Purushan K v State Bank of India, Ullala Branch

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MR.JUSTICE VIJU ABRAHAM MONDAY, THE 31[ST] DAY OF JULY 2023 / 9TH SRAVANA, 1945** **WP(C) NO. 6148 OF 2023** ## **PETITIONER:** PURUSHAN K,AGED 56 YEARS S/O KUNJAN,MOONNU THYKKAL, THALAYAZHAM PO, THALAYAZHAM VILLAGE,VAIKOM, KOTTAYAM DISTRICT, PIN - 686141 BY ADV V.VISAL AJAYAN ## **RESPONDENT:** STATE BANK OF INDIA ULLALA BRANCH,THALAYAZHAM ROAD, THALAYAZHAM,KOTTAYAM DISTRICT,PIN - 686607 REPRESENTED BY IT'S MANAGER, BY ADV AMAL GEORGE THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **W.P.(C).No.6148 of 2023 2** ## **VIJU ABRAHAM,J** ## **----------------------W.P.(C).No.6148 of 2023 ---------------------------Dated this the 31[st] day of July, 2023** ## **JUDGMENT** The petitioner is an ex-serviceman, who is an account holder of the respondent bank. The petitioner retired from the service on 31.5.2004 and his monthly pension is being credited to the account with the respondent Bank. Jai Jawan pension loan is a Scheme which was established for the pensioners of Armed Forces and as per the scheme the ex-servicemen pensioners of all category can be avail Pension Loan under SBI Pension Loan Scheme. 2. The petitioner approached the respondent for availing pension loan on 14.12.2022 and the respondent notified the petitioner that he had not met the requirements under the CIBIL Score to be eligible for a loan from the bank due to his inability to repay the loan. Petitioner relying on Ext.P2, copy of the relevant pages of the Master Circular Pension Loan dated 31.08.2019, would contend that there is no stipulation for any CIBIL ## **W.P.(C).No.6148 of 2023 3** Score and only eligibility condition as per Ext.P2 is that the applicant should be a pensioner from the Armed Forces. Petitioner has a further contention that the pension of the petitioner is regularly credited to his account with the respondent and therefore the bank can deduct the amount towards monthly EMI from that account. 3. A detailed counter affidavit has been filed on behalf of the respondent in which it is stated that Ext.P2 Master Circular is one dated 31.8.2019 which has been replaced by Ext.R1(A), which was the circular in force at the time when the petitioner had availed the loan. On the strength of Ext.R1(A), it was contended that a CIBIL report has been insisted for grant of loan and further that in respect of Jai Jawan Pension Loan all other terms and conditions as per Regular Pension Loan Scheme are also made applicable, which means that a valid CIBIL Score is also required even for Jai Jawan Pension Scheme. Learned Standing Counsel referring to Annexure-7 of Ext.R1(A) relating to the CIBIL/CIC report, would submit that if the account ## **W.P.(C).No.6148 of 2023 4** status for a secured loan is shown as written off then the loan proposal is to be rejected. The contention of the Standing Counsel is that to assess the creditworthiness of the petitioner and to evaluate whether the petitioner is eligible for the grant of pension loan as per Ext.R1(A) circular, the respondents had obtained Credit Report from CIBIL and Experian as per Ext.R1(B) and the said document would reveal that the petitioner has a poor credit rating. The CIBIL Credit Vision Score and Personal Loan Score of the petitioner is only 533 and 555 respectively and the Experian score is only 549. Further in Ext.R1(B) report the account history of a business loan (General) availed by the petitioner shows that a sum of Rs.7,62,462/- has been written off. For the reason that the petitioner has a low CIBIL Score and that the earlier loan availed by the petitioner was defaulted and the same has been written off, the petitioner is ineligible for sanction of the loan as per Ext.R1(A) Master Circular. 4. Petitioner refers to the judgment in _**Kiran**_ ## **W.P.(C).No.6148 of 2023 5** ## _**David v. Assistant General Manager, State Bank of**_ _**India, Tvm and Another (2022 (2) KHC 373)**_ to contend for the position that the Court has considered the issue regarding low credit score in respect of Education Loan and held that rejection of application for educational loan for the reason that the parents/co-applicant do not have requisite credit score is totally unjustified. Petitioner also relies on the judgment in _**Pranav S.R v.**_ ## _**Branch Manager State Bank of India and Another (2020 KHC 4695)**_ . 5. The learned Standing Counsel would submit that the decision in _**Kiran David'**_ s case cited supra is in respect of an educational loan, was challenged by the bank in WA No.1086 of 2023 and the implementation of the judgment has been stayed and the writ appeal is now pending consideration. The learned Standing Counsel relies on the judgment in ## _**Nizamudheen P. v. Union of India reported in (2023**_ _**(3) KLT 251)**_ , paragraph 23 of the judgment, which reads as follows: _“(23) To put it otherwise, any lending institution has the liberty or choice not to join_ ## **W.P.(C).No.6148 of 2023 6** _the scheme, but to proceed ahead with the formulations framed by it or the IBA Scheme in order to provide the education loan. Therefore, taking into account the facts and figures and the features of the notification of the Government of India, I am of the view that the contention advanced by the petitioner relying upon the notification, that the respondent bank is liable to grant education loan upto Rs.7.5 lakhs without any guarantee,collateral security etc., cannot be sustained under law. Therefore, if and when the bank has a policy in the matter of granting and releasing education loans, necessarily, an applicant has to follow the same. There is also no case for the petitioner that the conditions streamlined by the bank for grant and release of education loans is in any way illegal or void, or otherwise than the terms and conditions contained in the notification issued by the Government of India dated 16/9/2015. I am of the view that since the bank and its officials are discharging a public duty even while granting and releasing education loans, they are duty bound to follow the procedure and the guidelines fixed for the purpose,in larger public interest, and to protect the interest of the bank, especially in the matter of repayment. Moreover, whenever a decision is taken by the bank in the matter of granting and releasing loans, it is a policy decision of the bank; which can only be interfered with by this Court exercising the powers of discretionary relief conferred under Article 226 of the Constitution of India, only if the writ petitioner was able to establish that the policy formulated by the bank is illegal, arbitrary, irrational or mala fide. There is no case for the petitioner that the policy of the bank suffers from any such vice.”_ 6. After hearing both sides, I am of the opinion that valid reasons have been given by the bank for not sanctioning the loan to the petitioner. The petitioner does not have the required CIBIL score and that he has defaulted repayment of an earlier loan which has been later written off by the bank and therefore makes him ineligible for sanction of a loan as per the terms ## **W.P.(C).No.6148 of 2023 7** of Ext.R1(A) circular. The sanction of a loan is purely a commercial decision of the bank which was in accordance with the circulars issued in this regard. Since the petitioner was found ineligible as per the terms of the circulars, request for grant of loan was rejected by the bank. In view of the same, I am not inclined to interfere with the rejection of the loan to the petitioner and the above writ petition is accordingly dismissed. sd/- **VIJU ABRAHAM, JUDGE** pm ## **W.P.(C).No.6148 of 2023 8** ## **APPENDIX OF WP(C) 6148/2023** PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE EX-SERVICEMEN IDENTITY CARD DATED 14.06.2004 ExhibitP2 TRUE COPY OF THE RELEVANT PAGES OF THE MASTER CIRCULAR PENSION LOAN DATED 31.08.2019 ExhibitP3 TRUE COPY OF THE REQUEST FOR PENSION LOAN DATED 14.12.2022 SUBMITTED BY THE PETITIONER WITH THE RESPONDENT ExhibitP4 TRUE COPY OF THE REPLY LETTER DATED 09.02.2023 MADE BY THE RESPONDENT TO THE PETITIONER RESPONDENT EXHIBITS Exhibit R1(A) True photocopy of the relevant pages of the Master Circular Pension Loans updated up to 28/02/2022 along with Annexure VII Exhibit R1(B) True photocopy of the Consolidated Consumer Credit Report of the petitioner dated 12/12/2022 obtained from CIBIL and Experian