Allowed

R.S. Santhosh Kumar v. the South Indian Bank

Kerala HC7 Nov 2022WP(C)/4151/2015

Case brief

AI extract

What is this about?

The court considered a writ petition challenging the rejection of a complaint by the Banking Ombudsman. Finding that the Ombudsman failed to consider relevant evidence or factors and denied an opportunity of hearing, the court held that the quasi-judicial authority violated fundamental principles of natural justice.

What did the court decide?

The impugned order (Ext.P3) is quashed. The Banking Ombudsman is directed to reconsider the petitioner's complaint and pass a reasoned order.

R.S. Santhosh Kumar Vs the South Indian Bank — Banking and Recovery | Kerala HC (2022)

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W.P.(C)No.4151/2015

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE V.G.ARUN

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MONDAY, THE 7^TH DAY OF NOVEMBER 2022 / 16TH KARTHIKA, 1944

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WP(C) NO. 4151 OF 2015

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PETITIONER/S:

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1 R.S. SANTHOSH KUMAR CHAIRMAN, ADAM JEWELS AND FINANCE, KANJIRAMKUZHI HOUSE, MARIYAPURAM P.O., NEYYATTINKARA TALUK.

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2 RANI V. W/O.SANTHOSH KUMAR, PARTNER, ADAM JEWELS AND FINANCE, KANJIRAMKUZHI HOUSE, MARIYAPURAM P.O., NEYYATTINKARA TALUK.

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BY ADVS. SRI.S.MANU SRI.S.M.RAJEEVAN

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RESPONDENT/S:

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1 THE SOUTH INDIAN BANK REP. BY ITS MANAGING DIRECTOR, SOUTH INDIAN BANK LTD., HEAD OFFICE T.B.ROAD, MISSION QUARTERS, THRISSUR-680 001.

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2 THE BRANCH MANAGER SOUTH INDIAN BANK, UDAYAM KULANGARA BRANCH, THIRUVANANTHAPURAM, PIN-695 122

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3 THE BRANCH MANAGER SOUTH INDIAN BANK, BALARAMAPURAM BRANCH, THIRUVANANTHAPURAM, PIN-695 501.

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4 THE BANKING OMBUDSMAN

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OFFICE OF THE BANKING OMBUDSMAN, (KERALA AND UNION TERRITORY OF LAKSHAWEEP & MAHE), RESERVE BANK OF INDIA BUILDING, 1ST FLOOR, BAKERY JUNCTION, THIRUVANANTHAPURAM-3.

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BY ADV SRI.GEORGE VARGHESE,SC,SOUTH INDIAN BANK

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P.(C)No.4151/2015

V.G.ARUN J.

W.P.(C) No.4151 of 2015

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Dated this the 7^th day of November 2022

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JUDGMENT

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The petitioners are engaged in the business of making and supplying of gold ornaments to jewelleries. They were maintaining accounts with the South Indian Bank, Udayamkulangara Branch. The bank has provided them with an OD facility of Rs.80,000,000/- at a mutually agreed rate of interest of Rs.12%, which was subsequently enhanced to 14% and again to 17%. According to the petitioners, the bank had collected interest in excess of the prevailing rate. Raising this allegation, the petitioners filed Ext.P1 complaint before the Banking Ombudsman. The complaint stands rejected under Ext.P3. Hence, this writ petition.

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Learned Counsel for the petitioners contended that Ext.P3 is liable to be interfered with for violation of the procedure prescribed under the Banking Ombudsman Scheme and also for violation of the principles of natural justice. In support of the contention, learned Counsel placed reliance on Clause 12(2) of the Scheme which requires the Banking Ombudsman to take into

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W.P.(C)No.4151/2015

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account the evidence placed by the parties and other relevant factors while deciding a complaint. Drawing attention to Ext.P3, it is pointed out that the order was passed without considering any of the relevant factors and without even affording an opportunity of hearing to the petitioners. It is pointed out that although Clause 13 of the Scheme empowers the Ombudsman to reject the complaint, such rejection can only be for the enumerated reasons. The petitioners' complaint was rejected under Clause 13(1)(a) which would apply only if the complaint is found to be frivolous or mala fide. It is contended that there was no material before the Ombudsman to hold the complaint to be frivolous, or mala fide. Even in a case in which the Ombudsman is provided with such material, the complaint can be rejected only after hearing the complainant. Learned Counsel also relied on the decision in Anto C.J. v. Indus Ind Bank and Others (2020 (1) KHC 426) to contend that this court has deprecated the practice of dismissing complaints on technical grounds.

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The challenge against the order being on the ground that the petitioners were not heard, the Bank's attempt to sustain the order on the grounds cannot be appreciated.

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Having gone through the provisions of the Banking Ombudsman Scheme, I find substantial merit in the challenge

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W.P.(C)No.4151/2015

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raised. Clause 12(2) of the Scheme is specific to the effect that the Ombudsman should render its decision based on evidence and after considering the other relevant factors. Even without such a clause, it is fundamental that the quasi judicial or administrative authorities are bound to hear the affected persons before passing orders. As the impugned order was passed without complying with this essential requirement, Ext.P3 order is liable to be quashed.

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The writ petition is hence allowed, Ext.P3 is quashed and the Banking Ombudsman is directed to reconsider Ext.P1 complaint and pass reasoned order, in accordance with prescribed procedure.

Sd/-

V.G.ARUN JUDGE

dpk

W.P.(C)No.4151/2015

APPENDIX OF WP(C) 4151/2015

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PETITIONER EXHIBITS

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TRUE COPY OF THE COMPLAINT SUBMITTED TO THE 4TH RESPONDENT. EXT P2 : TRUE COPY OF THE ACKNOWLEDGEMENT LETTER ISSUED FROM THE OFFICE OF THE 4TH RESPONDENT. EXT P3 : TRUE COPY OF THE LETTER DATED 18-082014 ISSUED FROM THE OFFICE OF THE 4TH RESPONDENT.

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EXT P4 : TRUE COPY OF THE LETTER DATED 30-062014 FROM THE CREDIT DEPARTMENT OF THE 1ST RESPONDENT ADDRESSED TO THE 4TH RESPONDENT.

R.S. Santhosh Kumar v. the South Indian Bank

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R.S. Santhosh Kumar v. the South Indian Bank

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