The Banking Ombudsman Scheme 2006, which was constituted by Reserve Bank of
India by virtue of Section 35A of Banking Regulations Act, 1949 with the
objective of enabling resolution of complaints relating to certain services
rendered by banks and to facilitate the satisfaction or settlement of such
complaints.
Though the scheme provides ‘condonation of Delay’ in Banking
Ombudsman Scheme at the appellate stage, however, fails to provide the same at
the original side. In this article, the validity of lack of provisions for condonations of delay at the original side will be discussed.
Vigilantibus non dormientibus jura subveniunt which means vigilant will be
assisted by law and not a lethargic person. This principle has been enshrined in
the Limitation Act, 1963, which prescribes time limits within which a party must
bring a claim, or give notice of a claim to the other party. However,
considering various circumstances, many a time it is not possible to initiate
suit within the time limit thus it is at the discretion of the court to condone
the delay as per provisions of the said Act.
It is important to establish first, whether provisions of the Limitation Act are
attracted in quasi-judicial proceedings, in order to reach a conclusion for the
question at large.
In the case of
Athani Municipality v. Labour Court[1], the question that was
raised was whether a worker can file an application in a labour court with
respect to a dispute relating to the payment of wages in consonant with
Limitation Act. The apex court held that the limitation act did not apply to
bodies other than courts.
Further, in the case of
Nityanand v. L.I.C[2] reiterated the above mentioned in
the following words:
It seems to us that the scheme of the Indian Limitation Act is that it
only deals with applications to courts and that the labor court is not a court
within the Indian Limitation Act, 1963.
In the case of
Commissioner of Sales Tax, U.P. v. Madan Lal Das and Sons[3],
where the respondent has made an application for revision under section 19(1) of
the U.P. Sales Tax Act.
In this case, the court relied on Section 29(2) of the Limitation Act which says
that where any local law prescribes for any suit, appeal or application, any
period of limitation different from that prescribed by the Limitation Act, the
provisions of sections 4 to 24 of the Acts shall apply insofar as they are not
expressly excluded by such special or local law.
In the Banking Ombudsman scheme, Ombudsman is a quasi-judicial authority which
is empowered inter-alia to summon the bank and its customers to adjudicate on
the complaint received against Banks. Thus, in matters in front of the ombudsman
will not attract the limitation act unless specifically mentioned in the
scheme/Act. Which though mentioned in case of appeals but not in the original
side.
As per clause 9 (3) (b) No complaint to the Banking Ombudsman shall lie unless:
the complaint is made not later than one year after the complainant has received
the reply of the bank to his representation or, where no reply is received, not
later than one year and one month after the date of the representation to the
bank
and section 9(3)(f)
the complaint is made before the expiry of the period of limitation prescribed
under the Indian Limitation Act, 1963 for such claims.
Whereas, clause 14 of the Scheme read as:
14. Appeal Before The Appellate Authority
- XXX
XXX
Provided that the Appellate Authority may, if he is satisfied that the applicant
had sufficient cause for not making the appeal within time, allow a further
period not exceeding 30 days;
XXX
In respect to the above-mentioned provision, it is important to consider the
ratio of the apex court in
T. Motichand v. Munshi AIR[4] stated that no period
of limitation can be prescribed for a person aggrieved by the State action
challenging such action as violating fundamental rights and filing a petition
under Article 32 of the Constitution before the Supreme Court.
Such a principle
of limitation period would have the effect of putting curbs in the way of the
enforcement of fundamental rights and might be challenged under Art. 13(2) of
the Constitution which states:
The State shall not make any law which takes away or abridges the rights
conferred by this Part and any law made in contravention of this clause shall,
to the extent of the contravention, be void.
Further, in
Maneka Gandhi v. Union of India[5], Indian jurisprudence evolved by
exploring the dynamics of arbitrariness and reasonableness in state action is violative of Article 14 and 21. In this case, it was clearly mentioned that, an
act of legislature or executive has to sustain the vice
of arbitrariness and reasonableness so as to be in conformity to the Article 14
and 21.
In the case of
R.D. Shetty v. International Airport Authority[6], the apex court
held that
The principle of reasonableness and rationality which is legally as well as
philosophically an essential element of equality or non-arbitrariness is
protected by Article 14 and it must characterize every State action, whether it
be under authority of law or in the exercise of executive power without making
of law
More recently, Pasayat J in
Sharma Transport v. Government of A.P[7] has
observed as follows:
The expression ‘arbitrarily’ means: in an unreasonable manner, as fixed or done
capriciously or at pleasure, without adequate determining principle, not founded
in the nature of things, non-rational, not done or acting according to reason or
judgment, depending on the will alone.
In the case of
A.L. Kalra v. Project and Equipment Corporation[8], the supreme
court opined that the Right enshrined in Article 14 does not only entails to the
comparative evaluation between two persons to arrive at a conclusion of
discriminatory treatment but also deals with any arbitrary action of
legislature or executive in general.
In light of the authorities discussed and provisions cited, it can be concluded
that every provisions and action of the legislature and executive should satisfy
the vice of the arbitrariness and reasonableness. However, the Banking Ombudsman
Scheme though created with an objective to ease the life of customers but it
does not provide provisions for condonation of delay at the original side but
provides same for at appellate side is arbitrary on this count as well as
ignores the fact that banking services have not yet successfully penetrated at
the rural and remote areas.
In such cases providing a window of just 30 days
without such provisions of condonation is against the principle of Article 14
and thus is violative. In this case, the said provisions article 13(2) of the
Indian Constitution, which reads as The State shall not make any law which takes
away or abridges the rights conferred by this Part and any law made in
contravention of this clause shall, to the extent of the contravention, be void
End-Notes:
- 1969 AIR 1335
- 1970 AIR 209
- 1977 AIR 523
- 1970 SC 898
- 1978 AIR 597
- (1979) 3 SCC 489
- (2002) 2 SCC 188
- (1984) 3 SCC 316, 328
Written By: Mr.Rishabh Paliwal
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