Belated application, no ground to deny education loan: Madras High Court

Date:29/05/2010 URL: http://www.thehindu.com/2010/05/29/stories/2010052950980600.htm Back

Tamil Nadu - Madurai

Belated application, no ground to deny education loan: HC

Mohamed Imranullah S.

Banks bound to examine plea for grant of educational loans

MADURAI: Nationalised banks cannot deny educational loan to a student on the ground that the loan application had been made belatedly after the commencement of the academic year, the Madras High Court Bench here has ruled.

Allowing a writ petition filed by an engineering student from Kanyakumari district, Justice T.S. Sivagnanam said that banks were bound to examine the plea for grant of educational loans bearing in mind the laudable object of the Model Educational Loan Scheme framed by the Union Government.

The petitioner, S. Sugitha, said that she completed her Plus Two in March 2009 and secured admission in a private engineering college through counselling conducted by Anna University. However, her father, a farm labourer, could not afford the course fee of Rs.3,10,400 for the four-year course. She decided to avail herself of an education loan from the State Bank of Tranvancore, Peyode branch in Kanyakumari district, and obtained an application form after great difficulty.

No response

Even after that, the bank did not sanction the loan and a representation made to the Collector also did not evoke any response.

On the other hand, counsel for the bank contended that the loan application was filed in December 2009 and hence it would be considered from the second year of the course onwards, subject to the condition that the applicant should score good marks in the forthcoming examinations.

Disagreeing with the condition imposed by the bank, Mr. Justice Sivagnanam said that the High Court had held, as early as in 2007, that poor academic record of a student could not be cited as a reason for refusing to grant education loan because it would amount to underestimating the ability of the candidate.

The judge also pointed out that the Model Educational Loan Scheme stated that development of human capital was a national priority and loans for education should be seen as an investment for economic development and prosperity.

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