No Element Of Fraud Involved: Bombay HC Allows Plea Of Advocate Seeking Removal Of His Name From Caution List By Indian Banks’ Association

The Bombay High Court allowed the plea of an Advocate who sought removal of his name from the “caution list” by the Indian Banks’ Association.

An Advocate named Shailesh Vishwanath Jambhale had filed a writ petition seeking appropriate writ against the said association.

A Division Bench comprising A.S. Chandurkar and Justice Jitendra Jain said, “… the action of Respondent No.2 in placing the Petitioner on “Caution List” is liable to be quashed since there is no element of fraud involved even according to the Respondent Nos.1 and 2 coupled with the fact that the Petitioner is sought to be held negligent disregarding the opinion expressed by him in the title search reports. The Respondent Nos.1 and 2 would thus be required to delete the name of the Petitioner from the said “Caution List”.”

The short point for consideration that arose before the Bench was whether the Advocate could be held to be negligible so as to be placed in the “caution list”.

Advocate Vilas B. Tapkir represented the petitioner while Advocate Abhijeet Joshi represented the respondents.

In this case, the petitioner Advocate was empanelled as Panel Advocate of State Bank of Hyderabad in the year 2012, now merged with State Bank of India (SBI) and the General Manager (GM) of SBI entrusted work to him for obtaining Search and Title Report of the properties on which loan was to be sanctioned. In 2014, three Search and Title Reports with respect to three different properties were given by him to SBI GM. Thereafter, a loan was sanctioned on such properties and subsequently a fraud was unearthed regarding the loan sanctioned.

Pursuant to the aforesaid, a show cause notice was issued to the Advocate directing him to give his comments on the lapses in furnishing the Title and Search Report without due care and caution. He replied to the same and denied the allegations against him. In 2018, Chief Execution Officer of the Indian Banks’ Association stated that the Advocate’s name was placed on caution list in accordance with the guidelines issued by the association. He further advised the Advocate to approach the SBI for removing his name from the same. Hence, the petitioner approached the High Court.

The High Court in the above context observed, “If subsequently, title deeds are found to be faked, then the Petitioner cannot be held to be negligent since based on a perusal of the report, he can be said to have taken reasonable care and due diligence in discharging his duties. … It is important to note the guidelines issued by the Respondent No.1 to its branches with respect to Title cum Search investigation report. Clause 5 of the said guidelines expressly states that branch officials should independently inspect the property to be mortgaged and enquire into the possession of the property, tenancy rights, ownership, litigation, etc. in respect of the property and no loan should be released without completing independent physical inspection of the property offered as security.”

The Court further said that the reasons given for placing the petitioner on caution list were really the responsibility of the officials of SBI as per the guidelines which were not observed by the officials and hence, such responsibilities cannot be shifted to the petitioner to pass the buck.

“The Petitioner, assuming any case is made out for negligence (which according to us is not so) still, the Petitioner has already suffered for last 8 years and further the Petitioner has made a statement before us that he does not wish to get empanelled on the Panel of the Respondent No.1-Bank. In our view, it would be too harsh to keep Petitioner on “Caution List” forever. In our view, this would also justify the prayer sought to be made by the Petitioner in the present petition. … The Petitioner is justified in placing reliance on the decision of this Court in the case of Rajan Shrivallabha Deshpande (supra) to which one of us (Justice A. S. Chandurkar) is a party”, it noted.

Accordingly, the High Court allowed the petition and directed the removal of the petitioner’s name from the caution list.

Cause Title- Shailesh Vishwanath Jambhale v. The General Manager, State Bank of India & Ors. (Neutral Citation: 2024:BHC-AS:4317-DB)

Appearance:

Petitioner: Advocates Vilas B. Tapkir and Mrunmayi Khambete.

Respondents: Advocates Abhijeet Joshi, Advait Vajaratkar, and Varsha Sawant.

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