Delhi High Court scolds RBI Ombudsman for not working properly

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The Delhi High Court has reprimanded the RBI Ombudsman for passing an unreasoned order, stating that the Reserve Bank-Integrated Ombudsman Scheme, 2021, cannot be reduced to a mere promise.

What is the case?

Justice Kaurav was dealing with a plea moved by an entity namely MB Power Limited challenging the rejection of its complaint made to the principle nodal officer of ICICI Bank with a copy to RBI Ombudsman.

The Ombudsman, while taking cognizance of the representation, sent a pre-emptive rejection to the company in December last year. Thereafter, on April 15, a formal complaint was made before the Ombudsman.

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It was the petitioner entity’s case that an unreasoned order of rejection of the complaint was passed by the Ombudsman reiterating the earlier rejection. Another rejection order was passed in May.

What court said?

The court observed that the RBI Ombudsman is entrusted with quasi-judicial functions and is expected to pass well-reasoned orders. Any attempt to bypass this requirement would erode public trust in the Ombudsman’s functioning.

The court’s remarks came while hearing a plea filed by an entity challenging the rejection of its complaint by the Ombudsman. The Ombudsman had rejected the complaint without assigning any reasons.

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The court set aside the Ombudsman’s order and directed the Ombudsman to reconsider the complaint in accordance with law. The court also directed the Ombudsman to pass a reasoned order after hearing the parties.

The court’s ruling is a reminder that the RBI Ombudsman is not above the law and is bound to follow the principles of natural justice. The ruling is also a victory for complainants who have been subjected to arbitrary decisions by the Ombudsman.

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