MP High Court Issues Notice On Plea Challenging RBI's Ombudsman Scheme Prohibiting Filing Of Complaints Through Advocate

The Madhya Pradesh High Court, on Monday (October 13), issued notice on a petition challenging the vires of clause 10(2)(f) and 16(1)(a) of the RBI's Integrated Ombudsman Scheme 2021, which prohibits lodging of a complaint through advocate. 

For Context, Clause 10(2)(f) states that a complaint under the scheme shall not lie unless the complaint is lodged by the complainant personally or through an authorised representative "other than an advocate unless the advocate is the aggrieved person". 

Clause 16(1)(a) states that the Deputy Ombudsman or the Ombudsman may reject a complaint at any stage if it appears that the complaint made is non-maintainable under clause 10. 

The plea claims that the dispute originated in May 2024, when the petitioner joined an IIFL securities WhatsApp group through an Instagram link that promised free trading advice. A person named Ankit Kedia, posing as Chief Investment Officer, persuaded members to use a trading App which was allegedly fake. 

The petitioner invested ₹1,45,000 with a joining bonus of ₹5,000. However, when he later reached out to an official IIFL representative, he confirmed that the group was fraudulent and advised him to withdraw the funds immediately. On June 26, 2024, the petitioner successfully withdrew ₹ 1,65,874 from the App to his SBI Account. 

On December 12, 2024, at around 11 PM, the petitioner received an email from the SBI official account stating that an amount of INR ₹1,43,000 was put on hold from his account. The following day, an additional ₹1,43,000 was put on hold, thereby blocking the total funds in the account.

When the petitioner approached the bank for clarification, he was informed that the orders were issued at the instance of the SBI Cyber Crime Branch, Hyderabad, in connection with a cybercrime fraud involving ₹1,65,000. The transaction from the fake IIFL App to his account was flagged as suspicious by the Hyderabad Cyber Crime Branch, leading to his account being put on hold.

The petitioner alleged that a total of ₹2,86,000 was placed on hold without prior information, amounting to a violation of his constitutional, fundamental and statutory rights. He further submitted that despite emailing the Vigilance officers of Hyderabad Cybercrime Branch, no response was received. 

Subsequently, when the petitioner approached the RBI ombudsman, his complaint was rejected as non-maintainable on the grounds that it had been filed through an advocate. He argued that the order reflected a mechanical approach and a failure to adjudicate on the grievance on the merits. The petitioner claimed that while his earlier complaints were filed through an advocate, his last complaint was filed personally. Hence, the dismissal of the final complaint was arbitrary and illegal. 

Therefore, the petitioner claimed that Clauses 10(2)(f) and 16(1)(a) violated Section 30 of the Advocates Act and therefore should be scrapped. He further seeks quashing of the order rejecting his complaint under the scheme. 

It also seeks directions to the bank and police to collectively or severally pay the Rs. 1,43,000 along with the interest at the rate of 20 % compounded monthly, and Rs. 5,00,000 towards the loss of opportunity, mental harassment, agony. 

Section 30 of the Advocates Act empowers Advocates to practice (i) across courts across the country, (ii) before any tribunal or any person legally authorised to take evidence and (iii) before any other authority or person before whom such advocate is by or under any law for the time being in force, entitled to practise.  

"Issue notice to respondents, returnable after four weeks", the division bench of Chief Justice Sanjeev Sachdeva and Justice Vinay Saraf directed. 

Case Title Ashutosh Sisodiya v The Banking Ombudsman [WP-14224-2025]

For Petitioner: Advocate Pranay Pathak 

Click here to read /download the order