The main legal point established in the judgment is the court's emphasis on the jurisdiction of the Banking Ombudsman, the statutory right of the bank to exercise bankers lien, and the lack of deficiency in service.

1. With the consent of parties, the two writ applications have been heard together in details for final disposal at the stage of admission itself.

2. The first writ application that is CWJC No. 15675 of 2004 has been filed by United Commercial Bank ("UCO Bank" for short) challenging the validity of the order dated 31.3.2003 passed by the Banking Ombudsman under the Banking Ombudsman Scheme, 1995 (hereinafter referred to as "the Scheme") in relation to a dispute as between UCO Bank and the Bihar State Food and Civil Supplies Corporation (hereinafter referred to as "the Corporation"). The second writ application that is CWJC No. 11680 of 2004 has been filed by the Corporation for implementation of the award/order dated 31.3,2003 passed by the Banking Ombudsman which is impugned in the first writ.

3. Heard Shri S.D. Sanjay, learned counsel for the UCO Bank, Shri R.S. Pradhan, Senior Advocate for the Corporation and Shri Tarakant Jha, learned Senior Advocate on behalf of the Reserve Bank of India.

4. The question for consideration before this Court is whether the Banking Ombudsman under the Scheme had the jurisdiction to entertain the complaint of the Corporation and whether the said complaint is not entertainable in view of the provisions of Clause 16(3)(a) of the Scheme having been laid more than a year after Bank had rejected the representation of the Corporation as well as in terms of Clause 16(3)(d) of the Scheme which bars a complaint on same subject matter for which any proceeding before any Court Tribunal or Arbitrator is pending or a decree has already been passed by any such Court, Tribunal or Arbitrator. The question of enforceability of award would be consequential upon whether the award itself is legal and valid.

5. As noticed by the Apex Court in the case of United Commercial Bank vs. Bank of India and Ors. (1981)2 Supreme Court Cases 766, the facts of the case are somewhat complicated. In the said decision as between the same parties, the facts have been detailed and, therefore, l will not refer to them in much detail except to point out the controversy which led to the impugned order of the Banking Ombudsman. M/s Godrej Soap Limited (not a party in these proceedings before this Court) had in 1978 agreed to supply the Corporation one thousand metric tonnes of "Sizola" brand pure mustard oil for a total value of approximately rupees eighty six lacs. The contract provided, inter alia, that the Corporation will open a letter of credit with the Bank for the said amount. Bank of India, Bombay was the bankers for M/s Godrej Soap Limited and UCO Bank was the bankers of the Corporation. Under the terms of letter of credit, on despatches of mustard oil in specified lots, the documents had to be submitted by M/s Godrej Soap Limited through their bankers Bank of lndia to UCO Bank. UCO Bank was then bound under the letter of credit to pay the amount to the Bank of lndia for deliveries effected by Godrej Soap Limited. It would, thus, be seen that by virtue of letter of credit, there was a contractual obligation as between the two banks and as between the buyer and seller that is the Corporation and the Godrej Soap Limited, there was a contract for buying and selling mustard oil. It appears that M/s Godrej Soap Limited despatched, from time to time, certain quantities of mustard oil and presented the documents to their bankers for release of payment from UCO Bank on basis of letter of credit. UCO Bank in turn, agreed to honour the documents "under reserve". This expression "under reserve" in normal banking terms specifies "it was paid under reserve on account of discrepancies". It, in simple language means that it is being paid under protest and if discrepancies in documents is material, the payment is likely to be recalled which would be honoured. It would, thus, be seen that Godrej Soap Limited got virtually fully payment of about rupees eighty six lacs. It appears that UCO Bank then approached the Corporation who rejec