J U D G M E N T

Petitioner, who is a second year MBBS Student, is aggrieved by the rejection of her application for educational loan.

2. It is stated that the petitioner passed SSLC as well as the Higher Secondary Examination with very high marks with A+ Grade in all the subjects and obtained admission for MBBS in the State merit quota in the 3rd respondent College. As the petitioner's family found it difficult to remit the fee for the MBBS course, she submitted Ext.P6 application for educational loan, with her father as the co- applicant. In the application property in the name of her father having an extent of 6.070 Ares along with the residential house was offered as security. However the second respondent did not take any positive action though it was assured that it would be processed and loan would be sanctioned. The petitioner points out that it is only because of Ext.P9 proceedings before the Munsiff Court in execution proceedings in PLP No.21001 of 2016 that the respondents did not sanction the loan. It is stated that the said proceedings relates to a case where her father stood as a guarantor for a loan availed by one Smt. Jeeja from Kerala Gramin Bank and that cannot be a relevant factor or reason for denial of educational loan.

3. Learned Standing Counsel appearing for respondents 1 and 2 have filed a statement. It is stated that on examining the application submitted by the petitioner it was found that the CIBIL score of petitioner's father, who is the co-applicant, was reflected as “Suit filed (Wilful Default)”. Relying on Annexure R1(1) Circular issued by the State Bank of India it is stated that “if the account Status for a secured loan/unsecured loan/credit card is (i)Suit Filed, (ii) Wilful default (iii) Suit filed (Wilful Default), (iv) Suit Filed & Written-off, (v) Wilful default & written off or (vi) Suit Filed (wilful default) and written off, the applicant's proposal may be rejected. While considering the application of the petitioner it was found that father of the petitioner was a CIBIL defaulter on his account status as it was shown as Suit Filed (Wilful Default) and therefore the application was rejected.

4. Learned counsel for the petitioner relied on the judgments of this Court in W.P.(C).No.24763 of 2020, 26953 of 2015 and W.A.No.2325 of 2015 in support of his contention that the respondent Bank instead of denying the educational loan arbitrarily, ought to have sanctioned the same.

5. Having heard the contentions on either side it is seen that the only ground for not considering the application for loan in her favour is the account status of the petitioner's father on the basis of Ext.P9 where petitioner's father stood as a guarantor. This Court has in a series of judgments including W.P.(C).Nos.19248 of 2019, 10968 of 2020, W.A.No.2325 of 2015, etc., held that poor CIBIL score cannot be a ground for denying educational loan to a meritorious student. As held in those cases and also in the judgment in W.P.(C) No.24763 of 2020, the criteria based on which the education loan is to be sanctioned should be the possible earning capacity of the student depending upon the course which she/he is pursuing.

6. Ext.P5 scheme for educational loan was floated by the Indian Bank Association in tune with the policy decision of the Central Government and in tune with the guidelines of the Reserve bank of India for the very purpose of providing financial support from the banking system to meritorious students for pursuing higher education in India and aboard. In Clause 2 of Ext.P5 Scheme emphasis is given to see that a meritorious student is not loosing the opportunity to pursue higher education for lack of financial support. Therefore the Circular Annexure R1(1) cannot override the provisions contained in the Model Education Loan Scheme.

7. In the present case petitioner is a student who got admission to MBBS in the State of Kerala itself and there cannot be any scope for any doubt regarding the earning capacity of a