The main legal point established in the judgment is the interpretation of the jurisdiction of the Banking Ombudsman in relation to the Recovery of Debts due to Banks and Financial Institutions Act, 1993, and the application of relevant legal provisions and case law to determine the Ombudsman's jurisdiction.

S.J. MUKHOPADHAYA, J.

1. The 1st respondent filed a complaint under clause 16 (3) of the Banking Ombudsman Scheme, 1995 (hereinafter referred to as the Scheme) against the Bank claiming damages for business loss amounting to Rupees One Crore; compensation for mental agony amounting to Rs.5 lakhs; loss on account of credit by the bank in the accounts and excess interest to the extent of Rs.12 lakhs; LIC loss at Rs.4 lakhs and cost of the petition of Rs.5,000/-. The 2nd respondent, Banking Ombudsman, by order dated 17th Nov., 1997, held that it could not proceed in the matter as the Bank had already moved the Debts Recovery Tribunal (hereinafter referred to as the Tribunal) for recovery of its debts. The said order was challenged by the 1st respondent in W.P. No.3645/98, which was allowed by learned single Judge vide impugned judgment dated 18th April, 2002, and directed the Banking Ombudsman to expedite the complaint filed by the 1st respondent-writ petitioner by giving sufficient opportunity to submit supporting materials and personal hearing.

The main plea taken by the appellant-Bank is that the 1st respondent borrower cannot be allowed to take advantage of his own wrong having failed to utilize the opportunity to make counter claim u/s 19 (8) of the Recovery of Debts due to Banks and financial Institutions Act, 1993 (hereinafter referred to as the DRT Act). The claim as was made by the Bank before the DRT and the damages as claimed by the 1st respondent, the two claims being interlinked, after decision of DRT the Banking Ombudsman cannot give an independent finding.

2. For disposal of the case it is necessary to notice relevant facts as mentioned hereunder:-

In Feb., 1997, the Bank filed O.A. No.156/97 against the 1st respondent u/s 19 of the DRT Act before the Tribunal for recovery of dues from the 1st respondent. The 1st respondent had no knowledge of the same, who filed a complaint u/s 16 of the Scheme claiming damages as mentioned above. After getting reply from the Bank to the effect that the Bank has already filed an original application before the Tribunal, the Banking Ombudsman, on 17th Nov., 1997, observed that it was not proceeding further in the matter as the Bank has moved before the Tribunal. The said order was challenged by the 1st respondent and allowed by learned single Judge.

3. Learned counsel appearing on behalf of the Bank submitted that the observation of learned single Judge that the Tribunal could not entertain the claim filed by the borrower and that no aspect of defence can be gone into or examined by the Tribunal is erroneous; the Tribunal has jurisdiction to decide the counter claim, including damage, if necessary, after taking into consideration the relevant evidence, if any counter claim is filed u/s 19 (8) of the DRT Act.

Learned counsel placed reliance on Supreme Court decision in Durga Hotel Complex Vs Reserve Bank of India (2007 (5) SCC 120). It was submitted that the Supreme Court held that the Banking Ombudsman serves as an alternative to the adversary system for resolving disputes, that it will be logical to postulate on an interpretation of clause 16 of the Scheme that the Ombudsman loses his jurisdiction over the subject matter on an adversary adjudication forum seizen of the subject matter of the complaint. It is also held that the intention behind incorporating clause 16 (3) (d) is to ensure that the relief the Ombudsman may give may not conflict with a more comprehensive adjudication by Court, Arbitrator, Tribunal or Forum with wider powers. The Supreme Court further held that the expression counter claim in sub-section (8) to (11) of Section 19 of the DRT Act will take even a claim for damages based on the same transaction and could also include even an independent claim that the respondent before the Tribunal may have against the claimant-financial institution. The decision in Union Bank of India, Calcutta Vs Abhijit Tea Company P. Ltd. & Ors. (2000 (7) SCC 357) and Stat