The repayment capacity of the student after education should be the deciding factor for granting an educational loan, as per the RBI guidelines and the Indian Banks' Association Model Scheme.

JUDGMENT :

Anu Sivaraman, J.

1. This writ petition is filed seeking the following prayers

"i) To call for the records leading to Ext. P4 and P6 from the Respondents and issue a writ of certiorari or other appropriate writ order of direction quashing Ext. P4 and P6 orders declining Education Loan to the Petitioner.

ii) To Issue a writ of mandamus or other appropriate order or direction commanding the Respondents to sanction and disburse Education Loan Rs. 5,70,000/- to the Petitioner for his 4 Years B.Tech Course in Dhanalakshmi Srinivasan College of Engineering, Perambalur, Tamil Nadu within a stipulated time as directed by this Hon'ble Court.

iii) To declare that the Petitioner is entitled to get sanction and disburse Education loan Rs. 5,70,000/- for his 4 Years B.Tech Course In Dhanalakshmi Srinivasan College of Engineering, Perambalur, Tamil Nadu."

2. Heard the learned counsel for the petitioner, learned standing counsel appearing for the 1st respondent bank and the learned counsel for the 2nd respondent.

3. It is submitted that the petitioner, a 1st year B.Tech student in Food Technology had applied for an education loan for pursuing his studies in an Engineering College in Tamil Nadu. It is stated that the application had been declined as per Exhibit P4 order on the ground that the CIBIL report of the petitioner's father showed that there was a default in a commercial vehicle loan availed by him. It is submitted that in the hope of getting the education loan sanctioned, the petitioner's father closed the commercial vehicle loan and got the fact endorsed in the registration particulars of the vehicle. It is submitted that even thereafter and after the closure of the loan was brought to the notice of the 1st respondent, the application for education loan was declined by Exhibit P6 stating that the credit history of both the parents reveal multiple default.

4. The learned counsel for the petitioner submits that after the default had been cleared, the continued rejection of the education loan on the ground of past default is completely illegal. Reliance is placed on Exhibit P7 judgment of the Madras High Court as well as Exhibit P8 judgment of this Court where directions had been issued to grant education loans in similar circumstances.

5. A counter affidavit has been placed on record by the 1st respondent. It is submitted therein that the writ petition to release an education loan is not maintainable. It is stated that while processing the loan application submitted by the petitioner it was seen that the petitioner's parents had earlier been sanctioned vehicle loans, cash credit loans and gold loans from the State Bank and from other banks. It is stated that the vehicle loan was repaid only after the loan became overdue. The cash credit loan has become NPA on multiple occasions and the credit history of the petitioner's parents did not permit the sanction of the educational loans. Exhibit R1(a) model education loan scheme of the Indian Banks Association and Exhibit R1(b), Office Memorandum prescribing guidelines issued by the State Bank of India are relied on to contend that the credit score is liable to be taken into account where education loan is sought for prosecution of studies in management quota in colleges outside the State. It is further contended that the CIBIL score of the petitioner's father and mother which are produced as Exhibits R1(c) and R1(d) respectively do not justify the grant of loan.

6. The learned counsel appearing for the 2nd respondent would submit that Exhibits R1(c) ad R1(d) are not issued by the 2nd respondent and the characterisation of those documents as CIBIL scores is completely unwarranted. It is contended that the petitioner's father had availed a commercial vehicle loan from ICICI bank which had been closed and it is further stated that the 2nd respondent had not submitted any adverse credit report to the 1st respondent to justify the contentions in the counter affidavit.

7. I have considered the