High Court of KeralaSingle Judge2016-12-20Writ petitions dismissed

Sneha M and Sajin Satheesh v. Reserve Bank of India and others

Case / Petition Number:WP(C).No. 26441 of 2016 (E) and WP(C).No. 26478 of 2016 (E)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Shaji P. Chaly, J.
Judgment Date: 2016-12-20
Court Decision / Holding: Writ petitions dismissed; the banks’ orders declining educational loans are sustained; no relief to petitioners.
Final Disposition: Writ petitions dismissed

Parties to the Case

Appellants / Petitioners

Sneha M, d/o Murukan K, Purayidathil, Valiyepalli P.O., Pala – 686 574
Sajin Satheesh, Chettisseriyil House, Pazhayapanakkachira, Madukka P.O., Erumeli North, Madukka-686 513

Respondents

Reserve Bank of India, represented by the Regional Director, RBI, Thiruvananthapuram
The State Bank of Travancore, represented by its Managing Director, Head Office, Thiruvananthapuram
The Branch Manager, State Bank of Travancore, Pala Branch, Kottayam
The Branch Manager, State Bank of Travancore, Koruthodu Branch, Kottayam (R2 to R4)

Legal Representation & Advocates

Counsels for Petitioners

• Sri Sergi Joseph Thomas

Counsels for Respondents

• Sri R.S. Kalkura, SC

Case Synopsis & Summary

These writ petitions challenge the refusal of the respondents to grant educational loans for pursuing a B.Sc Nursing course in Shimoga, Karnataka. The petitioners, after completing higher secondary education, applied to various branches of State Bank of Travancore for loans to fund studies in India. The banks rejected the applications on grounds that the petitioners did not secure 60% marks and were admitted under management quotas rather than via regular entrance examinations. The petitioners argued that the banks’ denials are unsustainable and contravene the model education loan scheme prepared by the Indian Banks Association (IBA) and the RBI guidelines designed to assist meritorious, financially constrained students pursuing higher education domestically and abroad. The respondents contended that the revised scheme (2011–2012) establishes eligibility criteria including merit (60% marks) and admission through regular processes, with extended repayment periods, and that the banks acted within these parameters. The court examined the scheme, RBI and IBA guidelines, and cited Arya K.R. v. Assistant General Manager (2015) to justify the banking parameters, noting the petitioners’ failure to meet the 60% threshold and management-quota admissions. Consequently, the judge held that the petitioners are not entitled to loans and dismissed the petitions, upholding the banks’ decisions. The decision reflects the balance between policy aims of widening access to education and the banks’ established loan criteria.

Provisions of Law Cited

Article 226, Constitution of India

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that the respondents’ refusal to grant education loans contradicts the model education loan scheme and RBI/IBA guidelines conceived to help meritorious, financially constrained students pursue higher education in India and abroad. They argue that the policy framework, not the limited debt criteria, should guide relief under Article 226, and that the adverse impact of not meeting the 60% threshold should be considered with flexibility in light of merit and need. They rely on Ext.R2 scheme and related master circulars to press for loan entitlement for deserving candidates and highlight that the denial is unfair and potentially inconsistent with the broader objective of educational access.

Contentions of Respondents

The respondents submit that loan eligibility is anchored in the revised IBA model education loan scheme (2011–2012) and related RBI master circulars, which prescribe merit-based criteria (60% marks, 50% for SC/STs), entrance-based admission for regular courses, and appropriate repayment terms. They contend that petitioners admitted under management quota and lacking the required marks fall outside the scheme’s eligibility, and that the Division Bench in Arya K.R. upheld these parameters as lawful. Hence, there is no illegality, arbitrariness, or unfairness in the banks’ decisions; interference under Article 226 is unwarranted.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Arya K.R. and others v. Assistant General Manager and another	2015 KHC 884	Positive	The Division Bench upheld the IBA/RBI scheme parameters (including the 60% merit criterion and regular admission) and held such criteria in accordance with law, supporting the banks’ decisions.
Judgment of the High Court of Madras in W.P.(C).No. 556/2010	W.P.(C).No. 556/2010 (Madras High Court)	Mentioned Only	Exhibited as Ext.P9; referenced but not discussed or treated as governing authority in the present judgment.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **TUESDAY, THE 20TH DAY OF DECEMBER 2016/29TH AGRAHAYANA, 1938** **WP(C).No. 26441 of 2016 (E) ----------------------------** - **PETITIONER(S): -------------** **1. SNEHA M, D/O.MURUKAN K, PURAYIDATHIL, VALIYEPALLI.P.O., PALA - 686 574.** **2. SAJIN SATHEESH, CHETTISERIYIL HOUSE, PAZHAYAPANAKKACHIRA, MADUKKA.P.O.,** **ERUMELI NORTH, MADUKKA-686 513.** **BY ADV. SRI.SERGI JOSEPH THOMAS** **RESPONDENT(S):** - **--------------** **1. THE RESERVE BANK OF INDIA, REPRESENTED BY THE REGIONAL DIRECTOR, RESERVE BANK OF INDIA, P.B.NO.6507, THIRUVANANTHAPURAM-695 033.** **2. THE STATE BANK OF TRAVANCORE, REPRESENTED BY ITS MANAGING DIRECTOR, HEAD OFFICE, P.B.NO.34, POOJAPPURA, THIRUVANANTHAPURAM-695 012.** **3. THE BRANCH MANAGER, STATE BANK OF TRAVANCORE, PALA BRANCH, KOTTAYAM-686 575.** **4. THE BRANCH MANAGER, STATE BANK OF TRAVANCORE, KORUTHODU BRANCH, KOTTAYAM-686 513. R2 TO R4 BY ADV. SRI.R.S.KALKURA, SC** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20-12-2016 ALONG WITH WPC.26478/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **mbr/** ## **WP(C).No. 26441 of 2016 (E) ----------------------------** ## **APPENDIX** **PETITIONER(S)' EXHIBITS: -----------------------** **EXHIBIT P1 : TRUE COPY OF THE HIGHER SECONDARY EXAMINATION CERTIFICATE OF THE 1ST PETITIONER. EXHIBIT P2 : TRUE COPY OF CERTIFICATE ISSUED TO THE 1ST PETITIONER DATED 19.08.2015 BY THE PRINCIPAL OF KARAVALLY COLLEGE, MANGALORE. EXHIBIT P3 : TRUE COPY OF THE COMMUNICATION DATED 21.10.2015 ISSUED TO THE 1ST PETITIONER BY THE CHIEF MANAGER, STATE BANK OF TRAVANCORE, PALA BRANCH. EXHIBIT P4 : TRUE COPY OF THE CERTIFICATE ISSUED TO THE 2ND PETITIONER BY THE DIRECTORATE OF HIGHER SECONDARY EDUCATION. EXHIBIT P5 : TRUE COPY OF THE CERTIFICATE ISSUED TO THE 2ND PETITIONER DATED 10.08.2015 BY THE PRINCIPAL OF KARAVALLY COLLEGE, MANGALORE. EXHIBIT P6 : TRUE COPY OF THE COMMUNICATION DATED 21.07.2015 ISSUED TO THE 2ND PETITIONER AND HIS FATHER BY THE BRANCH MANAGER, STATE BANK OF TRAVANCORE, KORUTHODU BRANCH.** **EXHIBIT P7 : TRUE COPY OF THE AFFILIATION NOTIFICATION DATED 20.11.2014. EXHIBIT P8 : TRUE COPY OF THE MASTER CIRCULAR ON GRANT OF EDUCATIONAL LOANS DATED 20.11.2012 OF THE STATE BANK OF TRAVANCORE. EXHIBIT P9 : TRUE COPY OF THE JUDGMENT OF THE HIGH COURT OF MADRAS IN W.P[C]NO.556/2010.** **RESPONDENT(S)' EXHIBITS: -----------------------** **EXT.R2A: TRUE COPY OF THE EDUCATION LOAN SCHEME ISSUED BY THE RESERVE BANK OF INDIA DATED 2.5.2001 BEARING NO.RPCD.PLNFS.VC.NO.83/06.12.05/2000-01. EXT.R2B: TRUE COPY OF THE COMMUNICATION DATED 31.5.2012 ISSUED TO THE CHIEF EXECUTIVES OF ALL MEMBER BANKS BY THE INDIAN BANKS ASSOCIATION.** **--2--** **--2--** ## **WP(C).No. 26441 of 2016 (E)** **----------------------------** |**EXT.R2C:**|**TRUE COPY OF THE MASTER CIRCULAR BEARING**| |---|---| ||**NO.PSB18/2011 DATED 13.6.2011 RELATING TO SBT**| ||**EDUCATION LOAN SCHEME.**| |**EXT.R2D:**|**TRUE COPY OF THE MASTER CIRCULAR ON EDUCATION**| ||**LOAN BARING NO.PSB 01 OF 2012 DATED 10.1.2012.**| |**EXT.R2E:**|**TRUE COPY OF THE IBA MODEL EDUCATION LOAN SCHEME**| ||**DATED SEPTEMBER 2012.**| |**EXT.R2F:**|**TRUE COPY OF THE MASTER CIRCULAR BEARING**| ||**NO.PSB/23/2012 DATED 20.11.2012.**| |**EXT.R2G:**|**TRUE COPY OF THE REVISED GUIDANCE NOTES**| ||**DATED 31.5.2012 ISSUED BY THE INDIAN BANKS**| ||**ASSOCIATION.**| |**EXT.R2H:**|**TRUE COPY OF THE CENTRAL SCHEME TO PROVIDE**| ||**INTEREST SUBSIDY ISSUED BY THE GOVERNMENT OF**| ||**INDIA, MINISTRY OF HUMAN RESOURCES DEVELOPMENT,**| ||**DEPARTMENT OF HIGH EDUCATION.**| |**EXT.R2I:**|**TRUE COPY OF ORDER NO.8-8/2009-EE.3 OF THE**| ||**GOVERNMENT OF INDIA, MINISTRY OF HUMAN RESOURCES**| ||**DEVELOPMENT, DEPARTMENT OF SCHOOL EDUCATION AND**| ||**LITERACY EE-3 SECTION DATED 14.9.2009.**| |**EXT.R2J:**|**TRUE COPY OF THE ORDER NO.F.11-3/2006-U.5 OF THE**| ||**GOVERNMENT OF INDIA, MINISTRY OF HUMAN RESOURCES**| ||**DEVELOPMENT, DEPARTMENT OF HIGHER EDUCATION**| ||**DATED 8.9.2009 TO M.V.NAIR, CHAIRMAN, INDIAN**| ||**BANKS ASSOCIATION.**| ||**//TRUE COPY//**| ||**P.S. TO JUDGE**| **mbr/** ## **SHAJI P. CHALY, J.** ----------------------------------------------- **W.P.(C). Nos.26441 & 26478 of 2016 ----------------------------------------------Dated this the 20[th] day of December, 2016** ## **JUDGMENT** Captioned writ petitions are concerning refusal of respondents to provide educational loan to the petitioners and therefore, I heard them together and propose to pass a common judgment. Contentions raised in the writ petitions are common in nature and therefore, separate recital of facts are not required. 2. Material facts for the disposal of the writ petitions are as follows; petitioners on completion of Higher Secondary Education had applied before different branches of State Bank of Travancore for educational loan. Petitioners obtained admission to the B.Sc Nursing course in a Nursing College at Shimoga in Karnataka State, an institution recognized by Rajeev Gandhi Institute of Health and Science, Karnataka. According to the petitioners, they got selected on merit basis. However, the banks in which the petitioners applied for loan, negatived their claim, on the ground that, petitioners have not W.P.(C) 26441 & 26478 of 2016 2 obtained 60% marks and that, they were not admitted under the regular system of entrance examinations. It is contended that, the rejection of the loan applications submitted by the petitioners for educational purposes is unsustainable, arbitrary which necessitates interference of this court under Article 226 of the Constitution of India. 3. Respondents have filed separate counter affidavits in the writ petitions denying the allegations and claims and demands raised by the petitioners. It is also submitted that, the applications for loan were considered and rejected by various branches of the bank. That apart, it is contended that, while it is the Government endeavour to provide primary education to all on a universal basis, higher education is progressively moving into domain of private sector. The Finance Minister of India in a meeting with the Chief Executive of the public sector banks on 13/06/2000 highlighted the role of commercial banks in facilitating pursuit of higher education by poor, but meritorious students. Pursuant to the same, Indian Banks Association constituted a W.P.(C) 26441 & 26478 of 2016 3 study group under the chairmanship of Sri.R.J.Kamath, Chairman and Managing Director of Canara Bank to examine the issue in detail. Based on the recommendations of the study group, a comprehensive model educational scheme was prepared by the Indian Banks Association for adoption of the scheme by all banks. The scheme aims at providing financial support from the banking system to deserving/meritorious students for pursuing higher education in India and abroad. The said model education scheme is produced as Ext.R2(a). In line with the announcement made by the Finance Minister in the budget speech for the year 2004 - 2005, Indian Banks Association communicated certain changes in the security norms applicable to education loans with limits above Rs.4 lakhs and upto 7.5 lakhs. The scheme was further modified in the year 2007-2008 based on experience gained in the operation of the scheme over the year. Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division) has considered and decided to accept the model scheme prepared by the IBA for implementation. Thereafter, W.P.(C) 26441 & 26478 of 2016 4 a revised scheme was published and put into operation vide IBA Circular dated 30.8.2011 coming into force w.e.f. September, 2012 wherein, the salient aspects are as follows: - (i) Merit as the sole criteria for eligibility. - (ii) Admission under management quota kept outside the scope of the scheme. - (iii) The quantum of loan was to be justified by employment potential. - (iv) Extension of repayment period to reduce burden on beneficiaries. 4. The above said revised scheme was sent to the Government of India, Ministry of Finance for their perusal and suggestions. Taking into account the modification suggested by the Department of Financial Service, Government of India, the matter was placed before the IBA Managing Committee at its meeting held on 23.8.2011 and the model scheme was circulated to all member banks for adoption and implementation. Thereafter, Exts.R2(a) guidelines was issued to the Chief Executives of all member banks. So also master circular on education loan on various dates issued by the Indian Banks Association and the State Bank of Travancore ## W.P.(C) 26441 & 26478 of 2016 5 are produced along with the counter affidavit and marked as Exts. R2(c) to R2(g). The scheme only provides for granting educational loans to deserving or meritorious students for pursuing higher education in India and abroad. In clause 4.2 of Ext.R2 scheme, student eligibility is clearly prescribed, which are as follows: a) should be an Indian National b) secured admission to professional/technical courses through entrance test/selection process. c)secured admission to foreign university/institutions. d) should have scored minimum 60% (50% for SC/STs) in the qualifying examination for admission to graduation courses. 5. It was on the basis of the parameters provided under the scheme and the circular and guidelines issued by the State Bank of Travancore as well as the Indian Banks Association and also the necessary guidelines issued by the Reserve Bank of India, the respondent banks provide loans to the applicants. It is also contended that the issue with respect to the guidelines prescribed by the bank to provide W.P.(C) 26441 & 26478 of 2016 6 loans only to a student who secured admission on merit with 60% minimum marks in aggregate for qualifying subjects was considered by a Division Bench of this Court in **Arya K.R. and others v. Assistant General Manager and another** [2015 KHC 884] and held the parameters and stipulations provided so by the bank is in accordance with law, which cannot be interfered with by the court in a writ proceedings. Even though, petitioners have a case that, they have secured admission on merits, the documents produced and the pleadings put forth by the respondents show that, admissions were secured by the petitioners in the college in question, under the management quota. Moreover, petitioners are not having 60% marks, which are the bench marks provided by the respondent bank to provide educational loan. 6. Heard learned counsel for petitioner, learned Standing Counsel for bank and perused the documents on record and the pleadings put forth by the respective parties. 7. The discussions made above are self-explanatory. Even though, petitioners have a case that, they are entitled as W.P.(C) 26441 & 26478 of 2016 7 of right to secure educational loan in view of the guidelines provided by the RBI, I am of the considered opinion that, since respondent banks have made certain stipulations in respect of the grant of educational loan and the same was upheld by a Division Bench of this court in the judgment referred supra, the petitioners are not entitled to secure loans from the respondent bank since they did not have the eligible criteria as provided under the scheme prepared for the purpose and the circular and guidelines issued therein. Therefore, I do not find any reason to interfere with the impugned orders passed by the respondent banks declining educational loan to the petitioners. I also do not find any illegality, arbitrariness or unfairness on the part of the respondents to provide educational loan to the petitioners. Resultantly writ petitions fail and accordingly they are dismissed. Sd/- **SHAJI P. CHALY JUDGE** smv 21.12.2016