Delhi High Court Stays Direction Mandating Second Level Human Review Of Rejected RBI Ombudsman Complaints

The Delhi High Court on Thursday stayed a direction issued by a single judge requiring that complaints finally rejected by the Reserve Bank of India (RBI) Ombudsman must undergo a second level of human supervision by legally trained personnel, such as retired judicial officers or lawyers with at least ten years' experience. A division bench comprising Chief Justice DK Upadhyaya and Justice Tejas Karia stayed the directive on an appeal filed by the RBI. For context, on November 27, the single judge had passed a batch of directions to strengthen the system to deal with customer complaints by RBI Ombudsman. RBI has challenged direction fifth which had said that if the complaint redressal mechanism adopted by the Ombudsman is made more effective and efficient, litigation in Courts and consumer forums can be reduced considerably.Appearing for RBI, SGI Tushar Mehta said that while issuing direction in question, the single judge has travelled beyond the scope of the power which can be exercised under Article 226 of Constitution of India. He said that the scheme which is directed to be rewritten is a statutory scheme framed under Section 35A of the Banking Regulation Act and Section 18 of Payment of Settlement Systems Act. SGI submitted that the scheme framed in terms of the said enactments can be altered or modified or changed only by the authorities empowered under the said laws. Prima facie finding force in SGI's submissions, the Court ordered:“Accordingly, we provide that till the next date of hearing, the directions contained in Section 47(5) of the impugned order shall remain stayed.”The matter is now listed on March 17.Advocate Suruchi Suri appeared for Citibank (respondent no.2) today.The single judge, in a detailed ruling, had directed RBI to take steps to ensure that all complaints filed by the customers are not rejected by the Ombudsman simply by a mechanised process. It had added that if there are any mistakes made by complainants, an opportunity ought to be given to them to correct any errors or mistakes. Title: RBI v. Sarwar Raza & Ors

Delhi High Court Stays Direction Mandating Second Level Human Review Of Rejected RBI Ombudsman Complaints

Nupur Thapliyal

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