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CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 4445 OF 2015
M/s Railroad Logistics India Pvt. Ltd.
Through Its Director, Mrs. Sahana N. Shetty ...Petitioner
Co-operative Bank Ltd. And Ors ...Respondents
Adv. Nikhil Rajani, a/w Adv. Ajay Deshmane, i/by V. Deshpande &
Co. for Respondent No.1.
JUDGMENT
1. This Petition is filed under Article 226 of the Constitution of India calling upon this Court to quash and/or set aside the order dated 2 December 2012 in Complaint No.2028/LSK/10-11 passed by the Banking Ombudsman, under the Banking Ombudsman Scheme, 2006.
2. Heard learned counsel for the parties and with their assistance this Court has perused the record.
3. Rule. The Rule is made returnable forthwith with the consent of the parties.
4. The petition is arising out of the impugned order passed by the banking Ombudsman dated 2 February 2012 (“Impugned Order”). The petitioner in light of the several grounds raised in this petition seeks to quash and set aside this order, for which the present writ petition is preferred before this Court.
5. At the outset the Impugned Order dated 2 February 2012 passed by the banking Ombudsman reads thus:- “Shri Vijaykumar Rai For Railroad Logistics (India) Pvt. Ltd. C/o Metal Trim, Gala No.1 Tankiwala Indl. Estate Steel Made Compound Marol-Maroshi Road Marol, Andheri (E), Mumbai - 400 059 Dear Sir, Banking Ombudsman Scheme 2006 (BOS-2006) Complaint No.: 2028/LSK/10-11 Bank: Shamrao Vithal co-op. Bank Ltd. Please refer to your complaint dated September 12, 2011against captioned bank addressed to Banking Ombudsman of Karnataka, Bangalore,
2. In this regard we have to state that the bank has shown the documentary evidence that preclosure charges have been agreed to you as per the sanction letter/agreement. Processing charges are levied every year and in the earlier years, you have paid them as per the agreement/sanction letter. In this case the processing charges were levied on the company for the renewal of the facilities/ The processing was done and facilities to the extent of eligibility were sanctioned. The bank incurred charges for processing the renewal of facilities It is another matter that you have not accepted it. Irrespective of acceptance you have to pay the charges having applied for renewal and not withdrawn the application.
3. In view of the above we have rejected the complaint in terms of clause 13 (a) of BOS-2006 as not on the grounds of complaint referred to in clause 8 of BOS-2006.
4. This is issues according to the direction of the Banking Ombudsman/ Yours faithfully, (L.S.Kore) Asst. Secretary”
6. On hearing the parties for sometime, it appears that the transaction between the parties is in the nature of a contract which governs the relationship between the parties. The dispute arises out of payment of processing charges which were levied on the Petitioner for renewal of the facilities. The Petitioner has also challenged the impugned order on the ground of foreclosure charges levied which according to the Petitioner are contrary to law.
7. Upon hearing the learned counsel for the parties and perusing the record, it appears that the matter raises substantial disputed issues/questions of fact. These are summarised below:- (a) The relationship between the parties is contractual in nature. As averred in the Petition, the Petitioner was a customer of Respondent No.1 – Bank since the year 1992 for the purpose of availing cash credit facility and term loans. The tenure of the said facility commenced from April to March of every financial year. (b) It is out of such relationship that the Bank had levied charges for processing of the renewal facilities, sought to be availed by the Petitioner.
(c) According to the Bank – Respondent, the Petitioner has not accepted such renewal. The said disputed fact is recorded in the impugned order. According to the Petitioner, such renewal by the Respondent No.1 – Bank was unauthorised and unlawful, done with malafide intent for dishonest gain.
(d) From a bare perusal of the prayers in the Petition, more particularly, prayer (c) where the Respondent No.1 – Bank is directed to pay an amount of Rs.20,68,648/- along with interest from the date of debit, to the Petitioner. Therefore, evidently the relief is clearly for recovery of money raising a monetary claim in the present Writ Petition.
8. What is evident from the above is that this Writ Petition is not maintainable much less entertainable for reasons more than one. It is trite law that a Writ Petition is not maintainable in cases where there are disputed questions of fact, as noted above. Further, the Petitioner seeks to make a claim for recovery of the amount of Rs.20,68,648/- which cannot be done in a Writ Petition. A remedy for such money recovery lies elsewhere, i.e. in a Civil Suit.
9. Our Courts in various decisions have reiterated the legal position as to non-maintainability of a Writ Petition in the above narrated situation. Illustratively, the Supreme Court in State of Bihar vs. Jain Plastics and Chemicals Ltd.[1] observed thus:- “Settled law writ is not the remedy for enforcing contractual obligations. It is to be reiterated that writ petition under Article 226 is not the proper proceeding for adjudicating such disputes. Under the law, it was open to the respondent to approach the Court of competent jurisdiction for appropriate relief for breach of contract. It is settled law that when an alternative and equally efficacious remedy is open to the litigant, he should be required to pursue that remedy and not invoke the writ jurisdiction of the High Court. Equally, the existence of alternative remedy does not affect the jurisdiction of the Court to issue writ, but ordinarily that would be a good ground in refusing to exercise the discretion under Article 226.”
10. A coordinate Bench of this Court headed by the Hon’ble the Chief Justice in Suprabhat Lala vs. National Stock Exchange Ltd. and Ors.[2] had the occasion to deal with such issues. The Court reiterated that it is well-settled that contractual and commercial
2 Writ Petition No.4018 of 2024 decided on 16 October 2025 obligations are enforceable by ordinary civil action and not by judicial review under Article 226 of the Constitution of India. It is not necessary that the powers of judicial review under writ jurisdiction must be exercised only because it is found that the authority is a State.
11. It is apposite to now refer to a decision of a coordinate Bench of this Court in Sansar Texturisers Pvt. Ltd. vs. Union of India & Ors.3. In this case, the Court was dealing with a Writ Petition challenging the validity of certain notifications providing for a levy of anti-dumping duty paid in relation to certain imports. The Court observed that the primary intention of the Petitioner was to seek refund of money, under the garb of challenge to the notification. What is underneath is a money claim and thus a Writ Petition for a money claim simplicitor would not be maintainable. Against this decision, a SLP was preferred which was Dismissed by an order dated 12 July 2024 in SLP (Civil) Diary No.17323 of 2024.
12. Mr. Raje, learned counsel for the Petitioner tendered a copy of the Banking Ombudsman Scheme, 2006 which was prevalent at the relevant time. Clause 5 of the said scheme reads thus:- “(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 lakh rupees whichever is lower.”
13. A perusal of the above would indicate that the Ombudsman shall not have the power to pass an award directing payment of the amount as noted in the said clause. Thus, it appears that the
3. Writ Petition No.343 of 2024 decided on 22 January 2024 Ombudsman has passed the impugned order duly taking into account the said scheme, relevant clause of which is reproduced (supra). Be that as it may. We at this stage are not delving into the merits of the impugned decision.
14. Mr. Rajani, learned counsel for the Respondent No.1 has placed on record a decision of a Single Judge of the Madras High Court in Monotech Systems Ltd. vs. Standard Chartered Bank and Ors.[4] passed in an identical situation, as in the present case. He would therefore urge that the same would be relevant in the given factual complexion.
15. A perusal of the above decision would indicate that the dispute there was in relation to prepayment charges as well as renewal charges under a contract between the Bank and the customer. The Court, on considering the rival submissions held that borrowing is a matter of contract between the Bank and the Petitioner. Parties are bound by such contract. If such contract provides for certain charges, in certain contingencies, the same will have to be paid. The Writ Court cannot examine the correctness of such contract. As the present case also involves term loan which is contractual in nature, the observations in the said judgment would be apposite in the given factual matrix.
16. For all of the above reasons, this Court is of the considered view that this Writ Petition is not maintainable. At this stage, learned counsel for the Petitioner fairly states that he would adopt the alternate remedy of filing the suit in the Court of competent jurisdiction. He is permitted to do so.
17. It is clear from the record that this Petitioner has been
4 Writ Petition No.3077 of 2015 decided on 2 February 2023 pursuing this petition bonafide. There are no mala fides attributed and/or alleged in this regard. Mr. Raje has stated that he has filed the proceedings before the Ombudsman way back in the year 2012 and there has been no delay in that regard. Mr. Rajani disputes this.
18. As far as the issue of limitation is concerned, as noted above the Petitioner was bonafide pursuing this Petition. The Petitioner ought not to be non-suited only on this ground. Mr. Rajani insists/urges that the Respondent No.1 be permitted to raise the issue of limitation before the Trial Court of competent jurisdiction. If so raised, the Court shall, considering the above factors, decide the issue of limitation accordingly after hearing the parties.
19. It is made clear that this Court has not expressed any opinion on merits of the rival contentions of the parties which are not gone into at this stage. The same are left expressly open.
20. The following order, in my view, would meet the ends of justice:- ORDER i) The Petitioner is permitted to pursue the alternate remedy of filing a suit in the Court of competent jurisdiction. ii) All contentions of the parties including that of maintainability, entertainability or otherwise in the same proceedings if so filed, are expressly kept open. iii) The Trial Court of competent jurisdiction shall hear the parties and decide the Suit if so filed by the Petitioner herein. This would be on its own merits and in accordance with law, subject to the observations made above, inter alia, on the issue of limitation.
21. Writ Petition is disposed of in the above terms. No costs. [ADVAIT M. SETHNA, J.]