MADRAS High Court: Advocates Permitted to Participate in Proceedings Before the Banking Ombudsman

Madras HC: Whether Advocates Permitted to Participate in Proceedings Before the Banking Ombudsman by RBI Scheme 2006

The Madras High Court, two judges bench headed by Hon'ble Chief Justice A. P. Shah and Justice Senthil Kumar Ramamoorthy agreed to consider the issue that whether the advocates were permissible to participate in proceedings before Ombudsman under the Banking Ombudsman Scheme 2006 promulgated by Reserve Bank of India.

The contention of the petitioner on the basis of certain information received was that there was no legal bar in the appearance of the advocates and that the respondents were discriminating so far as the individual complainants are concerned by allowing Law Officers of the Bank to appear in such proceedings however, at the same time individuals of the assistance of advocates were denied to appear.

The bench then had called upon the learned counsel for the respondents to come forward and explain the nature of the functions of the Ombudsman and the powers exercised by it, in order to ascertain as to whether the nature of the proceedings do require any such legal assistance and can be barred or not.

The bench recorded, "The Reserve Bank of India through the Ombudsman filed a counter affidavit annexing therewith 2006 Scheme, where Clause 7 entails the power and jurisdiction of the Ombudsman, Clause 10 prescribes the procedure for calling for information and Clause 11 or thereof indicates the exercise of jurisdiction by the Ombudsman to be not bound by any Rules of evidence and allow him to follow such procedure as may be considered just and proper, where providing an opportunity to the complainant along with documentary evidence has been made permissible within a time frame.

The Award is to be made by the Banking Ombudsman with powers under Clause 12 and also empowers him to reject the complaint under Clause 13 and the appeal before the appellate authority is provided under Clause 14."

Further the contention of the learned counsel for the petitioner that the learned Single Judge of the court in a 2002 judgement held that the Ombudsman under the Scheme performs a quasi-judicial function and therefore, the Ombudsman proceeds like an adjudicatory forum and consequently, the legal assistance of an advocate should not be barred more so keeping in view with the fact that law officers of the bank are allowed to attend such proceedings.

The court also directed the learned counsel for both the parties to shed some light on a very peculiar clause that has been incorporated under Clause 12(8) of the scheme which states, that "if any Award is rendered by Ombudsman it shall lapse and shall be of no use unless a letter of acceptance of full and final settlement of the claim is tendered by the complainant."The matter would be further heard next on December 3, 2020.