Delhi HC Division Bench stays single judge's order mandating human review of RBI Ombudsman rejections

The interim stay was granted during the hearing of an appeal filed by the RBI challenging the directions issued by the single judge. The matter has now been listed for further hearing on March 17.

The Delhi High Court Division Bench, headed by the Chief Justice, on Thursday stayed a direction issued by a single judge which required that complaints finally rejected by the Reserve Bank of India Ombudsman must undergo a second level of human supervision by legally trained personnel, including retired judicial officers or advocates with at least ten years' experience. The interim stay was granted during the hearing of an appeal filed by the RBI challenging the directions issued by the single judge. The matter has now been listed for further hearing on March 17.

The appeal arises from a detailed judgment delivered by a single judge in November 2025, in which the Court issued a series of directions aimed at strengthening the RBI Ombudsman mechanism and making it more consumer-friendly. The single judge expressed strong dissatisfaction with the manner in which consumer complaints were disposed of, observing that many grievances were being rejected by automated or mechanical processes.

The Court had stated that such an approach defeats the very purpose of the Integrated Ombudsman Scheme, 2021, and leads to avoidable litigation before constitutional courts and consumer forums. Among the various directions issued, the most contested was a direction which mandated second-level human scrutiny of rejected complaints. The single judge had reasoned that introducing legally trained oversight would prevent dismissal of complaints on hyper-technical grounds and ensure that genuine grievances are not shut out due to minor procedural lapses.

The Court had also directed RBI to require banks to publish clear grievance redressal flowcharts on their websites and to strengthen the Ombudsman's infrastructure, and to call upon senior RBI officials to ensure effective implementation. Appearing for RBI, Solicitor General of India Tushar Mehta submitted 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. He contended that any alteration, modification, or restructuring of the scheme can only be carried out by authorities empowered under the parent statutes, and not by judicial directions, however well-intentioned.

After hearing the submissions, the Division Bench observed that the challenge raised substantial questions regarding the scope of judicial intervention in statutory regulatory frameworks. Granting interim protection to RBI, the Bench ordered that the operation of Direction 47(5) of the impugned single judge order shall remain stayed until the next date of hearing. The case is now scheduled to be taken up again on March 17, when the Court will examine the merits of RBI's appeal in greater detail. (ANI)

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