HC asks bank to release shop mortgaged for student loan
Coming to the aid of a Zirakpur-based family harassed at the hands of a bank, the Punjab and Haryana high court directed the Punjab National Bank, Chandimandir, to release their shop which was mortgaged while taking an education loan for sending their son abroad.chandigarh Updated: Jun 04, 2014 15:38 IST
Coming to the aid of a Zirakpur-based family harassed at the hands of a bank, the Punjab and Haryana high court directed the Punjab National Bank, Chandimandir, to release their shop which was mortgaged while taking an education loan for sending their son abroad.
Disposing of the petition filed by Zirakpur couple Ravinder Sharma, 62, and Shiristi Sharma, 55, facing proceedings under the securitisation and reconstruct i on of financial assets and enforcement of security interest act, the division bench on May 29 directed the bank “to release the shop within a period of one week and return property documents”.
To advance the career of their son, the couple applied for a loan of ` 13 lakh in 2006. In order to ensure due repayment of the loan, a small chemist shop measuring 50 square yards was mortgaged, which had an estimated value of ` 15.1 lakh at the time the loan was granted to them.
Their son decided to transfer his studies from Victoria University, Melbourne, to Meridian Inter national Hotel School, Melbourne.
Owing to the slowdown in the economy and bad health of their son, the couple defaulted in complying with their financial obligation and the account was declared non-perfor ming asset.
The bank had already initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, when they approached the high court.
Coming to the aid of parents, the high court called on the bank to take a sympathetic view, as it was an education loan, considering that the student who availed of the loan himself was not keeping well and due to lack of employment opportunities in the country.
“The principle applicable to commerce and trade loans cannot be applied to education loans. A greater compassion is required for it.The shop is also not running on the account of the ceiling action taken by the bank,” observed the high court, while directing bank to release the shop within a week.