Advocates cannot represent complainants before RBI ombudsman, rules Madras High Court

Madras High Court upholds RBI-IOS 2021, prohibiting advocates from representing complainants before ombudsman, citing statutory rights.

The Madras High Court has upheld the Constitutional validity of the Reserve Bank of India - Integrated Ombudsman Scheme (RBI-IOS) 2021 which prohibits complainants from engaging advocates to represent their cases in proceedings before the ombudsman.

A Division Bench of Justices S.M. Subramanian and C. Kumarappan refused to declare provisions 3(1)(c) and 10(2(f) of the RBI-IOS 2021 unconstitutional. It held that advocates enjoy only a statutory right and not a fundamental right to appear before judicial and quasi judicial fora.

N.A. Srinivasan, a practising advocate, had filed a writ petition in 2022 challenging the two provisions of the RBI-IOS 2021 which enables customers of banks, non-banking financial companies (NBFCs), payment system participants and credit information companies to get their grievances redressed.

The scheme permits the complainants to approach the ombdusman either directly or through authorised representatives but makes it clear that the latter should not be an advocate. The writ petitioner contended that such a bar imposed on advocates was unreasonable and arbitrary.

When the authorised representative of a complainant could be a chartered accountant or any other professional, there was no reason why advocates alone should be cherry-picked and prohibited from participating in proceedings before the RBI ombdusman, the petitioner argued.

On the other hand, senior counsel Vijay Narayan, representing RBI, contended that the objective of the integrated ombdusman scheme was to resolve customer grievances, related to deficiency in service on the part of banks and NBFCs, in a speedy, cost-effective and satisfactory manner.

Therefore, the scheme consciously prohibits the process of engaging advocates and it could not be faulted with, the senior counsel said. He relied upon a couple of Supreme Court judgements to support his argument that there was no unconstitutionality in the bar imposed on advocates.