Back
BHASKAR BHATTACHARYA AND RUDRENDRA NATH BANERJEE, JJ.
Oriental Carbon and Chemicals Limited and Anr.
v.
Banking Ombudsman, Calcutta and Ors.
A.P.O.T. No. 688 of 2004 and A.P.O. No. 340 of 2006 and W.P. No. 1830 of 2003
Decided on : 16 -7 -2007
BANKING OMBUDSMAN - JURISDICTION - EXCESS INTEREST CLAIM - WRIT PETITION - MAINTAINABILITY - LIMITATION - Banking Ombudsman lacks jurisdiction to adjudicate claims exceeding Rs. 10 lakhs. Writ petition seeking refund of excess interest paid to the bank is not maintainable if the claim is barred by limitation.
Fact of the Case:
Appellant-company obtained credit facilities from Respondent-bank, a member of a bank consortium. Appellant alleged that the bank charged interest at a rate higher than that stipulated in the consortium agreement and the Reserve Bank of India (RBI) guidelines. Despite appellant's representations, the bank refused to refund the excess interest. Appellant filed a complaint with the Banking Ombudsman, who declined to adjudicate the matter due to lack of jurisdiction. Appellant then filed a writ petition challenging the Ombudsman's decision and seeking various reliefs, including a direction to the bank to refund the excess interest.
Finding of the Court:
The court held that the Banking Ombudsman lacked jurisdiction to entertain the appellant's claim as it exceeded Rs. 10 lakhs. The court further held that the appellant's writ petition was not maintainable as the claim for refund of excess interest was barred by limitation. The court observed that the appellant had failed to establish that it had an existing legal right to enforce on the date of filing the writ petition.
Issues: 1. Whether the Banking Ombudsman had jurisdiction to entertain the appellant's claim for refund of excess interest exceeding Rs. 10 lakhs. 2. Whether the appellant's writ petition was maintainable despite the claim being barred by limitation.
Ratio Decidendi: 1. The Banking Ombudsman Scheme, 2002, limits the Ombudsman's jurisdiction to claims not exceeding Rs. 10 lakhs. In the present case, the appellant's claim exceeded this limit, and therefore, the Ombudsman lacked jurisdiction to adjudicate it. 2. A writ petition is maintainable only if the petitioner has an existing legal right to enforce on the date of filing the petition. In the present case, the appellant's claim for refund of excess interest was barred by limitation, and therefore, the appellant had no existing legal right to enforce. Consequently, the writ petition was not maintainable.
Final Decision: The court dismissed the appellant's writ petition, holding that the Banking Ombudsman lacked jurisdiction to entertain the claim and that the writ petition was not maintainable due to limitation.
BHASKAR BHATTACHARYA, J. :- This mandamus-appeal is at the instance of the unsuccessful writ-petitioners and is directed against order dated September 23, 2004 passed by a learned single Judge by which his Lordship disposed of a writ-application by holding that the Banking Ombusdsman exceeded its jurisdiction in making observation on the merit of the claim of the writ-petitioners when it rejected the complaint on the ground of want of jurisdiction.
2. The appellants before us filed a writ-application against the respondents by which they claimed the following relief :
"a) A Writ of or on the nature of Mandamus do issue commanding the respondent No. 1 to forthwith review and/or rescind and/or withdraw and/or cancel the order dated April 25, 2003 and/or in any event, the observations contained therein relating to the merits of the claim of the petitioner No. 1 against the respondent No. 2;
b) A Writ of or in the nature of Mandamus do issue commanding the respondent that the Reserve Bank of India's guidelines relating to rates of interest chargeable by memberrs of consortium of banks are adhered to and followed by the respondent No.2;
c) A Writ of or in the nature of Mandamus do issue commanding the respondent No. 2 to forthwith review and/or rescind and/or revoke and/or cancel its claim against the petitioner No. 1 on the basis of interest rates higher than the rate applicable to the relevant consortium of banks;
d) A Writ of or in the nature of Prohibition do issue restraining the respondent No.1 from giving any effect or further effect to the order dated April 25, 2003 at least in so far as the observations contained therein relating to the merits of the claim of the petitioner against the respondent No. 2;
e) A Writ of or in the nature of Prohibition do issue restraining the respondent No. 2 from claiming or realising in any manner any sum from the petitioner No. 1 on the basis of interest at any rate higher than the rate applicable to the consortium of banks which granted credit foculities to the petitioner No. 1 and of which the respondent No. 1 and of which the respondent No. 2 was a member;
f) A Writ of or in the nature of Certiorari do issue commanding the respondent No. 1 to forthwith transmit to this Hon'ble Court the records of the instant case culminating in the order dated April 25, 2003 and the observations on merits of the claim of the petitioner No. 1 against the respondent No. 2 as contained therein, so that the same may be quashed and conscionable justice be done;
g) A writ of or in the nature of Certiorari do issue commanding the respondent No. 2 to forthhwith transmit to this Hon'ble Court the records relating to the instant case and culminating in refusal on the part of the respodnent No. 2 to limit its claim against the petitioner No. 1 on account of interest to the rate applicable to the consortium of banks that provided credit facilities to the petitioner No. 1 and of which the respondent No. 2 was a member, so that the same may be quashed and conscionable justice be done;
h) Rule Nisi in terms of prayers above;
i) Injunction restraining the respondent No. 2 from in any manner seeking to claim or realise any money from the petitioner No. 1 on the basis of any interest rate in excess of the interest rate as stipulated in the agreement dated May 15, 1989;
j) Ad-interim orders in terms of prayers above;
k) Costs of and incidental to this applicable be paid by the respondent Nos. 1 to 3;
l) Such further order or orders be passed and/or direction or directions be given as to this Hon'ble Court may seem fit and proper."
3. The case made out by the appellants may be summed up thus :
(a) The appellant No. 1 is a company registered under the Companies Act, 1956 and was engaged in the manufacture and sale of sulphuric acid, oleums, insoluble sulphur etc. The appellant No. 1 is a constituent of the respondent No. 2 and had been obtaining credit facilities from the respondent No. 2 from the year 1987. Such credit facilitie
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
