TaxTMI 
TaxTMI 
2003 (7) TMI 581
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.... Letters Patent filed against the judgment and order dated 12-8-2002 passed by the learned Single Judge dismissing writ petition filed by the appellants herein. The petition was directed against the order dated 19-3-2002 passed by the Ombudsman in Complaint No. 133/2000-01 under the Banking Ombudsman Scheme, 1995. 3. Since this Court proposes to pass an order of remand, it is not necessary to set out all the facts in detail. Suffice it to state that the Ombudsman had framed four issues for examination, but the controversy now survives only about issue No. 1. Hence the other issues are not at all referred to. Issue No. 1 about which the controversy survives, was framed as under: "Whether the bank did/does not observe the guidelines/....
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....e credit appraisal of the borrower's proposal. Since the matter relating to credit rating is a matter connected with credit decision of the bank, it may not be possible for the office to intervene in such matters." 4. The learned Counsel for the appellants has submitted that though the issue was specifically raised before the Ombudsman, the Ombudsman refused to exercise his jurisdiction and the learned Single Judge has dismissed the petition only on the ground that the dispute between the parties is based on facts and, therefore, it will not be possible for the Court to intervene in such matters in exercise of its extraordinary jurisdiction. It is submitted that since the controversy between the parties was very much capable of being loo....
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....the following terms insofar as it is relevant for the purposes of this petition: "As regards banking services, the Banking Ombudsman's authority will include- (a)all complaints concerning deficiency in service, such as: ****** (vii)complaints pertaining to the operations in any savings, current or any other account maintained with a bank, such as delays, non-credit of proceeds to parties' accounts, non-payment of deposits/non-observance of the Reserve Bank directives, if any, applicable to rate of interest on deposits; (b)complaints concerning loans and advances only insofar as they relate to: (i )non-observance of Reserve Bank directives on interest rates. ****** (iii)non-observance of any other directions or instru....
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....rocedures for credit rating. 8. In para 6 of the affidavit-in-reply, the respondent bank has stated that taking into consideration various parameters and credit policies of the bank in conformity with RBI guidelines, the Bank has to take prudent banking decision after applying necessary parameters and observing the operation of account being maintained by the borrower and as per H.O./RBI guidelines, the Bank has upgraded credit rating of the appellants' account from P-III to P-II-B with effect from 1-3-1997 and thereafter from P-II-B to P-II-A with effect from 1-1-2000. Mr. Jani for the respondent bank has, therefore, submitted that the respondent bank has acted in conformity with the RBI guidelines and, therefore, the appeal deserves to....
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....netheless, the Ombudsman would have to broadly examine on the basis of repayment record as may be submitted by the bank and to consider whether the credit rating given by the bank to the complainant borrower can be said to be reasonable. If the Ombudsman finds that the credit rating given by the respondent bank to the complainant borrower is so arbitrary that no reasonable banker would give such a poor credit rating to the borrower, it cannot be said that the Ombudsman is without any power to give appropriate relief to the complainant. Since even for giving credit rating, the respondent bank relies on Reserve Bank directives as well as its Head Office circulars, the borrower's grievances against the poor credit rating can certainly form par....