CHENNAI: Default in repayment of individual business loans obtained by parents, who stood as co-applicants, cannot be a ground for refusing disbursement of money to their wards under the educational loan scheme, the Madras High Court held on Thursday.Justice D Hariparanthaman made the observation while disposing of a writ petition from R Sahana, who obtained an education loan of `2.20 lakh from the Oriental Bank of Commerce in Mogappair during 2008-09 for her admission in the first year B Tech (Bio-Technology) course in Rajalakshmi Engineering College in Thandalam. The fees prescribed by the college was `98,000 per year and the bank disbursed `55,000 per year. The balance amount of `43,000 was raised by the petitioner with great efforts. Her parents, who stood as co-applicants, also obtained loans for their business. As they defaulted in repaying the loan amount, the bank stopped disbursing the education loan of `55,000 for 2010-11. Petitioner somehow managed to pay the fees. As it was extremely difficult and almost impossible to mobilise `98,000 for the fourth and final year, Sahana moved the High Court with the present writ petition.The judge observed that the submissions of the petitioner were well founded and the bank could not stop the education loan that too for the fourth and final year. It would frustrate the very purpose of the scheme and if the petitioner discontinued her studfies at this stage, the loan amount lent so far by the bank would become sticky. In its own interest, the bank should see that the petitioner completes her studies, so that it could get back the loan advanced. The scheme stated that irrespective of their means, loan up to `4 lakh should be sanctioned without any security. But, in this case, petitioner’s parents were made to stand as co-applicants for `2.20 lakh. “Therefore, the bank is not justified in refusing to disburse the loan to the petitioner for the final year,’’ the judge observed and directed the bank to disburse the loan forthwith to the college.
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