IMPORTANT POINTS
The Scheme is one notified in public interest with a view to prevent the affairs of the banks being conducted in a manner detrimental to the interests of its customers. The said fact is evident from the preamble of the Scheme itself which recites that the Scheme is one introduced with an object of enabling resolution of complaints relating to services rendered by banks and to facilitate the satisfaction or settlement of such complaints. The provisions of the Scheme are, therefore, to be understood and interpreted in a manner that promotes the object of the Scheme and not in a manner that defeats its object.

JUDGMENT :

The grievance of the petitioner in the writ petition concerns Ext.P6 order passed by the second respondent, the Banking Ombudsman under the Banking Ombudsman Scheme, 2006 (the Scheme), on Ext.P5 complaint.

2. The case set out by the petitioner in Ext.P5 complaint was that he was enjoying a cash credit facility from the first respondent Bank (the Bank) from the year 2012; that the interest agreed to be paid by the petitioner for the said facility was 13.25% per annum and that interest was accordingly being charged in the account only at that rate till June 2018. It was also the case of the petitioner in Ext.P5 complaint that the Bank has unilaterally, and without notice to the petitioner, varied the rate of interest to be charged in the account of the petitioner to 15.65% per annum thereafter and that the Bank has no authority to do so. In terms of Ext.P6 order, the second respondent has rejected Ext.P5 complaint without issuing notice to the Bank, stating that the petitioner has not produced documents to show that the agreed rate of interest was 13.25%.

3. Heard the learned counsel for the petitioner as also the learned counsel for the first respondent.

4. Ext.P6 order reads thus:

“Please refer to the captioned complaint.

2. In this connection, we advise you that loan is a commercial decision of bank and as such, one of the relief sought (To direct bank to renew your credit facility) is not under the purview of BOS, 2006.

3. We also advise that as per clause 9(2)(b) of the Banking Ombudsman Scheme (BOS) 2006, “the complainant shall file along with the complaint, copies of the documents, if any, which he proposes to rely upon and a declaration that the complaint is maintainable under sub-clause (3) of this clause.” We observe that you have not attached any document to show that the rate of interest agreed in the account is at 13.25%, to substantiate your claims.

4. We, therefore, regret our inability to admit the complaint in terms of clause 8(1) and 8(2) read with clause 9(2)(b) of the Banking Ombudsman Scheme 2006 (As amended up to July 01, 2017).

5. This is issued as per the orders of the Banking Ombudsman.”

I am unable to agree with the view expressed by the second respondent in the impugned order for not entertaining the complaint in so far as it relates to the rate of interest charged in the account of the petitioner. True, clause 9(2)(b) of the Scheme makes it obligatory for the complainant to produce along with the complaint, copies of the documents, if any, which he proposes to rely upon to substantiate the complaint. The said provision can be understood only as a provision which makes it obligatory for the complainant to produce along with the complaint, the documents, if any, which the complainant propose to rely upon to substantiate the complaint. The said provision cannot be understood as one enabling the Ombudsman to dismiss the complaint, if the complainant does not produce along with the complaint copies of all documents that are necessary to substantiate the complaint. Further, even clause 9(2)(b) of the Scheme is only a procedural provision and the same, therefore, can be applied only in a manner that advances the cause of justice and not at all in a manner that defeats the cause of justice. Again, the Scheme is one notified by the Reserve Bank of India in exercise of the power conferred under Section 35A of the Banking Regulation Act. Section 35A of the Banking Regulation Act reads thus:

35A Power of the Reserve Bank to give directions. —

(1) Where the Reserve Bank is satisfied that—

(a) in the [public interest]; or

[(aa) in the interest of banking policy; or]

(b) to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositor or in a manner prejudicial to the interests of the banking company; or

(c) to secure the proper management of any banking company generally,

it is necessary to issue directions to banking companies generally or to any banking company in