LexM/S. DURGA HOTEL COMPLEX versus RESERVE BANK OF INDIA AND ORS.
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A M/S. DURGA HOTEL COMPLEX v. RESERVE BANK OF INDIA AND ORS. MARCH 15, 2007 B [H.K. SEMA AND P.K. BALASUBRAMANY AN, JJ.) Banking Ombudsman Scheme, 1995: Clauses 13 and 16-Jurisdiction of the Banking Ombudsman-Scope C of-Complaint filed before the Banking Ombudsman-Subsequent filing of the claim by Bank before Debts Recovery Tribunal-Held, Banking Ombudsman loses jurisdiction to entertain the complaint-Banking Regulation Act, 1949. Clauses 13 and 16-Banking Ombudsman-Jurisdiction of-Held, Is D limited-He has no authority to compel the Bank to make further advances- He cannot interfere with agreement regarding repayment schedule fixed by parties or financing ratio that may be maintained between Bank and borrower or direct increase of period of moratorium or fix a schedule of repayment of the loan. E Jurisdiction: Limited jurisdiction-When there is conferment of power on an authority or Tribunal with limited jurisdiction, that coriferred power must continue to exist, when the decision is rendered by that authority or Tribunal-Once the conferred authority or power is taken away or impeded, the authority or F Tribunal can no more exercise it. G H Words and phrases: 'Lie '-Meaning of-Discussed. Ombudsman-Who is-Discussed. The third respondent-Bank sanctioned a loan of Rs. 15 lakhs to the appellant. The Bank disbursed a sum of Rs. I I ,58,750/-. The appellant sought for an additional advance. The proposal in that behalf was not accepted by the Bank. The Bank recalled the loan after crediting Rs. 3,41,250/- out of the 1074 DURGA HOTEL COMPLEX 1·. RESERVE BANK OF INDIA 1075 ) original loan sanctioned. A The appellant made a complaint before the Banking Ombudsman under Clause 16 of the Banking Ombudsman Scheme, 1995, allcging\mauthorised/ fraudulent withdrawal from its account and non credit of proceeds. The respondent-Bank questioned the jurisdiction of Banking Ombudsman to entertain such a complaint. B On 1.11.2000, the respondent-Bank approached the Debts Recovery Tribunal for recovery of amounts alleged to be due from the appellant. Before the Banking Ombudsman, the Bank, contended that the complaint of the appellant before him had ceased to be maintainable in view of the pendency of c the proceedings before the Debts Recovery Tribunal and that, even otherwise, the claims raised by the appellant did not come within the purview of the Banking Ombudsman under the Banking Ombudsman Scheme, 1995. The Banking Ombudsman brushed aside these contentions and passed an award directing disbursal of the sum of Rs. 3,41,250/- to the complainant and ' directing the Bank to make further advances in terms of the recommendations D of the concerned Cell of the State Bank of India maintaining financing ratio of75:25 between the Bank and the complainant. The appellant found that the respondent-Bank was not complying with the directions in the award of the Banking Ombudsman hence filed writ petition before the High Court for issuance of writ of mandamus. The E respondent-bank also filed writ petition challenging the award of Banking Ombudsman on the ground that it was without jurisdiction. The High Court allowed the writ petition of respondent-Bank holding that on the claim being filed by the respondent-Bank before the Debts Recovery Tribunal, the jurisdiction of the Banking Ombudsman to deal with the complaint of the F .~ appellant had come to end and on the further ground that the Banking Ombudsman had exceeded his jurisdiction in rendering the award since the disputes raised were beyond his purview. The question for consideration in these appeals is whether the subsequent filing of the claim by the Bank before the Debts Recovery Tribunal G ~ would oust the jurisdiction of the Banking Ombudsman in a complaint earlier instituted before him and whether the claims put forward before the Banking Ombudsman in its complaint by the appellant fell within the jurisdiction of th~ Ombudsman under the Scheme and consequently whether the directions issued by him were within his province under the Scheme. H 1076 SUPREME COURT REPORTS [2007) 3 S.C.R. A Dismissing the appeal, the Court HELD: 1. When the appellant invoked the jurisdiction of the Banking Ombudsman, the respondent-Bank had not approached the Debts Recovery Tribunal with its application for recovery of the amounts due under the loan transaction. Therefore, this was a case where on the day the complaint was B
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