Tamil Nadu - Madurai   

Loan: HC Bench raps bank

MADURAI: The Madras High Court Bench here has come down heavily on a nationalised bank for refusing to disburse the second instalment of an education loan availed by a Dalit student undergoing a Master's degree in physiotherapy at a college in Coimbatore just because he had failed in one subject in the first year of the course.

Allowing a writ petition filed by the student hailing from Tirunelveli district against Canara Bank, Justice P. Jyothimani said that the banks were not showing mercy on students by advancing educational loans which were anyway repayable to the bank like any other loan but for some concessions such as an extended repayment period.

He pointed out that neither the scheme under which educational loans were granted nor the guidelines issued by the Reserve Bank of India in this regard created any kind of impediment on continuing loan facility for students who had failed in a subject while undergoing the course. Denying loan on such grounds would amount to “causing a gross social injustice,” he said.

The judge further stated that the bank had extended a loan of Rs. 75,000 to the petitioner as against the first-year course fee of Rs.1.11 lakh only after taking note of his solvency and that of his guarantors. In such circumstances, it was not proper to deny the claim of Rs. 75,000 more for partly meeting the second-year course fee of Rs. 1.12 lakh.

“Such a conduct of the bank cannot be an appreciable stand,” Mr. Justice Jyothimani said and pointed out that the bank had even failed to enter appearance through their counsel to argue the present case despite having received a private notice issued by the petitioner's counsel, with the permission of the High Court, informing it about the details of the case.

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