BY AD v. SUNIL SHANKER

3. Sri. A. Krishnan – learned counsel for the petitioner, pointed out that his client is a separate entity from their members and that the Bank cannot exercise general lien, under Section 171 of the Indian Contract Act, over their properties, for the default of personal loans by the latter. He, then, argued that the foreclosure charges imposed upon his client are illegal and unlawful, going by the contractual terms; but that, even without assessing any of these aspects in its proper perspective, the Ombudsman has issued Ext.P4(a) in the afore manner; thus establishing without doubt that it has acted without proper application W.P.(C) NO.17535 OF 2022 -4- of mind and in a mechanical fashion. He, thus, prayed that the reliefs sought for in this writ petition be granted.

4. Sri. Sunil Shanker, appearing for the respondent Bank, however, submitted that the reasons why the Ombudsman has rejected the complaint of the petitioner is available from Ext.P4(a) order, particularly paragraph 2 thereof; and hence that the afore arguments of Sri. A. Krishnan are without basis. He pointed out that the Ombudsman has recorded the rival submissions of the parties in paragraph 2 of the order and thereafter, after evaluating the same, entered into an opinion that there was no deficiency in service. He submitted that Ext.P4(a) is a self speaking order, in which, the opinion of the Ombudsman was arrived at after evaluation of the rival positions and hence that it cannot be assailed by the petitioner for the reason that it does not contain reasons. He, thus, prayed that this writ petition be dismissed.

5. I have examined Ext.P4(a), which is the order impugned by the petitioner. As rightly argued by the petitioner, the Ombudsman has started the said order in W.P.(C) NO.17535 OF 2022 -5- paragraph 2 thereof, saying that the complainant (petitioner) “has complained regarding pre-closure charges and release of property” (Sic). Thereafter, it records the version of the Bank that “it gives a clear case for the Bank to retain the “Individual Secured Property” to the extent of “all outstanding dues whatsoever arising as result of the banks services extended to and/or used by the Borrower and/or as a result of the banks services extended to and/or used by the Borrower and/or as a result of any other facilities that may be granted to the borrowers.”

6. Interestingly, the Ombudsman, then, immediately moves on to his opinion that there is no deficiency in service, but absolutely no reasons are given in the order, as to how it arrived at such a finding.

7. This is pertinent because, as I have already recorded above, the specific case of the petitioner is that it is a registered Society, having independent identity distinct from its members and therefore, that default, if any, of the personal loans of the latter cannot mulct them; and thus that the Bank could not have invoked Section W.P.(C) NO.17535 OF 2022 -6- 171 of the Indian Contract Act and to claim a general lien over their properties. They also have a specific case that the pre-closure charges were imposed upon them unfairly; but nowhere in the impugned order has this been dealt with specifically, except recording the version of the Bank to the effect that “the party had agreed to pay for the charges and also clearance of all dues in the personal account of the guarantor.” (Sic)

8. Obviously, therefore this Court cannot find favour with Ext.P4(a), since it suffers from the vise of non- record of the reasons that lead to the opinion of the Ombudsman, that there was no deficiency in the service offered by the Bank. Of course, this is not to mean that this Court has concluded to the contrary; but solely that the Ombudsman was expected to assess each of the contentions and issue an order, containing valid reasons for his opinion. In the above circumstances, solely for the reasons above, and without entering into the merits of any other rival contentions, I allow this writ petition, and set aside W.P.(C) NO.17535 OF 2022 -7- Ext.P4(a); with a consequential direction to the Ombudsman to reconsider the complaint of the petitioner, after affording necessary opportunities to both sides; thus culminating in an appropriate fresh order, as expeditiously as is possible, but not later than four months from the date of receipt of a copy of this judgment. DEVAN RAMACHANDRAN JUDGE Sd/- W.P.(C) NO.17535 OF 2022 -8- APPENDIX OF WP(C) 17535/2022 PETITIONER'S EXHIBITS Exhibit P1 Exhibit P2 Exhibit P2(A) TRUE COPY OF THE REGISTRATION CERTIFICATE DATED 06.05.2009. TRUE COPY OF THE LETTER OF SANCTION/RENEWAL OF CREDIT FACILITY ISSUED BY RESPONDENTS DATED 18.04.2020, NO. BR/GEN/04/2020-21. TRUE COPY OF THE LETTER OF SANCTION/RENEWAL OF CREDIT FACILITY ISSUED BY RESPONDENTS DATED 10.06.2020, NO. BR/GEN/67/2020-21. Exhibit P3 TRUE COPY OF THE LETTER DATED 02.02.2022 ISSUED BY THE RESPONDENTS, BR/GEN/391/21-21. Exhibit P3(A) TRUE COPY OF THE RECEIPT DATED 08.02.2022 ACKNOWLEDGING PAYMENT OF PRE-CLOSURE CHARGES. Exhibit P4 TRUE COPY OF THE COMPLAINT DATED 14.05.2022 FILED BY PETITIONER BEFORE THE BANKING OMBUDSMAN. Exhibit P4(A) TRUE COPY OF THE ORDER DATED 09.05.2022 VIDE NO. RBI/CMS/N202122015008290/2021- 22.