IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 3RD AUGUST 2011 / 12TH SRAVANA 1933 WP(C).No. 20143 of 2011(P) ---------------------------------------- PETITIONER(S): --------------- 1. JOSE JOHN.K,AGED 44,S/O.K.A.JOHN, PROPRIETOR,M/S.J.K.CONSTRUCTIONS,MAIN AVENUE, PANAMPILLY NAGAR P.O, ERNAKULAM,COCHIN- 682 036, KANAYANNUR TALUK,ERNAKULAM DISTRICT. 2. K.A.JOHN,AGED 82, S/O.ABRAHAM, KUNUKKASSERY HOUSE,PANAMPILLY NAGAR P.O, ERNAKULAM,COCHIN- 682 036, KANAYANNUR TALUK,ERNAKULAM DISTRICT. 3. PAULI @ THRESSIA,AGED 72, W/O.K.A.JOHN,KUNUKKASSERY HOUSE,PANAMPILLY NAGAR P.O, ERNAKULAM,COCHIN 682 036, KANAYANNUR TALUK,ERNAKULAM DISTRICT. BY ADV. SRI.K.C.ELDHO SRI.JIJO THOMAS RESPONDENT(S): --------------------------- 1. INDIAN OVERSEAS BANK,REP.BY ASSISTANT GENERAL MANAGER,ERNAKULAM BRANCH,M.G.ROAD, ERNAKULAM,PIN CODE- 682 035,ERNAKULAM VILLAGE, KANAYANNUR TALUK,ERNAKULAM DISTRICT. 2. THE AUTHORISED OFFICER,INDIAN OVERSEAS BANK,ERNAKULAM BRANCH,M.G.ROAD, ERNAKULAM,PIN CODE- 682 035,ERNAKULAM VILLAGE, KANAYANNUR TALUK,ERNAKULAM DISTRICT. 3. THE BANKING OMBUDSMAN, OFFICE OF THE BANKING OMBUDSMAN,RESERVE BANK OF INDIA, THIRUVANANTHAPURAM.PIN- 695 033. 4. THE CHIEF REGIONAL MANAGER,INDIAN OVERSEAS BANK,REGIONAL OFFICE, THIRUVANANTHAPURAM 695 001. R1 & R2, R4 BY ADV. SRI.P.B.SURESH KUMAR, SC,I.O.BANK THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03/08/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts WP(C)NO.20143/2011 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF THE REPRESENTATION DATED 13/05/2010 SUBMITTED BY THE 1ST PETITIONER BEFORE THE 1ST RESPONDENT. P2 COPY OF THE RENEWAL LETTER OF THE OD FACILITY DATED 28/02/2011. P2(A) COPY OF THE RENEWAL LETTER OF THE OD FACILITY DATED 28/02/2011. P3 COPY OF THE REPRESENTATION DATED 12/11/2010 P4 COPY OF THE COMPLAINT DATED 25/05/2011 SUBMITTED BY 1ST PETITIONER BEFORE THE 3RD RESPONDENT. P5 COPY OF THE DEMAND NOTICE DATED 02/06/2011 P6 COPY OF THE OBJECTION BY WAY OF REPLY NOTICE DATED 17/06/2011. P7 COPY OF THE POSTAL ACKNOWLEDGMENT CARD SIGNED BY THE 2ND RESPONDENT. P8 COPY OF THE DEMAND NOTICE RECEIVED BY THE PETITIONERS 2 AND 3. P9 COPY OF THE OBJECTION BY WAY OF REPLY NOTICE DATED 20/06/2011. P10 COPY OF THE POSTAL ACKNOWLEDGMENT CARD SIGNED BY THE 2ND RESPONDENT. P11 COPY OF THE REPLY DATED 05/05/2011 CAUSED TO BE ISSUED BY THE 2ND RESPONDENT. P12 COPY OF THE REPLY DATED 05/05/2011 CAUSED TO BE ISSUED BY THE 2ND RESPONDENT. P13 COPY OF THE POSTAL ENVELOP, WHICH CONTAINTED EXHIBIT P10. P14 COPY OF THE POSTAL ENVELOP,WHICH CONTAINED EXHIBIT P11. P15 COPY OF THE COMMUNICATION ISSUED BY THE 3RD RESPONDENT. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.A.TO.JUDGE sts S.SIRI JAGAN, J. ================== W.P.(C).No. 20143 of 2011 ================== Dated this the 3rd day of August, 2011 J U D G M E N T The petitioners availed of an over draft facility from respondents 1, 2 and 4. In respect of the same, certain disputes arose. According to the petitioners, on account of the actions of the 1st respondent, the petitioners have suffered loss and, therefore, they filed an application before the Banking Ombudsman seeking reliefs in respect of the same. In the meanwhile, respondents 1, 2 and 4 initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“the Act”) for recovery of amounts due as per the account. The Ombudsman, by Ext.P15 order, refused to entertain the application on the ground that he has pecuniary jurisdiction only up to ` 10 lakhs and since the petitioners have claimed compensation to the tune of ` 1 crore, The Ombudsman does not have jurisdiction in the matter. The petitioners seek the following reliefs; “a. Call for the records leading to Exhibit P15 and quash the same by issuing a writ of certiorari or any other appropriate writ, order or direction. b. Declare that the 2nd respondent do (sic) note have any authority to proceed with Exhibit P5 notice as it has not complied with the mandatory procedure prescribed under Sec. 13(3A) of the SARFAESI Act. c. Issue a writ of mandamus or nay other appropriate writ, order or direction compelling the 3rd respondent to consider Exhibit P4 w.p.c.20143/11 2 on merits and pass appropriate orders thereon in accordance with law with the assistance of the 4th respondent officer.” 2. As far as the challenge against proceedings under the Act is concerned, it is settled law that the aggrieved person can approach the Debts Recovery Tribunal under Section 17 of the Act only when the financial institutions take a measure under Section 13(4). Admittedly, no measure has been taken under Section 13(4) yet. Therefore, the challenge against the proceedings under the Act is clearly premature. The Supreme Court has time and again held that the aggrieved person cannot take recourse to Section 17 unless a measure under Section 13 (4) has been taken by the financial institution. 3. As far as Ext.P15 order of the Ombudsman is concerned, I do not find any infirmity in the same in view of clause 12(5) of the Banking Ombudsman Scheme, 2006, which reads thus; “12. Award by the banking ombudsman.- (1) ... xxx xxx xxx xxx (5) Notwithstanding anything contained in sub-clause (4), the Banking Ombudsman shall not have the power to pass an award directing payment of an amount which is more than the actual loss suffered by the complainant as a direct consequence of the act of omission or commission of the bank, or ten lakhs rupees whichever is lower.” (underlining supplied) The same clearly shows that his pecuniary jurisdiction is below ` 10 lakhs. The petitioners have claimed ` 1 crore as compensation, which is clearly beyond the pecuniary jurisdiction of the Ombudusman. Therefore, in view of clause 12(5) of the Banking Ombudsman w.p.c.20143/11 3 Scheme, his jurisdiction is clearly barred. Therefore, there is no merit in the challenge against Ext.P15 order also. But I make it clear that if the petitioners file an amended claim making it within the four corners of clause 12(5), the Banking Ombudsman shall entertain the same and dispose of the same on merits. In this connection, I also note the contention of respondents 1, 2 and 4 that the Banking Ombudsman does not have jurisdiction to deal with questions involving proceedings under the Act. I am of opinion that in filing an application seeking compensation for alleged illegal act of the Bank, the petitioners do not challenge proceedings under the Act before the Banking Ombudsman and, therefore, the jurisdiction of the Ombudsman is not barred in that respect. Of course, the Banking Ombudsman has to confine himself to the jurisdiction vested in him while dealing with the application of the petitioners. He shall not in any way deal with proceedings under the Act while considering the claim of the petitioners. The writ petition is disposed of as above. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge