Recently, the Delhi High Court stayed a single judge’s direction requiring complaints rejected by the Reserve Bank of India (RBI) Ombudsman to undergo a second level of human scrutiny by legally trained personnel. Granting interim protection to the RBI, a Division Bench headed by the Chief Justice observed that the appeal raises substantial questions on the extent to which courts can intervene in statutory regulatory schemes, and ordered that the operation of the impugned direction shall remain in abeyance.
The case arose out of an appeal preferred by the RBI against a judgment delivered by a single judge of the Delhi High Court in November 2025, which examined the functioning of the Integrated Ombudsman Scheme, 2021. In that judgment, the single judge had issued a series of directions aimed at improving the grievance redressal mechanism administered by the RBI.
The single judge had expressed dissatisfaction with the manner in which consumer complaints were being disposed of, noting that a large number of grievances were rejected through automated or mechanical processes. The Court had observed that such an approach defeats the object of the Integrated Ombudsman Scheme and results in avoidable litigation before constitutional courts and consumer fora.
Among the directions issued, the most contentious required that complaints finally rejected by the Ombudsman be subjected to a second level of human supervision by legally trained individuals, including retired judicial officers or advocates with at least ten years of professional experience. The RBI challenged this direction before the Division Bench.
On behalf of the RBI, Solicitor General of India Tushar Mehta contended that the Integrated Ombudsman Scheme is a statutory scheme framed under Section 35A of the Banking Regulation Act and Section 18 of the Payment and Settlement Systems Act. It was submitted that any alteration, modification, or restructuring of the scheme can be undertaken only by authorities empowered under the parent statutes, and not through judicial directions, irrespective of their intent.
The appeal assailed the direction mandating second-level human review on the ground that it effectively rewrites the statutory scheme and travels beyond the permissible limits of judicial oversight.
After hearing the submissions, the Division Bench noted that the challenge raised substantial questions regarding the scope of judicial intervention in statutory regulatory frameworks. Taking note of the nature of the issues involved, the Court granted interim relief to the RBI and ordered that “the operation of Direction 47(5) of the impugned single judge order shall remain stayed” until the next date of hearing.
In light of the above, the Delhi High Court stayed the operation of the direction mandating second-level human scrutiny of RBI Ombudsman rejections. The appeal has been listed for further hearing on March 17, when the Court is expected to examine the merits of the RBI’s challenge in greater detail.
Source Link
Picture Source :
