Case Note & Summary
The petitioner, a chartered engineer and government-approved valuer, filed a writ petition under Articles 226 and 227 of the Constitution of India seeking mandamus for removal of his name from the Third Party Entity (TPE) caution list published by the Indian Banks Association (IBA) and for continuation of his empanelment with respondent banks. He was empanelled with respondent No.4 (erstwhile Andhra Bank, now Union Bank of India) since 2004 and with respondent No.5 (Federal Bank) since 2021. In April 2018, he received a show cause notice from respondent No.3 (Union Bank of India) alleging serious irregularities in valuation of properties related to a loan transaction. He sought clarifications and copies of documents, but received no response. He submitted a reply in July 2018. Unaware of any adverse order, he later discovered that respondents No.3 and 4 had recommended inclusion of his name in the caution list, which was effected by respondent No.1 (IBA) on 22 May 2019. He learned of this when no work was assigned to him by the banks. The petitioner contended that the respondents failed to follow the procedural guidelines formulated by IBA, particularly Rules 5 and 6, which require constitution of an independent forum, granting opportunity to the third party to present his case, and taking a considered decision. He argued violation of natural justice as his reply was not considered, no hearing was afforded, and no final order communicated. He also asserted infringement of his fundamental right to practice profession under Article 19(1)(g). The court heard the matter and reserved orders on 8 January 2026. The judgment excerpt provided ends before the court’s analysis and final direction.
Headnote
A) Constitutional Law - Right to Practice Profession - Article 19(1)(g) of the Constitution of India, 1950 - Petitioner argued that inclusion in caution list without due process violates fundamental right to trade; any restriction must be by law under Article 19(6) (Para 6.4). B) Natural Justice - Principles of Natural Justice - Requirement of Fair Hearing - Indian Banks Association Procedural Guidelines - Petitioner alleged that no hearing was provided, show cause notice not followed by consideration of reply, violating natural justice (Paras 6.2, 6.3). C) Banking Regulation - Third Party Entities Caution List - Procedural Guidelines for Reporting Names of Third Parties involved in Frauds - Rule 5 mandates evaluation by a Forum; failure to constitute Forum and follow procedure renders inclusion invalid (Paras 6.7-6.9). D) Procedural Guidelines - Evaluation of Third Party Entity - Rule 6 of IBA Procedural Guidelines - Guidelines require evidence-based investigation, opportunity to explain, and communication of decision; petitioner contended these were bypassed (Paras 6.10).
Issue of Consideration
Whether the inclusion of the petitioner's name in the TPE caution list without following due process, in particular the procedural guidelines and principles of natural justice, violates his rights and requires mandamus for removal
Law Points
- Inclusion in caution list requires compliance with procedural guidelines
- failure to provide hearing violates natural justice
- right under Article 19(1)(g) affected
- need for forum evaluation under Rule 5 of Guidelines
