Case Note & Summary
The petitioner, an advocate empanelled as a panel advocate for State Bank of Hyderabad (now merged with State Bank of India), provided search and title reports for three properties in 2014. Based on these reports, the bank sanctioned loans. Subsequently, a fraud was unearthed regarding these loans. The bank issued show cause notices to the petitioner in 2015 and 2016, but without any further proceedings, the petitioner's name was included in the caution list maintained by the Indian Banks' Association. The petitioner filed a writ petition under Articles 226 and 227 of the Constitution seeking removal of his name from the caution list. The court found that the inclusion was done without any prior notice or opportunity of hearing to the petitioner, violating principles of natural justice. The court directed the Indian Banks' Association to remove the petitioner's name from the caution list within two weeks. The court also noted that the caution list is a serious measure that can affect an advocate's career and must be used with due process.
Headnote
A) Constitutional Law - Natural Justice - Audi Alteram Partem - Caution List - Inclusion without hearing - The petitioner, a panel advocate, was included in the caution list by the Indian Banks' Association based on a request from State Bank of India without any prior notice or opportunity of hearing. The court held that such inclusion without hearing violates principles of natural justice and directed removal of the petitioner's name from the caution list. (Paras 1-10) B) Banking Law - Caution List - Panel Advocate - Right to Hearing - The caution list is a database shared among banks to flag individuals involved in fraud. Inclusion without hearing can severely affect the professional reputation and livelihood of an advocate. The court emphasized that even if the list is internal, the consequences warrant adherence to natural justice. (Paras 5-10)
Issue of Consideration
Whether the inclusion of the petitioner's name in the caution list by the Indian Banks' Association without affording him an opportunity of hearing is violative of principles of natural justice.
Final Decision
The court allowed the petition and directed Respondent No.2 (Indian Banks' Association) to remove the petitioner's name from the caution list within two weeks from the date of the order.
Law Points
- Natural Justice
- Audi Alteram Partem
- Caution List
- Panel Advocate
- Right to Hearing
- Article 226
- Article 227
