Jimson Titus v Bank of Baroda, Thrissur Branch & Reserve Bank of India

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ## **`THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR`** ## **`&`** ``` THE HONOURABLE MR. JUSTICE SHAJI P.CHALY ``` ``` TUESDAY, THE 11[TH] DAY OF JANUARY 2022 / 21ST POUSHA, 1943 ``` ## **`WA NO. 35 OF 2022`** ``` AGAINST THE JUDGMENT IN WP(C) 21235/2021 OF HIGH COURT OF KERALA ``` ## **`APPELLANT/WRIT PETITIONER:`** ``` JIMSON TITUS AGED 20 YEARS, S/O.TITUS, THANNIPPILLY HOUSE, NADATHARA P.O., MINOR ROAD, PIN - 680 751. ``` ``` BY ADVS. SHERRY J. THOMAS JOEMON ANTONY ``` ## **`RESPONDENTS/RESPONDENTS:`** ``` 1THE CHIEF MANAGER BANK OF BARODA, THRISSUR BRANCH, THIRUVAMBADY DEVASWOM BUILDING, ROUND WEST, THRISSUR, KERALA - 680 001. 2THE GENERAL MANAGER, RESERVE BANK OF INDIA, REGIONAL OFFICE, BANJERI ROAD, ERNAKULAM NORTH, KALOOR, ERNAKULAM - 682 018. ``` ``` SRI. NAGARAJ NARAYANAN, SC FOR R1 ``` ``` THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 11.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` **W.A.No.35 of 2022** **2** ## **JUDGMENT** Dated this the 11[th] day of January, 2022 ## **S.Manikumar, C.J.** Before the writ court, the petitioner/appellant has sought ## for the following reliefs: - “i) Issue a Writ of Mandamus or any other Writ, order directing to the 1[st] Respondent to disburse the amount sanctioned as per Ext P3 in accordance with the requirement of course fee as scheduled Para 5.3 of Ext P4 Scheme, forthwith. - ii) Issue a Writ of Mandamus or any other Writ, order directing to the 1[st] Respondent to consider Ext P 5 and disburse Rs. 2.57 lakhs of 1[st] year fee and 2.85 lakhs as travelling expenses to the petitioners account forthwith. - iii) Issue a Writ, order or Direction, declaring that pro-rata basis of loan disbursal shall be in accordance with the yearly expenses for the course.” ## 2. After considering the rival submissions, writ court ## held as under: “7. The application of the petitioner for educational loan of ₹7,00,000/- was against the total medical course expenses of ₹29,58,036/-, for the period of study of six years. The petitioner would submit that the Tuition Fee **W.A.No.35 of 2022** **3** for the first year is ₹2.57 lakhs and the petitioner would require another ₹2.85 lakhs for travelling expenses in the First Year itself. The petitioner claims that the respondents shall disburse an amount of ₹5.42 lakhs out of the sanctioned ₹7 lakhs in the First Year itself. 8. Clause 28 of the Terms and Conditions in Ext.P3 Letter of Sanction issued to the petitioner would indicate that the Bank will disburse the loan in stages as per the requirement / demand directly to the school / College / University / Hostel / Institution / Book Seller, to the extent possible. Ext.R1(b) Model Educational Loan Scheme for Pursuing Higher Education in India and Abroad, 2021 formulated by the IBA and followed by the 1st respondentBank, provides that the Bank should ensure that a student is neither over financed or under financed. Therefore, the 1st respondent will be justified in releasing the loan amount proportionately taking into account the requirement in each year. 9. When the petitioner has himself to find resources for payment of ₹29,58,936/- minus ₹7,00,000/-, to meet the educational expenses, every year the petitioner has to raise proportionate fee himself. The petitioner cannot insist that the entire amount of loan sanctioned should be released in the initial academic year/s itself. If that is allowed, it would amount to over financing. The prayer of the petitioner in that regard cannot be allowed.” ## Being aggrieved, instant writ appeal is filed. **W.A.No.35 of 2022** **4** ## 3. Short facts leading to the filing of the appeal are as hereunder: The appellant, along with his parents as co-applicants, applied for Baroda Education loan at 1[st] respondent Bank for his MBBS in Petro Mohyla Black Sea National University, at Ukraine. The total estimated cost of education is Rs. 29,58,936/-, but the appellant required only Rs.7 lakhs, that too, for the first two years. Subsequent to the interventions of this Hon’ble Court, the 1[st] respondent sanctioned the education loan of Rs.7 lakhs. Though the loan is sanctioned, the 1[st] respondent is not disbursing the amount to the account. They orally intimated that only an amount of Rs. 1.16 lakhs will be disbursed as 1/6th of the total loan amount. The contention of the bank is that the pro-rata basis disbursal is calculated by dividing total amount and actual years of course. Against which, the petitioner preferred a petition to the bank requesting to sanction the 1[st] year fee amount in accordance with the fees structure of the College (First year Fee amount of Rs. 2.57 lakhs and Rs. 2.85 lakhs as travelling expenses) and also in accordance with the guidelines issued by the Reserve Bank of India. **W.A.No.35 of 2022** **5** The Exhibit P4 guidelines of RBI points out the objectives of the educational loan scheme. It is stated that the object of the scheme itself is to provide financial support from the banking system to meritorious students for pursuing higher education in India and abroad. The guideline Nos. 5.2 and 5.3 dealt with the studies of abroad. The quantum of finance is also mentioned in the above said model scheme. While assessing the quantum of finance, banks should ensure that a student is neither over financed nor under financed. The terms and conditions - No. 28 also confirms that the loan will be disbursed in stages as per the requirement directly to the college. When challenged, the writ court is of the view that the proportionate amount - loan amount/number of years of course can only be disbursed. This is against the guidelines issued by the Reserve Bank of India. 4. Though Mr.Sherry J. Thomas, learned counsel for the appellant, made submissions on the grounds raised and also invited the attention of this court to the guidelines issued by the Reserve Bank of India, perusal of the same shows that the guidelines only enable the appellant to seek for loan under various heads and it is for the bank to consider. **W.A.No.35 of 2022** **6** ## 5. Clause 5.3 of the guidelines - expenses considered for ## loan, reads as under: ## “ **5.3. Expenses considered for loan** - i. Fee payable to college ++/hostel. - ii. Examination/Library/Laboratory fee. - iii. Travel expenses/passage money for studies abroad. - iv. Insurance premium for student borrower. - v. Caution deposit, Building fund/refundable deposit supported by Institution bills/receipts. - vi. Purchase of books/equipment/instruments/Purchase of computer at reasonable cost, if required for completion of the course. - viii. Any other expenses required to the Course - like academic and maintenance fees, study tours, project work, thesis, exchange programme, etc. - ix. While computing loan required, scholarships, fee waiver etc. if any available to the student borrower while applying for the loan may be taken into consideration. - x. If the scholarship component is included in the loan assessment, it may be ensured that the scholarship amount gets credited to the loan account when received from the government.” 6. Material on record discloses that the total expenses for pursuing the course in Petro Mohyla Black Sea National **W.A.No.35 of 2022** **7** University at Ukraine is Rs.29.58 lakhs. Appellant has sought for a loan of Rs.7,00,000/-. Expenses claimed as detailed in paragraph 12 of the counter affidavit is reproduced: 1[st] 2[nd] 3[rd] 4[th] 5[th] 6[th] Total USD/ AMOUNT Year Year Year Year Year Year INR IN RS. TUITION FEE 3800 3800 3800 4100 4100 4100 23700 72.44 1716828 ACCOMMODATION 700 700 700 700 700 700 4200 72.44 304248 FOOD EXP. 1500 1500 1500 1500 1500 1500 9000 72.44 651960 EXPENSES IN INDIA 285000 TOTAL 2958036 7. Other than the above heads, no other claim has been made. That apart, in the counter affidavit, respondent Bank has also stated that the said amount of Rs.7,00,000/- has to be paid for the entire period of study on pro-rata basis. Averments in paragraph 8 of the counter affidavit on the said aspect is reproduced: “8. The averment of the petitioner in paragraph 4 of the writ petition that the calculation for disbursement of loan account on pro-rata basis by the respondent bank is against the principles of justice and guidelines of the RBI is baseless, untenable and devoid of any merit. Pro-rata essentailly translates to “in proportion”, which means a process where whatever is being allocates will be distributed in equal portions for each year. Hence, in the case of the petitioner, an amount of 7 lakhs is sanctioned to the petitioner for the period of study of 6 years, then the proportionate pro-rata basis of loan amount **W.A.No.35 of 2022** **8** disbursement per year to the 1[st] petitioner will be Rs.1.16 lakhs, per year for the 6 year period.” 8. On the aspect of pro-rata payment, this court, in W.A.No.1281 of 2021 dated 12.10.2021, has upheld the contention of the Bank and accordingly issued orders. For reference, paragraphs 4 to 6 of the judgment in W.A.No.1281 of 2021 dated 12.10.2021 is reproduced: “4. As the first year fee has already been paid by the student, appellant/Bank is directed to pay Rs.1,40,000/- to the respondent/student, within ten days from the date of receipt of a copy of this judgment. 5. As fee for the second years is due, bank is directed to disburse the second year fee/second instalment of loan of Rs.1,40,000/- to the educational institution/Poomulli Neelakandan Namboothiripad Memorial Ayurveda Medical College, Shornur, immediately. Rest of the loan amount shall be remitted to the above institution as per the schedule, namely 3rd year-Rs.1,40,000/-, 4th year-Rs.1,40,000/-, 5th yearRs.1,40,000/-. 6. It is made clear that the affidavit of undertaking dated 9.10.2021 regarding repayment should be complied with, without any fail. In the event of any failure to comply with the undertaking in letter and spirit, the appellant Bank is at liberty to take appropriate action **W.A.No.35 of 2022** **9** under the Scheme.” Giving due consideration to the material on record, we find no error in the impugned judgment, warranting interference. Accordingly, writ appeal is dismissed. Pending interlocutory applications, if any, shall stand closed. Sd/- **S.Manikumar Chief Justice** Sd/- **Shaji P.Chaly Judge** ## **vpv** //true copy// P.A. to Judge