Manjula Chellur, J.

1. This appeal is preferred by the 1st respondent before the learned single Judge in W.P. (C) No. 270/12. Respondents 1 and 2 herein are the parents of one Ms. Jwala who approached the appellant/bank for an education loan. It is not in dispute, a sum of Rs. 3,32,000/- was sanctioned as education loan as early as 2004. They borrowed the said loan for the purpose of their daughter's B.Sc. Nursing Course at the Vivekananda College of Nursing, Bangalore. After completing the three years course of study, as the institution imparting the course did not have recognition by the authority concerned, the daughter of the writ petitioners was not allowed to appear for the public examination. Ms. Jwala and other similarly placed students got admitted to other institutions having recognition. Therefore, she joined another college in September 2007. By this time the entire loan was availed of. Later when the loan was not repaid, revenue recovery proceedings were initiated against Ms. Jwala and her father. The writ petitioners approached the learned single Judge challenging the revenue recovery proceedings on various grounds. According to them, in terms of the Scheme, repayment of loan would start only one year after completion of studies or after 6 months of getting employment. The second contention is that the writ petitioners, though parents of Ms. Jwala, are in no way connected with the loan availed of. Therefore, they are not liable for any action under revenue recovery proceedings. The authorities in charge of the revenue recovery proceedings are not entitled to attach the property of the parents of the student and they have only one property, their residential house, where they are residing. It is further contended that the property belongs to the 1st petitioner-the mother of Ms. Jwala, who has nothing to do with the loan and she did not even stand as surety or guarantor for the borrowers.

2. The defence of the appellant/bank is that the duration of the course was 4 years and the loan was availed of in 2004. The moratorium period of one year has already expired and even after the expiry of such period, no repayment was made. Hence the bank was entitled to proceed against the writ petitioners. According to the appellant/bank, loan was availed of by the student as well as the guardian. It is stated that the documents indicate that the 2nd writ petitioner, the father of the student, had also singed the loan papers as guardian of his daughter and therefore the appellant/bank was justified in proceeding against the second writ petitioner as well.

3. After strenuous arguments advanced on behalf of the writ petitioners and the 1st respondent/bank, the learned Single Judge proceeded to consider the entire matter and ultimately allowed the Writ Petition quashing the revenue recovery proceedings initiated against the parents of Ms. Jwala and held that the appellant bank is entitled to continue recovery proceedings against Ms. Jwala.

4. According to learned Single Judge, a Model Educational Loan Scheme has been approved by the Reserve Bank of India (for short 'RBI') with necessary modification and no surety can be insisted upon for loan upto Rs. 4 lakhs. Further it is clear that collateral security or co-obligation of parents/guardian need be furnished only for loans above Rs. 4 lakhs. Therefore, the bank was bound by the directions issued by the Reserve Bank of India. Hence the appellant/bank ought not have initiated proceedings under the Revenue Recovery Act against the parents of the students as they will not be liable in any manner if the loan amount was less than Rs. 4 lakhs. The learned Single Judge further opined that the loan should have been granted to the student on her own application only and without surety of the parents. Therefore the bank was not entitled to proceed against the second writ petitioner-father of the student who had signed the loan documents and such action on the part of the appellant/bank a