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TMI Blog2002 (4) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... and commissions on the part of the banker, and moved the respondent by lodging its complaint dated November 11, 1997. The complaint runs to 60 pages in all under various heads. It is not necessary to refer to the details set out in the complaint. The petitioner moved the respondent for redressal of its grievance and complained against the bankers since the respondent has been constituted for redressal of such grievances and taking action on such complaints against banks. 4. The respondent by the impugned communication passed a final order on the complaint submitted by the petitioner against the Bank of Madura Ltd. The impugned order reads thus : "We refer to your complaint dated October 6, 1997, against the captioned bank. We took up the matter with the concerned bank and we note from their reply that the bank was in order in returning the bill in view of the fact that the bill was not drawn in accordance with the terms of LC and that the number of LC was not mentioned in the bill. Hence, we regret our inability to entertain the complaint." 5. Challenging the said rejection of the complaint, the present writ petition has been filed. Mr. T.K. Seshadri, learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. It is not open to the respondent to invent and assign new reasons in the counter and seek to defend the impugned order. This is the well settled principle. 8. The impugned proceedings extracted above would show that it is a refusal to exercise the jurisdiction vested in the respondent as the respondent had failed to examine the merits of the petitioner s complaint and after affording an opportunity. The impugned proceeding is also vitiated by non-application of mind, in that, the respondent had not applied its mind to any portion of the complaint or materials placed by the petitioner. Except saying that the reply of the banker is in order and rejecting the complaint on that sole reason, there is no examination of the complaint and the objections raised by the respondent bank on merits. 9. While exercising the power of judicial review, this court has to examine the decision-making process and find out whether any reasonable person would have arrived at such a conclusion or passed such an order in a given situation. It is essential to refer to the Banking Ombudsman Scheme, 1995, as framed by the Reserve Bank of India under section 35A of the Banking Regulation Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servance of Reserve Bank Directives on interest rates, ( ii )delays in sanction/non-observance of prescribed time schedule for disposal of loan applications, and ( iii )non-observance of any other directions or instructions of the Reserve Bank, as may be specified for this purpose, from time to time." 12. Learned counsel for the respondent contended that the Ombudsman is not exercising quasi-judicial function or statutory power, but it is only an administrative function. This is a misconception. The Ombudsman exercises the power in terms of the Scheme which has been framed in exercise of statutory power and has to act as per the Scheme and it is a quasi-judicial exercise. This court holds that the Ombudsman is a quasi-judicial authority. Since it has a legal authority, it has to determine questions affecting the rights of the parties, it has the duty to act judicially and assign reasons in support of its conclusion. On the basis of the Scheme, it is clear that the Ombudsman has to act quasi-judicially in respect of the complaints presented before it and act in terms of the Scheme. 13. In Canara Bank v. P.R.N. Upadhyaya [1998] 94 Comp. Cas. 569; it has been held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittedly, on receipt of the remarks or reply from the bank, the Ombudsman had just stated that the bank was in order. But it is not supported by any reason. The petitioner s complaint runs to more than 50 pages containing very many details. Therefore, equally, the respondent-bank should have forwarded its objection or remarks running to number of pages to the Ombudsman. That reply or objection of the bank had not been forwarded to the petitioner, nor the petitioner had any opportunity to know as to what is the stand taken by the bank in respect of the complaint. 16. Rejection of a complaint without recording reasons, without affording opportunity to the petitioner to substantiate its complaint or without hearing the petitioner after communicating the objections or remarks of the bank is also fatal. The decision-making process adopted by the Ombudsman cannot be sustained at all. The respondent had failed to follow even the minimum procedure. 17. In Style (Dress Land) v. Union Territory, Chandigarh [1999] 7 SCC 89, the Apex Court held thus : "Even the administrative orders and not ( sic only) quasi-judicial are required to be made in a manner in consonance with the rul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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