 21 YEARS D/O HAMSA PARAKKAL HOUSE, PARASSERY KONGAD P.O. PALAKKAD, PIN - 678631 - 6 THE UNION OF INDIA, REPRESENTED BY SECRETARY TO GOVERNMENT MINISTRY OF FINANCE GOVERNMENT OF INDIA NEW DELHI, PIN - 110001 - 7 THE RESERVE BANK OF INDIA REPRESENTED BY THE GENERAL MANAGER REGIONAL OFFICE, KOCHI ERNAKULAM, PIN - 682018 - 8 SADANAM INSTITUTE OF COMMERCE AND MANAGEMENT STUDIES (SICOMS) GANDHI SEVA SADAN P.O. PERUR VIA PALAKKAD REPRESENTED BY ITS DIRECTOR, PIN - 679302 THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 24.02.2023, ALONG WITH WA.151/2023, THE COURT ON 28.02.2023 DELIVERED THE FOLLOWING: WA Nos.151 & 248 of 2023 **==> picture [31 x 7] intentionally omitted <==** ## **JUDGMENT** ## SHOBA ANNAMMA EAPEN, J. The common judgment dated 21.12.2022 rendered by the learned Single Judge, allowing WP(C) Nos.15376/2022 and 25719/2022, is the subject matter of challenge in these intra court appeals filed under Section 5(i) of the Kerala High Court Act, 1958. 2. The appellants in WA No.248/2023 are respondents 3 to 6 and the additional 8[th] respondent in WP(C) No.15376/2022. Respondents **==> picture [389 x 12] intentionally omitted <==** respondents 6 to 8 are respondents 1, 2 & 7 in WP(C) No.15376/2022. 3. The appellants in WA No.151/2023 are respondents 3 to 5 in WP(C) No.25719/2022. Respondents 1 to 4 are the writ petitioners and respondents 5 to 7 are respondents 1, 2 & 6 in WP(C) No.25719/2022. 4. The appellants in both appeals are hereinafter WA Nos.151 & 248 of 2023 **==> picture [31 x 7] intentionally omitted <==** referred to as, “the Bank”. The writ petitioners in both the writ petitions, who are respondents 1 to 5 in WA No.248/2023 and respondents 1 to 4 in WA No.151/2023, are hereinafter referred to as, “the party respondents”. 5. The party respondents are pursuing full time course and Post Graduate Programme in Management (PGDM) in the Sadanam Institute of Commerce and Management Studies in Palakkad District. They were admitted to the course on the basis of All India MAT/KMAT/CAT scores apart from the entrance/screening procedure by conducting attitude tests, group discussion and interview. The total fee for the course is Rs.3,75,000/-. Since they are from financially poor families, for pursuing the education, they applied for educational loan from the appellants/respondent bank. It was alleged that though an amount of Rs.3,75,000/- was applied for by the party respondents, the Bank WA Nos.151 & 248 of 2023 **==> picture [31 x 7] intentionally omitted <==** sanctioned only a lesser amount after deducting the margin amount. Hence, they have approached this Court seeking for a direction to disburse the full amount of Rs.3,75,000/applied for by them as education loan. 6. The Bank filed a statement, stating that deduction from the sanctioned amount is not towards margin money, but, it is strictly in accordance with the Model Education Loan Scheme for pursuing higher education in India and abroad published by the Indian Bank Association and the Master Circular issued by the bank adopting the Scheme. The learned Single Judge, after hearing both sides, allowed the writ petition directing the Bank to disburse the balance amount due towards the education loan of Rs.4,00,000/- sanctioned to the party respondents. It is challenging this, the Bank has come up in appeal. 7. Heard the learned Standing Counsel for the Bank, the learned counsel for party WA Nos.151 & 248 of 2023 **==> picture [31 x 7] intentionally omitted <==** respondents, and the learned Deputy Solicitor General of India. 8. The learned Standing Counsel for the Bank submitted that the margin money or loan margin is the portion of the loan, which is to be paid by the students towards own contribution while availing an educational loan. It was further submitted that the Bank has not insisted on any margin money since the educational loan applied for by the party respondents was below Rs.4,00,000/-. It was also submitted that the Bank has to abide by the guidelines issued by he Reserve Bank of India being statutory in nature that has made the capping of 20% for each segment of the fees based on the Model Education Loan Scheme which is issued as per the guidelines of Reserve Bank of India and Government of India. 9. The learned counsel for the party respondents submitted that the Bank is duty bound to disburse the entire amount sanctioned and they WA Nos.151 & 248 of 2023 **==> picture [31 x 7] intentionally omitted <==** are not entitled to deduct any amount towards margin money or loan margin since the loan amount applied was below Rs.4,00,000/-. 10.During the time of hearing of the appeal, the Bank was directed to produce the loan application as well as the sanction advice. The Bank produced Annexures A1 to A10 along with IA No.2/2023 in WA No.248/2023 and Annexures A1 to A8 along with IA No.1/2023 in WA No.151/2023, which are the loan applications submitted by the party respondents and the sanction memoranda of the Bank. 11.On a perusal of Annexures A1 to A10 in WA No.248/2023, it is seen that as per Annex.A1 loan application, the 1[st] party respondent has applied for an amount of Rs.3,50,000/- and as per Annex.A2 sanction memorandum, Rs.3,50,000/- was sanctioned to him by the Bank. Annex.A3 is the loan application submitted by the 2[nd] party respondent for an WA Nos.151 & 248 of 2023 **==> picture [37 x 7] intentionally omitted <==** amount of Rs.3,00,000/- and as per Annex.A4 sanction memorandum, Rs.3,00,000/was sanctioned to him. Similarly, Annex.A5 loan application submitted by the 3[rd] party respondent reveals that she had applied for an amount of Rs.3,50,000/- and the said amount of Rs.3,50,000/- was sanctioned as per Annex.A6 sanction memorandum. Annex.A7 loan application of the 4[th] party respondent reveals that she had applied for Rs.3,75,000/- and as per Annex.A8 sanction memorandum, the said amount of Rs.3,75,000/- was sanctioned. Annex.A9 is the loan application submitted by the 5[th] party respondent for an amount of Rs.3,75,000/- and as per Annex.A10 sanction memorandum, the said amount was sanctioned. 12. On going through the Annexures A1 to A8 in WA No.151/2023, it is seen that as per Annex.A1 loan application, the 1[st] party respondent has applied for an amount of Rs.3,75,000/- and as per Annex.A2 sanction memorandum, an amount of WA Nos.151 & 248 of 2023 **==> picture [37 x 7] intentionally omitted <==** Rs.3,30,000/- was sanctioned to him by the Bank. Annex.A3 is the loan application submitted by the 2[nd] party respondent for an amount of Rs.3,30,000/- and as per Annex.A4 sanction memorandum, the said amount of Rs.3,30,000/- was sanctioned to her. Similarly, Annex.A5 loan application submitted by the 3[rd] party respondent reveals that she had applied for an amount of Rs.3,30,000/- and the said amount of Rs.3,30,000/- was sanctioned as per Annex.A6 sanction memorandum. Annex.A7 loan application of the 4[th] party respondent reveals that she had applied for Rs.3,30,000/- and as per Annex.A8 sanction memorandum, the said amount was sanctioned. 13.It is discernible from Annexures A1 to A10 produced by the Bank in WA No.248/2023 that the Bank had sanctioned the amount of loan requested by all the party respondents therein. Annexures A1 to A8 in WA No.151/2023, WA Nos.151 & 248 of 2023 **==> picture [37 x 7] intentionally omitted <==** reveal that the Bank has sanctioned the amount requested by all the party respondents except for party respondent No.1, viz., Sri.Sajith S., who has applied for a loan amount of Rs.3,75,000/as per Annex.A1 loan application, wherein the Bank, as per Annex.A2 sanction memoranda, has sanctioned only an amount of Rs.3,30,000/-. 14.It is not correct to say that all the other party respondents in both the writ appeals had applied for an amount of Rs.3,75,000 or Rs.4,00,000/-, as the case may be. The loan documents reveal otherwise. The annexures produced by the Bank reveal that they have sanctioned the amounts requested by the party respondents, except in the case of party respondent No.1 in WA No.151 of 2023. Hence, the finding of the learned Single Judge directing the Bank to disburse the amount of Rs.4,00,000/-to the party respondents is not correct. WA Nos.151 & 248 of 2023 **==> picture [37 x 7] intentionally omitted <==** 15.As far as the loan application of the party respondent No.1 in WA No.151 of 2023 is concerned, the loan request was for an amount of Rs.3,75,000/-, but, the sanctioned amount is only Rs.3,30,000/-. No reason is stated in the sanction memoranda for sanctioning an amount of Rs.3,30,000/- to the party respondent No.1, viz., Sri.Sajith.S. The only reason stated in Annex.A2 sanction memoranda is, “Margin % - 0% (Rs.45,000) This has to be met out of savings”. The learned Standing Counsel for the Bank submitted that capping of other expenses at 20% of the total tuition fee payable formed a part of the Model Education Scheme. 16.Similar issue was considered by this Court in **Gouri K. and Others** v. **State Bank of India** , in W.P.(C) No.1815/2015, wherein it was held that the capping of the tuition fee on a few components goes against the spirit of the education loan scheme. The appeal filed by the WA Nos.151 & 248 of 2023 **==> picture [37 x 7] intentionally omitted <==** Bank against the above judgment, before this Court was dismissed on 09.09.2016. - 17.Here, in this case, no reason is stated in the sanction memoranda regarding the capping of other expenses concerned. In respect of all party respondents except for the party respondent No.1 in WA No.151 of 2023, the Bank has sanctioned the loan amount as requested by them. Hence, we are of the view that as regards the loan amount of party respondent No.1, viz., Sri.Sajith S. in W.A.No.151 of 2023, is concerned, the Bank has to disburse the balance amount of Rs.45000/- requested by him by way of education loan. Accordingly, the following orders are issued; a)Writ Appeal No.248/2023 is allowed. b) Writ Appeal No.151/2023 is partly allowed. The Bank is directed to disburse the balance loan amount of Rs.45,000/- to the party respondent No.1 in W.A.No.151 of 2023, viz., Sri.Sajith S., within a period WA Nos.151 & 248 of 2023 **==> picture [37 x 7] intentionally omitted <==** of one month from the date of receipt of a certified copy of the judgment. c)The request for disbursement of the balance amount by the other party respondents is rejected. ## **Sd/-** ## **A. MUHAMED MUSTAQUE** **JUDGE** **Sd/-** **SHOBA ANNAMMA EAPEN** **JUDGE** bka/- WA Nos.151 & 248 of 2023 ..16.. ## **APPENDIX OF WA 248/2023** ## PETITIONER ANNEXURES |Annexure A1|A TRUE COPY OF THE STATEMENT FILED IN| |---|---| ||WP(C) NO.25719/2022 FILED BY| ||RESPONDENT NO.3 TO 5 AS DIRECTED BY| ||THIS HONOURABLE COURT ON 18.10.2022| |Annexure A2|A TRUE COPY OF THE SANCTION MEMORANDUM| ||DATED NIL ISSUED BY THE 2ND PETITIONER| ||IN FAVOUR OF THE 1ST RESPONDENT| |Annexure A3|A TRUE COPY OF THE EDUCATIONAL LOAN| ||APPLICATION SUBMITTED BY THE 2ND| ||RESPONDENT TO THE 5TH PETITIONER ON| ||12.07.2022| |Annexure A4|A TRUE COPY OF THE SANCTION MEMORANDUM| ||DATED 12.07.2022 ISSUED BY THE 5TH| ||PETITIONER IN FAVOUR OF THE 2ND| ||RESPONDENT| |Annexure A5|A TRUE COPY OF THE EDUCATIONAL LOAN| ||APPLICATION SUBMITTED BY THE 3RD| ||RESPONDENT TO THE 2ND PETITIONER ON| ||02.08.2022| |Annexure A6|A TRUE COPY OF THE SANCTION MEMORANDUM| ||DATED NIL ISSUED BY THE 2ND PETITIONER| ||IN FAVOUR OF THE 3RD RESPONDENT| |Annexure A7|A TRUE COPY OF THE EDUCATIONAL LOAN| ||APPLICATION SUBMITTED BY THE 4TH| ||RESPONDENT TO THE 3RD PETITIONER ON| ||29.12.2021| |Annexure A8|A TRUE COPY OF THE SANCTION MEMORANDUM| ||DATED 23.06.2022 ISSUED BY THE 3RD| ||PETITIONER IN FAVOUR OF THE 4TH| ||RESPONDENT| WA Nos.151 & 248 of 2023 ..17.. Annexure A9 A TRUE COPY OF THE EDUCATIONAL LOAN APPLICATION DATED NIL SUBMITTED BY THE 5TH RESPONDENT TO THE 4TH PETITIONER Annexure A10 A TRUE COPY OF THE SANCTION MEMORANDUM DATED 02.08.2022 ISSUED BY THE 4TH PETITIONER IN FAVOUR OF THE 5TH RESPONDENT WA Nos.151 & 248 of 2023 ..18.. ## **APPENDIX OF WA 151/2023** PETITIONER ANNEXURES - Annexure A1 A TRUE COPY OF THE EDUCATIONAL LOAN APPLICATION SUBMITTED BY THE 1ST RESPONDENT TO THE 2ND PETITIONER ON 15.03.2022 - Annexure A2 A TRUE COPY OF THE SANCTION MEMORANDUM DATED 19.05.2022 ISSUED BY THE 2ND PETITIONER IN FAVOUR OF THE 1ST RESPONDENT - Annexure A3 A TRUE COPY OF THE EDUCATIONAL LOAN APPLICATION SUBMITTED BY THE 2ND RESPONDENT TO THE 3RD PETITIONER ON 14.05.2022 - Annexure A4 A TRUE COPY OF THE SANCTION MEMORANDUM DATED NIL ISSUED BY THE 3RD PETITIONER IN FAVOUR OF THE 2ND RESPONDENT - Annexure A5 A TRUE COPY OF THE EDUCATIONAL LOAN APPLICATION SUBMITTED BY THE 3RD RESPONDENT TO THE 3RD PETITIONER ON 16.05.2022 - Annexure A6 A TRUE COPY OF THE SANCTION MEMORANDUM DATED NIL ISSUED BY THE 3RD PETITIONER IN FAVOUR OF THE 3RD RESPONDENT - Annexure A7 A TRUE COPY OF THE EDUCATIONAL LOAN APPLICATION SUBMITTED BY THE 4TH RESPONDENT TO THE 3RD PETITIONER ON 14.06.2022 Annexure A8 A TRUE COPY OF THE SANCTION MEMORANDUM DATED NIL ISSUED BY THE 2ND PETITIONER IN FAVOUR OF THE 1ST RESPONDENT