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

1. 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:

1. 1969 AIR 1335
2. 1970 AIR 209
3. 1977 AIR 523
4. 1970 SC 898
5. 1978 AIR 597
6. (1979) 3 SCC 489
7. (2002) 2 SCC 188
8. (1984) 3 SCC 316, 328
   
   Written By: Mr.Rishabh Paliwal
   
   

   Authentication No: AG023068132123-17-820