http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10

CASE NO.:

Appeal (civil) 1389 of 2007

PETITIONER:

M/S DURGA HOTEL COMPLEX

RESPONDENT:

RESERVE BANK OF INDIA & ORS

DATE OF JUDGMENT: 15/03/2007

BENCH:

H.K. SEMA & P.K. BALASUBRAMANYAN

JUDGMENT:

J U D G M E N T

(Arising out of SLP(C) No. 10075-10076 of 2005)

P.K. BALASUBRAMANYAN, J.

Leave granted.

1. The appellant, a partnership firm, sought a loan

from the third respondent \026 Bank for putting up a hotel. In

April 1997, a loan of Rs. 15 lakhs was sanctioned by the

Bank. The Bank disbursed a sum of Rs. 11,58,750/-. The

appellant sought 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 original loan

sanctioned.

2. The appellant made a complaint before the Banking

Ombudsman for the State of Bihar at Patna under clause 16 of

the Banking Ombudsman Scheme, 1995. Clause 16 enabled

any person, who had a grievance against the Bank, to make a

complaint in writing to the Banking Ombudsman. The

complaint had to be in writing and it had to be accompanied

by supporting documents, if any, relied on by the

complainant. It had also to set out the nature and extent of

the loss caused to the complainant and the relief sought from

the Banking Ombudsman and a statement about the

compliance of the conditions referred to in that clause. The

appellant made the complaint about what it called the

unauthorised or fraudulent withdrawal from the account of

the appellant and the non credit of proceeds to the account of

the appellant. It was contended that the crediting of Rs.

3,41,250/- or withdrawal thereof from the account of the

appellant was unauthorised, and that the appellant had

suffered considerable loss because of the delay on the part of

the respondent \026 Bank in advancing the loan and in not

permitting the higher credit facility recommended in the

Technical Cell Report binding on the Bank. By way of relief it

was claimed that the Bank should further credit the remaining

sanctioned loan to the account of the appellant. The total

interest for the period should be exempted and there should

be a direction to pay towards loss of the appellant a sum of Rs.

16.9 lakhs. The respondent \026 Bank opposed the complaint.

The respondent \026 Bank questioned the jurisdiction of the

Banking Ombudsman to entertain such a complaint. It

contended that the jurisdiction of the Banking Ombudsman

was confined to certain matters specified in that behalf and

the claims of the appellant were not within the purview of the

Banking Ombudsman.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10

3. On 1.11.2000, the respondent \026 Bank approached

the Debts Recovery Tribunal constituted under the Recovery of

Debts Due to Banks and Financial Institutions Act, 1993 (for

short, "the Recovery of Debts Act") for recovery of amounts

alleged to be due from the appellant. The complaint of the

Bank was numbered as O.A. No. 157 of 2000 and was being

dealt with by the Tribunal.

4. Before the Banking Ombudsman, the Bank, inter

alia, contended that the complaint of the appellant before him

had ceased to be maintainable in view of the pendency of 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. It was contended that

the jurisdiction of the Banking Ombudsman was a limited one

and the claims of the appellant were not those that could be

entertained by him. The Banking Ombudsman brushed aside

these contentions. He found that his jurisdiction was invoked

by the appellant before the respondent \026 Bank approached the

Debts Recovery Tribunal with its claim and hence he was not

precluded from adjudicating on the complaint of the appellant

before him. He also brushed aside the objection of the

respondent regarding his jurisdiction to entertain the

complaint made by the appellant. The Banking Ombudsman

is seen to have made some suggestions or recommendations to

settle the dispute between the parties. They were not

acceptable to the Bank. The Banking Ombudsman thereupon

proceeded to pass 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 of

the concerned Cell of the State Bank of India maintaining

financing ratio of 75:25 between the Bank and the

complainant. The Banking Ombudsman further directed that

the period of repayment should be fixed as seven years

exclusive of one year of moratorium and in view of non-

disbursement of the loan, the period of moratorium had to be

enhanced according to the Rules and the interest be charged

strictly in accordance with the guidelines of the Reserve Bank

of India. This award was passed on 30.3.2002.

5. The respondent \026 Bank sought the permission of the

Reserve Bank of India to challenge the award passed by the

Banking Ombudsman in a court of law. Meanwhile, the

appellant found that the respondent \026 Bank was not

complying with the directions in the award of the Banking

Ombudsman. The appellant therefore filed C.W.J.C. No.

10756 of 2002 before the High Court of Patna under Article

226 of the Constitution of India praying for the issue of a writ

of mandamus directing the respondent \026 Bank to implement

the award of the Banking Ombudsman. The respondent \026

Bank, in its turn, filed C.W.J.C. 1882 of 2003 challenging the

award of the Banking Ombudsman essentially on the ground

that it was one without jurisdiction, both on the basis that the

matter was pending before the Debts Recovery Tribunal when

he rendered his award and on the further ground that the

subject matter of adjudication by him in the present case was

beyond his ken under the Banking Ombudsman Scheme,

1995. The learned single judge of the High Court upheld the

contentions of the respondent \026 Bank and held that on the

claim being filed by the respondent \026 Bank before the Debts

Recovery Tribunal as O.A. No. 157 of 2000, the jurisdiction of

the Banking Ombudsman to deal with the complaint of the

appellant had come to an 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10

purview. As a consequence, the learned single judge allowed

the Writ Petition filed by the respondent \026 Bank and quashed

the award passed by the Banking Ombudsman leaving the

appellant to raise all his claims before the Debts Recovery

Tribunal, by way of a counter-claim. Resultantly, the High

Court also dismissed the Writ Petition of the appellant seeking

enforcement of the award of the Banking Ombudsman. Being

aggrieved by the decision of the learned single judge, the

appellant filed two Letters Patent Appeals in the High Court as

L.P.A. Nos. 309 and 313 of 2004. The Division Bench of the

High Court agreed with the conclusions of the learned single

judge and dismissed the appeals filed by the appellant.

Feeling aggrieved thereby, the appellant filed these Petitions

for Special Leave to Appeal before this Court. On 10.5.2005,

this Court while not entertaining the Petition of the appellant

on the merits of its claim, issued notice confined to the

questions of law arising in the case, clarifying at the same time

that the proceedings before the Debts Recovery Tribunal could

proceed. Thus, what is involved in this appeal is only the

question of the jurisdiction of the Banking Ombudsman and

not the merits of the claims of the appellant in the case on

hand. Learned counsel also argued the appeal before us

consistent with the notice issued by this Court earlier.

6. Therefore, the two questions that arise are, whether

the subsequent filing of the claim by the Bank before the

Debts Recovery Tribunal 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 the Ombudsman under the Scheme and

consequently whether the directions issued by him were

within his province under the Scheme.

7. Before we proceed to deal with the arguments, we

will notice the relevant provisions. Under Section 35A of the

Banking Regulation Act, 1949, the Reserve Bank of India has

the power to issue directions to banking companies generally

or to any banking company in particular, as it deems fit, and

the banking companies shall be bound to comply with such

directions. The Reserve Bank of India could, on its own

motion or on representation made to it also modify or cancel

any direction it had earlier issued. In consonance with this

power, on 14.6.1995, the Reserve Bank of India notified the

Banking Ombudsman Scheme, 1995. We think it profitable to

extract the relevant Notification herein:

" NOTIFICATION

Ref. RCPC No. 1070/BOS-94-95

14th June, 1995

In exercise of the powers conferred by Section

35A of the Banking Regulation Act, 1949 (10 of

1949), Reserve Bank being satisfied that it is

necessary in public interest and in the interest

of banking policy to provide for a system of

Banking Ombudsman for redressal of

grievances against deficiency in banking

services, concerning loans and advances and

other specified matters hereby directs that all

commercial banks should comply with the

Banking Ombudsman Scheme, 1995 annexed

hereto.

Sd/-

(R.V. Gupta)

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10

Deputy Governor"

By a notification dated 15.6.1995, the Scheme was also

extended to Scheduled Primary Cooperative Banks.

Admittedly, the Scheme so notified, was in force at the

relevant time. As per clause 2, the object of the Scheme was

to enable resolution of complaints relating to provision of

banking services and to facilitate the satisfaction, or

settlement of such complaints. Under clause 4 of Chapter II,

the Reserve Bank of India could appoint a Banking

Ombudsman to carry out the functions entrusted to him by or

under the Scheme. The Banking Ombudsman was to hold

office during the pleasure of the Governor of the Reserve Bank

of India. Chapter III dealt with the jurisdiction, powers and

duties of the Banking Ombudsman. Clause 12 provided that

the Banking Ombudsman had the power and duty to receive

complaints relating to the provision of banking services and to

consider such complaints and facilitate their satisfaction, or

settlement by agreement, by making a recommendation, or

Award in accordance with the Scheme. Clause 13 specified

that as regards banking services, the authority of the Banking

Ombudsman would include all complaints concerning

deficiency in service such as, non-payment/inordinate delay in

the payment or collection of cheques, drafts/bills etc. The

other deficiencies that could be looked into on a complaint are

enumerated in clauses (ii) to (ix) to sub-clause (a) of Clause 13.

We are not concerned with them in the present case. Since we

are concerned with a complaint regarding loan and advances,

we may extract the Clause with particular reference to clause

13(b), which has relevance thereto:

"13. SPECIFIC AMBIT OF AUTHORITY

As regards banking services, the Banking

Ombudsman's authority will include:-

(a) \005\005\005\005\005\005\005\005\005\005\005\005\005\005\005

(b) Complaints concerning loans and

advances only insofar as they relate

to:-

i) non-observance 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."

Under clause 14, the Banking Ombudsman had general

superintendence and control over his office and he had power

to incur expenditure on behalf of his office. Chapter IV dealt

with the procedure for redressal of grievance. Clause 16

provided for making a complaint. Since what is involved is an

interpretation of the scope of the power of the Ombudsman on

a complaint, we think it proper to extract Clause 16

hereunder:

"16. COMPLAINT

(1) Any person who has a grievance

against a bank, may himself or

through an authorised

representative make a complaint in

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10

writing to the Banking Ombudsman

within whose jurisdiction the

branch or office of the bank

complained against is located.

(2) The complaint shall be in writing

duly signed by the complainant or

his authorised representative and

shall state clearly the name and

address of the complainant, the

name and address of the branch or

officer of the bank against which the

complaint is made, the facts giving

rise to the complaint supported by

documents, if any, relied on by the

complainant, the nature and extent

of the loss caused to the

complainant and the relief sought

from the Banking Ombudsman and

a statement about the compliance of

the conditions referred to in sub-

clause (3) of this clause.

(3) No complaint to the Banking

Ombudsman shall lie unless,-

(a) The complainant had before

making a complaint to the

Banking Ombudsman made a

written representation to the

bank named in the complaint

and either the bank had

rejected the complaint or the

complainant had not received

any reply within a period of

two months after the bank

concerned received his

representation or the

complainant is not satisfied

with the reply given to him by

the bank;

(b) The complaint is made not

later than one year after the

bank had rejected the

representation or sent its final

reply on the representation of

the complainant;

(c) The complaint is not in respect

of the same subject matter

which was settled through the

office of the Banking

Ombudsman in any previous

proceedings whether received

from the same complainant or

any one or more of the parties

concerned with the subject

matter;

(d) The complaint is not the same

subject matter, for which any

proceedings before any Court,

Tribunal or Arbitrator or any

other forum is pending or a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10

decree or Award or order of

dismissal has already been

passed by any such Court,

Tribunal, Arbitrator or forum;

(e) The complaint is not frivolous

or vexatious in nature."

8. As regards the first aspect as to whether the

Banking Ombudsman had lost his jurisdiction in view of the

approach made by the respondent \026 Bank to the Debts

Recovery Tribunal, what is relevant is clause 16(3)(d) quoted

above and as regards the question whether the Banking

Ombudsman had jurisdiction to entertain the claims made by

the appellant, what is involved is the understanding of the

scope of clause 13(b), quoted above.

9. It is clear that when the appellant invoked the

jurisdiction of the Banking Ombudsman, the respondent \026

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 filed, no proceeding before any Tribunal on the

subject matter was pending or in which a final order had been

passed or decision rendered. At the stage of initiation, there

was no impediment in the way of the Ombudsman in

entertaining the complaint or in proceeding with it. The

impediment, if any, was caused by the Bank's subsequent

filing of O.A. No. 157 of 2000 before the Debts Recovery

Tribunal. The High Court has taken the view that since by the

time the Ombudsman rendered his award, the Bank had

already approached the Debts Recovery Tribunal with its claim

under the Recovery of Debts Act, the Banking Ombudsman

did not have jurisdiction to render the award, or has lost his

jurisdiction to render the award. Clause 16 of the Scheme in

sub-clause (1) speaks of a person making a complaint in

writing to the Banking Ombudsman. Clause (3) read in

conjunction with sub-clause (d) indicates that no complaint to

the Banking Ombudsman shall lie if on the subject matter

that is put forward before the Ombudsman, there is a

proceeding pending before a Court, Arbitrator, Tribunal or

forum or a decree or final adjudication had earlier been made

by any one of them. This would suggest that the bar is

attracted only when on the date of the filing of the complaint

before the Ombudsman, a claim on the subject matter is

pending before, say, the Debts Recovery Tribunal. Here

admittedly, on the day the jurisdiction of the Banking

Ombudsman was invoked, no such claim was pending before

any Court, Arbitrator, the Debts Recovery Tribunal or any

other forum. To that extent, prima facie, there is merit in the

contention that Clause 16(3) may not be attracted to the case

on hand.

10. Clause 16(3) of the Scheme says, "No complaint to

the Banking Ombudsman shall lie". According to Black's Law

Dictionary "lie" means, "to have foundation in the law; to be

legally supportable, sustainable or proper". In the context of

the power conferred on the Ombudsman by the Scheme read

in the light of Section 35A of the Banking Regulation Act, it

would be appropriate to understand the expression as having

a foundation in law in the sense that the claim must have a

foundation in law. A Banking Ombudsman, though might

have initially jurisdiction to entertain a complaint on the basis

that it has a legal foundation, here in terms of the Scheme, he

may be divested of that jurisdiction or the foundation in law

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10

might be lost on either of the parties approaching the Court,

the Arbitrator or the Debts Recovery Tribunal in respect of the

same subject matter. Dealing with the expression 'entertain'

this Court held in LAKSHMI RATTAN ENGINEERING

WORKS LTD. VS. ASSTT. COMMR. SALES TAXN KANPUR &

ANR. [(1968) 1 S.C.R. 505] that it means to deal with or admit

to consideration. The Court approved the views expressed by

some of the High Courts that the word 'entertain' meant not

'receive' or 'accept' but 'proceed to consider on merits' or

adjudicate upon. The Court also accepted the Dictionary

meaning of the word as 'admit to consider'. This was also the

view that was subsequently taken by this Court in

Hindustan Commercial Bank Ltd. Vs. Punnu Sahu (Dead)

Through Legal Representatives [(1971) 3 S.C.C. 124]. It was

held therein that the expression "entertain" in Order XXI Rule

90 of the Code meant, to 'adjudicate upon' or to 'proceed to

consider on merits' and not 'initiation of proceeding' alone.

Drawing an analogy, it is possible to say that the complaint

must continue to have a foundation in law at the time the

Ombudsman takes up the claim for his consideration and

renders his decision or award. The foundation would be lost

when a Court, Arbitrator, Tribunal or any other competent

forum is moved on the same subject matter. When the subject

matter of the complaint is taken to any other competent

forum, the complaint loses its foundation in law. In other

words, the subject matter of the complaint should not be

pending in any other Tribunal, or Court or before an Arbitrator

not merely when it is filed but also when it is taken up for

consideration and disposal.

11. There is a more fundamental aspect. The

Ombudsman, at best, is an Authority or Tribunal of limited

jurisdiction constituted under the Scheme. It is a jurisdiction

conferred by the Scheme. The exercise of jurisdiction or power

by the Ombudsman would depend on his having jurisdiction

not only to entertain a claim but also to bring it to an end.

The continued exercise of power by him would depend on his

continuing to have jurisdiction. Once he is deprived of his

jurisdiction or gets deprived of his jurisdiction over the subject

matter, he could no more proceed with a complaint which was

earlier filed. In other words, to render an Award valid in terms

of the Scheme, the Ombudsman must continue to retain

jurisdiction over the subject matter of the concerned

complaint. A complaint goes out of his purview when the

subject matter of it is taken to a Court, Arbitrator, Tribunal or

forum. The relief that can be granted by the Ombudsman are

limited and confined to the matters coming within clause 13 of

the Scheme. The intention behind incorporating clause

16(3)(d) appears to be to ensure that the relief an Ombudsman

may give, may not conflict with a more comprehensive

adjudication by a Court, Arbitrator, Tribunal or forum with

wider powers. When there is conferment of a power on an

authority or Tribunal with limited jurisdiction, that conferred

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 Tribunal can

no more exercise it. This will be the position when one of the

parties in a complaint before the Ombudsman takes the

subject matter to a Court, Arbitrator, Tribunal or forum. In

other words, when ultimately he is about to pronounce his

Award, the Ombudsman finds that the subject matter of the

dispute has been taken to the Debts Recovery Tribunal or a

Civil Court or an Arbitrator or to any other competent forum,

he gets divested of his jurisdiction, on a harmonious reading of

clause 16(1) with clause 16(3)(d) of the Scheme. It is not, as if,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10

a bar of jurisdiction can occur only at the stage of initially

entertaining a claim. It could also occur at a subsequent stage

either in view of the jurisdiction being taken away or in view of

any other impediment created by the very Legislation, Rule or

Scheme that conferred the initial jurisdiction. Thus, having

lost his jurisdiction over the complaint in view of clause

16(3)(d) of the Scheme, the Ombudsman will have to decline

jurisdiction to pass any order or award on the complaint.

This, we think would be the proper way of understanding the

bar created by clause 16(3)(d) of the Scheme.

12. Conceptually, an Ombudsman is only a non-

adversarial adjudicator of disputes. An Ombudsman by

definition is only an official appointed to receive, investigate,

and report on private citizen's complaints about the

government; a similar appointee in a non-governmental

organisation (such as a company or university). (See Black's

Law Dictionary). He serves as an alternative to the adversary

system for resolving disputes, especially between citizens and

government agencies. He is an independent and non-partisan

officer who deals with specific complaints from the public

against the administrative injustice and mal-administration.

(See 4 American Jurisprudence 2d). Therefore, by its very

nature, an Ombudsman is an alternative to an adversary

system for resolution of disputes. When the subject matter of

a complaint before the Ombudsman under the Scheme is

taken to a Court, Tribunal, Arbitrator or other competent

forum, the subject matter is takwn away from the purview of

the Ombudsman to an adjudicatory forum under an

adversarial system. It is therefore logical to understand clause

16 of the Scheme with particular reference to sub-clause 3(d)

thereof, that on one of the parties approaching an adjudicatory

forum on an adversarial system, the non-adversarial

adjudicator, the Ombudsman must lose his power or authority

to bring about a resolution of the complaint by way of a non

adversarial adjudication. An Ombudsman is not defined in

the Banking Regulation Act, 1949 or in the Banking

Ombudsman Scheme 1995 constituting him as adversarial

adjudicator. Clause 12 of the Scheme constitutes him a

facilitator to bring about a satisfaction of the complaint, in one

of the modes referred to therein. An adversarial adjudication

necessarily stands on a higher plane than a settlement of a

complaint at the instance of an Ombudsman. When such a

forum for adversarial adjudication of disputes takes seisin of

the subject matter of a complaint, 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 of the complaint and consequently the complaint itself.

13. Thus we are of the view that the High Court was

justified in interfering with the Award of the Banking

Ombudsman on the ground that he could not have passed the

Award in view of the divestiture of his jurisdiction.

14. After all, a complainant before the Ombudsman like

the appellant will not be prejudiced by this interpretation. It

has now been clarified in United Bank of India, Calcutta Vs.

Abhijit Tea Co. Pvt. Ltd. & ors. [(2000) Supp 3 S.C.R 153]

that the expression 'counter-claim' in sub-Sections (8) to (11)

of Section 19 of the Recovery of Debts Act will take in even a

claim for damages based on the same transaction and would

include even an independent claim the respondent before the

Debts Recovery Tribunal may have against the claimant \026

Financial Institution. It has thus been held that a counter-

claim in a wide sense will lie before the Debts Recovery

Tribunal and the respondent will be entitled to raise a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10

comprehensive counter-claim. This ratio has also been

accepted subsequently in State Bank of India Vs. Ranjan

Chemicals Ltd. & Anr. [(2007) 1 S.C.C. 97]. It is therefore

obvious that the appellant can make all his claims before the

Debts Recovery Tribunal while defending the claim of the

Bank, including the ones he has put forward before the

Banking Ombudsman.

15. Then the question is whether the subject matter of

the complaint came within the purview of the Banking

Ombudsman. Clause 13(b) of the Scheme indicates the

jurisdiction of the Ombudsman. Clause (b) provides that he

could entertain complaints concerning loans and advances

only insofar as they relate to non-observance of the directives

of the Reserve Bank of India on interest rates, delays in

sanction/non-observance of prescribed time schedule for

disposal of loan applications and non-observance of any other

directions or instructions of the Reserve Bank of India, as may

be specified for the purpose of the Scheme from time to time.

It is seen, as found by the High Court, that there was no claim

that the respondent \026 Bank was guilty of non-observance of

any directive of the Reserve Bank of India on interest rates.

There is also no case that any other direction or instruction of

the Reserve Bank of India made for the purpose of the Scheme

had not been observed by the respondent \026 Bank. At best, the

appellant can claim that it was complaining of delay in

sanction/non-observance of prescribed time schedule for

disposal of its loan application for additional finance. Even

here, the case of the respondent \026 Bank is that there was no

time schedule prescribed for enhancing the limit of the loan or

for granting additional loan to a hotel industry like the one for

which the appellant was claiming a loan from the Bank and

hence there was no question of any of the complaints of the

appellant coming within the purview of the Banking

Ombudsman. A reading of the Award of the Banking

Ombudsman shows that the directions issued by him

regarding the advancing of the balance amount of

Rs.3,41,250/- out of the original loan of Rs. 15 lakhs

sanctioned, his direction to the Bank to make available

additional finances merely on the basis of the recommendation

of the Committee in that behalf and his directing the

maintaining the financing ratio of 75:25 and his fixing a

repayment schedule as seven years exclusive of one year of

moratorium and the enhancement of the period of moratorium

consequent on non-disbursement of the loan amount by the

respondent \026 Bank, are all outside Clause 13(b) of the Scheme

and consequently outside the jurisdiction of the Banking

Ombudsman. The Banking Ombudsman has no authority to

compel the Bank to make further advances which as a

prudent banker it might not find feasible. Nor can the

Banking Ombudsman interfere with the agreement regarding

the repayment schedule fixed by the parties or the financing

ratio that may be maintained between the Bank and the

borrower. Nor can the Ombudsman direct the increase of the

period of moratorium or fix a schedule of repayment of the

loan. As we have indicated, there is no case that any of the

directives of the Reserve Bank of India in respect of any of

these matters had been violated by the respondent \026 Bank.

The High Court, in our view, was correct in finding that the

Banking Ombudsman had exceeded his jurisdiction in passing

the Award that he has passed. None of the directions come

within the purview of Clause 13(b) of the Scheme. The

jurisdiction of the Banking Ombudsman under the Scheme is

cribbed, confined and cabined by clause 13 of the Scheme.

Therefore, in any event, the directions issued by the Banking

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10

Ombudsman are outside his jurisdiction. In this context, we

do not think it necessary to consider whether there can be a

specific performance of an agreement to lend or the issuance

of a direction to lend more money than the Bank was willing to

lend considering the creditworthiness of the borrower and his

prior conduct in respect of the repayment of the loan which

the Bank had already granted.

16. We thus find that the High Court was justified in

interfering with the award of the Banking Ombudsman. We

therefore answer both the questions raised on behalf of the

appellant against the appellant and in favour of the

respondent \026 Bank. The questions of law thus stand

answered.

17. We dismiss the appeal.