Nagpur: While those who defaulted on loans worth thousands of crores are walking free on foreign shores, a local charitable trust is facing consequences of a financial decision gone wrong. In probably the first such reported instance in the city, a state board school has been sealed off by a big private sector bank for defaulting on repayment of a Rs17.5 lakh loan.
Trustees of Navyuvak New English Medium School (near Hudkeshwar) failed to pay instalments for two years following which the bank initiated seizure proceedings as per law.
Rajendra Patne, school’s trustee, said, “The original loan was for Rs12.5 lakh but current outstanding dues have mounted to Rs17.5 lakh. I am unable to pay because my school’s enrolment has dropped drastically in the last five years and affected revenue. From a peak enrolment of 450 students some years ago, we are now down to just 80,” he said.
The bank took possession of the school about two weeks ago, according to Patne. “I removed all the furniture and related material and gave the property’s possession to the bank. They have given me time till March end to find a buyer for the property and clear off the dues, failing which the bank will auction it off,” said Patne.
The low-budget school charges anywhere between Rs200-500 per month and stands on a small plot of 1500 square feet. “I have permission for Std I to VII with ample space which includes parking. It may seem difficult to imagine that but when you visit the school you will see the way we have constructed it, there’s maximum utilization of space,” said Patne.
With the bank seizing the property, the school is unable to process RTE admissions. Shahid Sharif, founder of NGO RTE Action Committee, said, “Students who were allotted this school under RTE will now have to apply somewhere else because no one can say when, if at all, the school will start. This is a failure of the system. If the education department had followed the process of recognition of schools then even the financial health of the institute would have been checked.”
According to Patne, the property’s market value is around Rs80 lakh, against the outstanding loan of Rs17.5 lakh. “I am trying to find a buyer so that the loan can be paid off and the remaining cash can be used to restart the school on a smaller scale somewhere else,” he said.
