Bhaskar Bhattacharya, J. - (1.) This mandamus appeal is at the instance of the unsuccessful writ petitioners and is directed against order dated September 23, 2004 passed by a learned Single Judge by which His Lordship disposed of a writ application by holding that the Banking Ombudsman exceeded its jurisdiction in making observation on the merit of the claim of the writ petitioners when it rejected the complaint on the ground of want of jurisdiction.
(2.) The appellants before us filed a writ application against the respondents by which they claimed the following relief: "a) A writ of or in the nature of mandamus do issue commanding the respondent No. 1 to forthwith review and/or rescind and/or withdraw and/ or cancel the order dated April 25, 2003 and/or in any event, the observations contained therein relating to the merits of the claim of the petitioner No. 1 against the respondent No. 2; b) A writ of or in the nature of mandamus do issue commanding the respondent that the Reserve Bank of India's guidelines relating to rates of interest chargeable by members of consortium of banks are adhered to and followed by the respondent No. 2; c) A writ of or in the nature of mandamus do issue commanding the respondent No. 2 to forthwith review and/or rescind and/or revoke and/or cancel its claim against the petitioner No. 1 on the basis of interest rates higher than the rate applicable to the relevant consortium of banks; d) A writ of or in the nature of prohibition do issue restraining the respondent No. 1 from giving any effect or further effect to the order dated April 25, 2003 at least in so far as the observations contained therein relating to the merits of the claim of the petitioner against the respondent No. 2; e) A writ of or in the nature of prohibition do issue restraining the respondent No. 2 from claiming or realising in any manner any sum from the petitioner No. 1 on the basis of interest at any rate higher than the rate applicable to the consortium of banks which granted credit facilities to the petitioner No. 1 and of which the respondent No. 1 and of which the respondent No. 2 was a member; f) A writ of or in the nature of Certiorari do issue commanding the respondent No. 1 to forthwith transmit to this Hon'ble Court the records of the instant case culminating in the order dated April 25, 2003 and the observations on merits of the claim of the petitioner No. 1 against the respondent No. 2 as contained therein, so that the same may be quashed and conscionable justice be done; g) A writ of or in the nature of Certiorari do issue commanding the respondent No. 2 to forthwith transmit to this Hon'ble Court the records relating to the instant case and culminating in refusal on the part of the respondent No. 2 to limit its claim against the petitioner No. 1 on account of interest to the rate applicable to the consortium of banks that provided credit facilities to the petitioner No. 1 and of which the respondent No. 2 was a member, so that the same may be quashed and conscionable justice be done; h) Rule Nisi in terms of prayers above; i) Injunction restraining the respondent No. 2 from in any manner seeking to claim or realise any money from the petitioner No. 1 on the basis of any interest rate in excess of the interest rate as stipulated in the agreement dated May 15, 1989; j) Ad interim orders in terms of prayers above; k) Costs of and incidental to this applicable be paid by the respondent Nos. 1 to 3; 1) Such further order or orders be passed and/or direction or directions be given as to this Hon'ble Court may seem fit and proper."
(3.) The case made out by the appellants may be summed up thus: (a) The appellant No. 1 is a company registered under the Companies Act, 1956 and was engaged in the manufacture and sale of sulphuric acid, oleums, insoluble sulphur etc. The appellant No. 1 is a constituent of the respondent No. 2 and had been obtaining credit facilities from the respondent No. 2 from the year 1987. Such credit facilities were obtained pursuant to the agreement entered into by the between the appellant No. 1 and the respondent No. 2. (b) The credit facilities from the respondent No. 2 was a part of the consortium-borrowings from a consortium of banks of which Bank of Baroda, India Exchange Place, Calcutta, the respondent No. 4 was the lead bank. The interest charged by the Bank of Baroda, the respondent No. 4, in respect of the credit facilities made available by the Bank of Baroda to the appellant No. 1 under the consortium agreement was 16.5 per cent. At the relevant point of time, the consortium agreement was entered into by and between the appellant and the consortium of banks including the respondent No. 2 on May 15, 1989. According to the Reserve Bank of India circular, the effect of such agreement was that from various credit facilities under the consortium, the rate of interest would be uniform as decided by the consortium. (c) The interest rate applicable in respect of any consortium advance is based on the interest rate charged by the lead bank. Accordingly, in pursuance of the circulars framed by the Reserve Bank of India, the appellant No. 1 was liable to pay interest to each of the members of the bank of the said consortium at the rate fixed by the consortium and/or at the rate payable by the appellant No. 1 to the lead bank. (d) The respondent No. 2 had made a demand of interest from the appellant No. 1 at a rate higher than the rate specified in the agreement and at a rate higher than that charged by the Bank of Baroda from the appellant No. 1 and in such circumstances, the appellants made various representations to the respondent No. 2 to accept interest at the rate provided for under the agreement dated May 15,1989 notwithstanding any other previous agreement or arrangement, the appellant No. 1 might have had with the respondent No. 2. (e) By a letter dated February 9,1994, the appellants were duly informed the respondent No. 2 that the interest charged by the respondent No. 2 from the appellant was substantially in excess of the rate as charged by the lead Bank of the consortium, namely, the Bank of Baroda and it was in excess of the uniform rate by more than 4.2 per cent. (f) On the basis of the excess rate of interest arbitrarily levied by the respondent No. 2, the account of the appellant No. 1 had been debited by a sum in excess of Rs. 16.99 lakh between the period June, 1992 and December, 1993 and by the letter dated February 9, 1994, the appellants duly called upon the respondent No. 2 to adjust the additional interest charged by it to enable the appellants to pay off its balance dues. By subsequent letters dated July 4, 1994, November 21, 1994, December 20, 1996, May 5, 1997, August 21, 1997, June 18,1998, June 20, 2000, August 7, 2000, August 8, 2000, August 12, 2000 and further letters up to April 1, 2002 the appellants demanded refund of interest and proper calculation of the outstanding dues. (g) The respondent No. 2 represented to the appellants that the matter would be submitted to the higher authorities for consideration. The various representations mentioned above were finally decided by the respondent No. 2 by a letter dated December 4, 2001 and by such letter, the respondent No. 2 reiterated its earlier decision and rejected the claim of refund of interest by the appellants. (h) In accordance with the provision of the Banking Ombudsman Scheme, the appellants filed a complaint on April 8, 2002 against the decision of the respondent No. 2 contained in the letter dated December 4, 2001. (i) Ultimately, the respondent No. 1 turned down the claim of the appellants on the grounds that Clause 13 (3)(a) of the Banking Ombudsman Scheme, 2002 required lodging of complaint within a year from its demand being rejected by the bank and that the claim of the appellants was in excess of Rs. 10 lakh.;