The Division Bench of the Delhi High Court in the case of M/S Gka Impex Pvt Ltd vs Reserve Bank of India & Ors. consisting of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad reiterated that the remedy provided under Article 226 is not intended to supersede the modes of obtaining relief before a civil court or to deny defences legitimately open in such actions. Further, it was opined that writ courts, in the exercise of their writ jurisdiction, do not substitute their conclusions for the ones arrived at by the expert bodies, unless the decision is perverse.
Brief Facts:
The Appellant had a current account with the Oriental Bank of Commerce (Punjab National Bank (‘the PNB’). Through its director, the Appellant wanted to transfer Rs. 15 Lakhs to M/s JV Capital Services Pvt. Ltd. (‘the JCSPL’) via Real Time Gross Settlement (‘RTGS’). The RTGS form was filled up by the director’s daughter, who had limited knowledge of bank dealings, and filled in JCSPL’s name as the remitter instead of the Petitioner and the name of “Ficus Securities Pvt. Ltd.” (‘FSPL’) instead of JCSPL who was supposed to be the beneficiary. FSPL was a proprietary concern and the Appellant’s Director had dealings with FSPL. The next day when the Director realised his mistake, he sent a request to the PNB for recalling the transaction. But only Rs.4.5 lakhs were reversed on the same day as FSPL’s account had been blocked and Rs.10.5 lakhs had been retained by the National Stock Exchange (‘the NSE’). The Appellant filed a complaint before the Banking Ombudsman of the Reserve Bank of India.
Contentions of the Appellant:
It was contended that PNB violated Clauses 11.1 and 11.11 Real Time Gross Settlement (RTGS) Regulations, 2013 issued by RBI (hereinafter referred to as “the RTGS Regulations”).
Clause 11.1 of the RTGS Regulations states that the transaction-originating member will carry out due diligence while sending the payment request to the RTGS system and the originating member should also ensure two-factor authentications while originating a payment transaction.
Clause 11.11 of the RTGS Regulations provides that the participant/member banks must mandatorily provide Debtor Name (the ordering customer) and Creditor Name (the beneficiary customer). Moreover, the RTGS form filled by the Appellant contained wrong particulars of both the ordering customer and the beneficiary customer and despite the same, the transaction was negligently executed by the Bank.
Procedural History:
The Banking Ombudsman refused to entertain the complaint and held that as per Clause 11.2 of the RTGS Regulations, Credit under customer transactions, received by the RTGS member in its Settlement Account through the RTGS System, must be ultimately credited to the beneficiary’s account based on the account number in the payment message.
The Appellant approached this Court for a direction to set aside this Order. It also prayed for a direction to the RBI and PNB to strictly comply with the guidelines, carry out strict due diligence before initiating any financial transaction and reverse the amount of Rs.10.5 lakhs to its account from the account of NSE. The learned Single Judge vide Order impugned herein found that the mistake had occurred due to the Appellant’s negligence and that it could not be permitted to take advantage of its wrong and blame the Bank.
Hence, this appeal.
Observations of the Court:
The Bench noted the Banking Ombudsman held that in this case, the message form with all the essential information was provided by the remitter and there was no cutting/overlapping/overwriting therein. So, the Bank acted in good faith and with full prudence. It further noted that the Banking Ombudsman, created only to deal with the disputes between the Bank and customers, held in favour of the Bank. It was for the Appellant to either approach the Consumer Protection Forum or file a Suit to substantiate its case by leading evidence.
Regarding Article 226, it relied on Swetambar Sthanakwasi Jain Samiti v. Alleged Committee of Management Sri R.J.I. College, Agra and Ghan Shyam Das Gupta v. Anant Kumar Sinha to reiterate that:
“Though the jurisdiction of the High Court under Article 226 of the Constitution is not confined to issuing the prerogative writs, there is a consensus that the High Court will not permit this extraordinary jurisdiction to be converted into a civil court under the ordinary law… Where the civil court has the jurisdiction to try a suit, the High Court cannot convert itself into an appellate or revisional court and interfere with the interim/miscellaneous orders of the civil court.”
It further noted that whether Clause 11.2 or Clause 11.1 & 11.11 would be applicable, the matter of remittance of Rs 10.5 lakhs and the obvious mistake on the part of the Appellant in filling up the RTGS form and its effect must be decided by leading evidence by both the parties in an appropriate forum. Based on the material available, it could not be said that the Banking Ombudsman’s decision was perverse and required interference under Article 226. Moreover, it is well settled that writ courts, in the exercise of their writ jurisdiction, do not substitute their conclusions for the ones arrived at by the expert bodies, unless the decision is perverse.
The decision of the Court:
The Bench did not find any reason to interfere with the Order passed by the Banking Ombudsman which had been upheld by the learned Single Judge in the Order impugned herein. Accordingly, this appeal was dismissed.
Case Title: M/S Gka Impex Pvt Ltd vs Reserve Bank of India & Ors.
Case No: W.P.(C) 254/2023
Coram: Hon’ble Chief Justice Satish Chandra Sharma, Hon’ble Justice Subramonium Prasad
Advocates for Appellant: Advs. Mr. Mukesh M Goel, Ms. Priya.
Advocates for Respondents: Advs. Mr. S K Sharma, Ms. Shivani Khandekar, Mr. Gokul Holani, Mr. Ishan Bisht
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