Refers guidelines issued by banks' association to Division Bench

The Madras High Court Bench here on Wednesday disagreed with revised guidelines issued by Indian Banks Association (IBA) on September 16 last year wherein it was stated that educational loans cannot be granted to students who had secured less than 60 per cent of marks in qualifying examinations and obtained seats in private educational institutions under management quota.

Passing interim orders in a writ petition filed by an engineering student, son of a fireman, Justice K.K. Sasidharan referred the matter to a Division Bench for delivering an authoritative pronouncement as another single judge of the High Court in a case decided last year had upheld the IBA's revised guidelines and ruled that non-meritorious students cannot claim educational loan as a matter of right. Giving reasons for taking a stand against IBA's guidelines, Mr. Justice Sasidharan said that a similar proposal mooted by the IBA was rejected by the Centre in 2001 when a model scheme for disbursing educational loans was formulated. In such circumstances, there was nothing on record to prove that the revised guidelines issued last year had been approved by the Centre.

“The Association (IBA) should have taken Government of India into confidence before amending the Scheme and incorporating drastic conditions which would go against the decision taken by the Government of India during the year 2001,” the judge said. He also pointed out that students had to approach private institutions as the government was not in a position to provide educational opportunities to all.

“The failure on the part of the Government to provide seats alone made the students approach the private institutions and they managed to get admission under management quota. It was essentially an involuntary act. There is no logic in denying the benefits of educational loan scheme to those students who were admitted under management quota.

“The Government is primarily responsible for this sorry state of affairs… Merely because a student obtained admission under management quota, it cannot be said that the admission was not on the basis of merit. The private Institutions are also now conducting entrance examinations and in fact, it is very difficult to get admission in some of the reputed private educational institutions,” the judge said.

Further in a veiled reference to Kingfisher Airlines, the judge said: “The banks are eager to extend support to cash strapped and crisis-ridden Kings. It is a pity that banks who have invested 1457.78 crore in a struggling firm are waging a legal war against a poor student, unmindful of the fact that his request was to sanction only a paltry sum.

“The banks are not prepared to bail out poverty stricken and socially and economically disadvantaged sections. The portals of the Court should be opened to give a helping hand to these have-nots. If the Courts were to follow a strict interpretation of Schemes framed by the Indian Banks Association in the matter of financial assistance to students, the constitutional guarantee and the directive principles of State policy would remain an illusion insofar as the poor are concerned.”