SRI. SWARUPANANDA GOUDA K S vs INDIAN BANKS ASSOCIATION

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®

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 24 DAY OF FEBRUARY, 2026

BEFORE


THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

WRIT PETITION NO. 30058 OF 2024 (GM-RES)

BETWEEN

SRI. SWARUPANANDA GOUDA K S
S/O SANTHAVEERA GOUD.K.S.
AGED ABOUT 60 YEARS,
CHARTERED ENGINEER AND GOVT. APPROVED VALUER,
ND
NO 713,”VAGDEVI” 42 CROSS,
TH
12 MAIN, NEAR ESI, 3RD BLOCK,
RAJAJINAGAR, BANGALORE-560 010.
... PETITIONER

(BY SRI. PRABHU N. SAVANUR., ADVOCATE)

AND











1. INDIAN BANKS ASSOCIATION

CENTRE-1, 6TH FLOOR,
CENTRAL BUILDING,
WORLD TRADE COMPLEX,
CUFFE PARADE, MUMBAI-400 005,
REPRESENTED BY ITS CHIEF EXECUTIVE OFFICER,


2. RESERVE BANK OF INDIA,
SHAHID BHAGATH SINGH ROAD,
FORT, MUMBAI-400 005,
REPRESENTED BY ITS GENERAL MANAGER,


3. UNION BANK OF INDIA,
UNION BANK BHAVAN,
NO.239, VIDHAN BHAVAN MARG,
NARIMAN POINT, MUMBAI, 400 021.
REPRESENTED BY ITS
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER

Digitally signed
by SHWETHA
RAGHAVENDRA
Location: HIGH
COURT OF
KARNATAKA

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4. UNION BANK OF INDIA,
(FORMER ANDHRA BANK' ZONAL OFFICE)
ST
REGIONAL OFFICE, SWARNA CITY CENTER, 1 FLOOR,
STATION ROAD, HUBBALLI -580 020,
REPRESENTED BY ITS REGIONAL MANAGER,


5. THE FEDERAL BANK,
FEDERAL TOWERS, MARKET ROAD,
PERIYAR NAGAR, ALUVA-683 101,
KERALA STATE,
REPRESENTED BY MANAGING DIRECTOR AND
CHIEF EXECUTIVE DIRECTOR


…. RESPONDENTS
(BY SMT. DIVYA PURANDAR., ADVOCATE FOR R1, R3 & R4;
SRI. B.S. JEEVAN KUMAR., ADVOCATE FOR R5;
SRI. PRADEEP S. SAWKAR., ADVOCATE FOR R3)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR ALL
RELEVANT RECORDS PERTAINING TO PLACING THE PETITIONERS
NAME IN THE TPE CAUTION LIST ISSUED BY THE 1ST RESPONDENT
AND ISSUE A WRIT OF MANDAMUS APPROPRIATE WRIT ORDER OR
DIRECTION AS THE CASE MAY BE, BY DIRECTING THE 1ST
RESPONDENT TO FORTHWITH REMOVE THE NAME OF THE
PETITIONER FROM THE TPE CAUTION LIST PUBLISHED BY THE 1ST
RESPONDENT WITH THE FURTHER DIRECTION TO CONTINUE THE
EMPANELMENT OF THE PETITIONER BY THE RESPONDENTS 3 TO 5
AND GRANT THE PETITIONER SUCH OTHER FURTHER RELIEF WITH
THE APPROPRIATE DIRECTION OR ORDER AS THIS HONBLE COURT
DEEMS FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE
CASE AND ALSO IN THE INTEREST OF JUSTICE AND EQUITY AND
ALLOW THIS WRIT PETITION WITH COSTS.


THIS WRIT PETITION COMING ON FOR ORDERS AND HAVING
BEEN RESERVED FOR ORDERS ON 08.01.2026, THIS DAY, THE
COURT PRONOUNCED THE FOLLOWING:

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

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CAV ORDER


1. The Petitioner is before the Court seeking for the
following reliefs:
“Call for all relevant records pertaining to placing
the Petitioner's name in the TPE Caution List
issued by the 1st Respondent and issue a Writ of
Mandamus or any other appropriate Writ Order or
Direction as the case may be, by directing the 1st
Respondent to forthwith remove the name of the
Petitioner from the TPE Caution List published by
the 1st Respondent with the further direction to
continue the empanelment of the Petitioner by the
Respondents 3 to 5 and grant the Petitioner such
other further relief with the appropriate direction
or order as this Hon'ble Court deems fit to grant in
the facts and circumstances of the case and also
in the interest of justice and equity and allow this
writ petition with costs.”

2. The Petitioner is a civil engineer by profession and
has been empanelled with Respondents No.4 and 5 –
banks. Insofar as respondent No. 4 is concerned, he
was earlier empanelled in 2004 with Andhra Bank,
which, upon its amalgamation, became Union Bank
of India. Insofar as respondent No.5 is concerned, he
was empanelled in 2021.

3. The Petitioner claims that the Petitioner has had a
blemishless record as a property valuer of
respondents No.3/4 for over one and a half decades.
The contention of the Petitioner is that the Petitioner

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received a show cause notice on 10.4.2018 via email,
wherein it was alleged that the Petitioner had
committed serious irregularities in the valuation of
properties pertaining to the loan transaction of
Hagarabommanahalli branch of respondent No.3. The
Petitioner replied to the same on 9.6.2018 seeking
certain information, clarification, and copies. No
response having been received to the request, a
reply was submitted by the Petitioner on 23.7.2018.

4. In the meantime, the Petitioner contends that he had
had several correspondences with respondent No.4
to supply certain papers. However, there was no
response from respondent No.4. While things stood
thus, the Petitioner contends that he came to know
of the recommendation made by respondents No.3
and 4 to include the Petitioner's name in the caution
list of third-party entities maintained by respondent
No.2, which was so done by respondent No.1 on
22.5.2019.

5. This allegedly came to the knowledge of the
Petitioner when the Petitioner made inquiries as to
why no work had been allotted/assigned to him by
respondents No.4 and 5. It is on account of the said
inclusion of the name of the Petitioner in the caution

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list, that the Petitioner is before this Court seeking
the aforesaid reliefs.

6. The submission of Sri. Prabhu N. Savanur, learned
counsel for the Petitioner is that

6.1. Respondents No.3 and 4 have not followed the
procedure prescribed by the Indian Banks
Association-respondent No.1.

6.2. The inclusion of the name of the Petitioner in
the caution list is violative of principles of
natural justice inasmuch as, except for the
issuance of a show cause notice dated
10.4.2018, there is no other correspondence
that has been issued.

6.3. The reply, which has been submitted by the
Petitioner, has not been considered. No hearing
has been provided to the Petitioner. The Order
passed thereon has not been communicated to
the Petitioner. His submission is also that the
mandatory procedure prescribed in terms of the
procedural guidelines for Reporting Names of
Third Parties involved in Frauds to IBA
(Respondent No.1) for inclusion in the caution
list has also not been followed.

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6.4. The inclusion of the name of the Petitioner has
an adverse impact on the fundamental right to
practice trade and profession; such right has
been adversely affected, thereby violating the
fundamental right of the Petitioner under Article
19(1)(g). Even if it were to be held that the
right of the Petitioner can be subject to Article
19 (6), the same would have to be done in
terms of applicable law and by following the
due procedure.

6.5. His submission that even in terms of the
Procedural Guidelines, it was required that any
Reporting of Third Parties to IBA for inclusion in
the caution list should be done only after giving
the party concerned a fair opportunity to be
heard, and such decisions should be made after
a detailed examination at an appropriate level.

6.6. A working group had also been formed to
discuss and prepare procedural guidelines for
member banks to follow, and in pursuance of
which the draft guidelines had been formulated.
The Petitioner, though, comes within the
definition of a Third Party Entity ( TPE ) engaged
by a bank, and the guidelines may be

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applicable thereto; it is, however, required of
respondents No.3 and 4-banks, and of
respondent No.1-association, to comply with
the guidelines in their letter and spirit. His
submission is that Rule 5 of the said guidelines
is mandatorily required to be followed.

6.7. Rule 5 is reproduced hereunder for easy
reference:
5. Forum to evaluate the role of a Third Party
Entity in a fraud/loss event it is proposed that an
independent and empowered forum be set up to
evaluate the 5. Forum to evaluate the role of a
Third Party Entity In a fraud /loss event role of
TPEs in fraud cases.
a. Composition of the Forum
The Forum could consist of 3 to 5 members of
sufficient seniority from the various control
functions, One person among the above members
will play role of coordinator. This could typically be
the group which reports frauds to RBL. The group
which had used the services of TPE shall also be
part of the Forum to decide on the particular case,
While the Chief Vigilance Officer of the bank could
be a member of the Forum, the Forum shall not
have any of the persons who investigated the
case.
b. Quorum
The Forum meetings would have a quorum of any
2/3 members.

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c. Periodicity of meetings
The Forum would meet as and when the fraud
investigation team of the bank presents a fraud
/loss event investigation report in which there is
an evidence-based conclusion about the
involvement of a TPE In the perpetration of the
fraud. As soon as the investigation team presents
this report, the meeting of the Forum will need to
be convened, not later than 10 working days after
the submission of the report by the Investigation
team. The proceedings of the meeting may be
recorded and kept in file.
d. Functions of the Forum
•
To receive investigation reports containing the
details of involvement of TPEs in frauds, from the
investigation team.
•
To seek explanation in writing from the TPES, in
order to provide an opportunity to the TPE to
present his case".
•
To discuss and evaluate the responses and seek
further clarifications, if any.
•

To decide on the involvement or otherwise of the
TPEs in the frauds.
•
To recommend inclusion of the TPE in the
'cautionary list'.
(the Working Group did not find it feasible to *
provide for a personal hearing to the TPE to
defend his action considering logistics involved.
However, banks could take a case specific view in
the matter, depending on the gravity of the case).

6.8. By relying on Rule 5, he submits that a forum is
required to be formed to evaluate the role of a

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Third Party entity like the Petitioner as regards
any allegation of fraud or loss, which is required
to consist of three to five members of sufficient
seniority from various control functions who is
required to receive reports, seek explanation in
writing from the TPE, provide an opportunity to
the TPE to present his case, to discuss and
evaluate the response, and seek further
clarification, and to decide on the involvement
or otherwise of the TPE in the frauds before
recommending the inclusion of a TPE in the
caution list.

6.9. His submission is that though a personal
hearing is not required to be provided, the
same would have to be considered on a case-
specific basis and the gravity of the matter. He
relies on guideline No.6, which is reproduced
hereunder for easy reference:
6. Process of evaluation of involvement of
TPE and reporting to IBA
a. Investigating teams in the bank should prepare
product-wise standard investigation procedure,
including a detailed checklist of points to be
covered in a case. This should include whether a
TPE contributed to the credit evaluation process
and whether his contribution was bonafide or
malafide or whether there was gross negligence.

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b. If during the investigation of a fraud, it
emerges that third parties are involved, the
investigation report should contain the details of
the third parties and the extent of involvement in
the fraud (negligence or malafide intention).
c. The investigation report would get forwarded in
the normal course, to the group reporting frauds
to RBI, for reporting the same in the Frauds
Reporting and Monitoring System (FrMS).
d. Within 10 days of the receipt of such report,
the Forum meeting should be convened.
e. The Forum would review the report put up by
the investigation team.
f. The Forum will be guided by the principles of
natural justice and act independently and
impartially.
g. The Forum will take a considered view when
isolated cases of negligence /gross negligence on
the part of the TPE is reported as to the
desirability of recommending inclusion of the TPE
in the caution list. It may not be fair to caution list
a TPE for a reported instance of negligence when
malafide intentions are not involved.
h. If the Forum feels that the intentions of the TPE
were malafide, the Forum will ask the concerned
business/operations group to write to the TPE
concerned and seek explanation for his/her action.
i. The TPE will be asked to reply to the letter
within 15 days of receipt of the letter.
j. If the TPE replies with an explanation for his/her
action, a meeting of the. Forum will be convened
and the reply discussed.

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k. If the members of the Forum feel that the
explanation given by the TPE is logical and
acceptable, they will convey the same to the
group. A record of the same will be kept. A letter
will be sent to the TPE by the concerned group
conveying the same.
l. If the members of the Forum do not find the
explanation to be acceptable, they will
recommend sending of the name of the TPE to
IBA.
m. Accordingly, the Forum will send the name to
IBA in the format specified by IBA (Annexure V).
This will also be conveyed to the TPE by the
concerned group in the form of a written
communication.
n. The step of informing IBA about a TPE's
involvement in fraud will be independent of the
possibility of the bank raising the matter with the
regulatory bodies of the expert TPEs (e.g.
Institute of Chartered Accountants of India, Bar
Council of India, etc.) as well as filing FIRs against
them. The Forum will separately take those
decisions based on the circumstances of each
case,
o. The Forum will also send the name to the group
maintaining the centralized database of TPEs, for
updating the same.

6.10. By relying on guideline No.6, his submission is
that an investigation team in the bank is
required to prepare a product-wise standard
investigating procedure; such a procedure has
not been formulated, nor has it been provided

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to the Petitioner. An investigation report, when
submitted, is required to categorically state the
involvement of the TPE and the extent of
involvement in the fraud by specific reference
to negligence or malafide intention. Such an
investigation report is required to be forwarded
to the working group.

6.11. On receipt of the said report, the Forum, which
will review the report put up by the
investigating team and on that basis, and the
Forum being guided by the principles of natural
justice, is required to act independently and
impartially and take a considered view as to
whether to include a TP in the caution list or
not.

6.12. His submission is that when an isolated case of
negligence / gross negligence is reported, it
would not be fair to include the TPE in the
caution list. But to only include if they are
malafide intentions, which are involved.

6.13. Thus, he submits that there is a requirement to
categorically indicate not only the alleged
default/negligence, but also the mental element
and intention.

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6.14. It is only when the Forum feels that the
intention of the TPE was malafide, a letter or a
notice is to be issued to the TPE seeking an
explanation for his / action. On the reply of the
TPE, a meeting of the Forum is to be convened
and discussed. If the explanation is found to be
logical, accept it and convey it to the concerned
TPE. If the members of the Forum do not find
the explanation to be acceptable, they are
required to recommend the sending of the
name of the TP to IBA in the format specified at
Annexure-5.

6.15. Based on the above, the submission of Sri
Prabhu N. Savanur, learned counsel for the
Petitioner, is that there has to be a fraud, which
has been committed by the TPE, there has to
be an intention to commit a fraud and not mere
negligence or gross negligence. Such fraud
should not be isolated but recurring, and only
then could the Forum seek an explanation.

6.16. Even this explanation would have to be
considered to ascertain if it is logical or
acceptable, and only if not acceptable by
recording reasons, a recommendation for

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inclusion in the caution list can be made. These
guidelines, he submits, have not been followed
by respondents No.3 and 4 or by the forum,
requiring respondent No.1 to include the name
of the Petitioner in the caution list.

6.17. In this regard, he relies upon the following
decisions:

6.18. He relies upon the decision of the Hon’ble in the
case of Shri H.T. Vasudev vs. State Bank of
1
India & Ors . more particularly, Paras 10 and
11 which are reproduced hereunder for easy
reference:
10. In my considered opinion, the alleged
discrepancies in the extent and location of the
property available at the spot in relation to the
property documents is to be scrutinized and
assessed by the legal counsel of the bank and not
by the petitioners, who are merely civil engineers
and approved valuers, whose duties and
responsibilities are to inspect the property and
submit their report regarding the valuation on the
basis of the guideline value and actual market
value by taking into consideration all relevant
parameters, which does not include scrutiny of the
title documents and property records, which would
lie in the realm of scrutiny by the legal counsel
and not by the petitioners. Similarly, the legality,
validity, genuineness and authenticity of the
documents furnished by the borrower to the bank

1
WP No.22386/2022 c/w WP No.17989/2022 dated 3.7.2024

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would necessarily have to be assessed and
examined by the legal counsel of the bank and not
by the petitioners, who are not qualified or eligible
or entitled to render any opinion in this regard,
which is beyond their skill and expertise, which
solely vests with the legal counsel; in other words,
it is the sole duty and responsibility of the legal
counsel of the bank to give necessary advice by
scrutinizing the title deeds and documents after
obtaining the valuation report furnished by the
petitioners, who cannot be attributed with
professional misconduct on account of
discrepancies in either the property documents or
location / extent of the property in respect of
which they submitted their valuation report. To
put it simply, the various allegations and claim
made by the respondent – bank describing /
categorizing the valuation report submitted by the
petitioners as an act of professional misconduct
clearly has no nexus / connection whatsoever with
the nature of duties and responsibilities to be
fulfilled and performed by them while submitting a
report. Under these circumstances, I am of the
considered opinion that the petitions deserved to
be disposed of by issuing necessary directions to
the respondents to remove the names of the
petitioners from the TPE Caution List and by
issuing further directions in this regard.

11. In the result, I pass the following:
ORDER
(i) W.P.No.22386/2022 is hereby allowed.
(ii) The impugned Communication at Annexure – F
dated 01.08.2022 is hereby quashed.

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iii) The 3rd respondent – Indian Banks Association
is directed to remove / delete the name of the
Petitioner from the TPE Caution List and issue a
fresh / new list by deleting the name of the
Petitioner and also upload the fresh / new list
without the name of the Petitioner in its website
www.iba.org.in as expeditiously as possible and at
any rate within a period of four weeks from the
date of receipt of a copy of this Order.
(iv) The respondent Nos.1 and 2 – bank is also
directed to take necessary steps to delete the
name of the Petitioner from the TPE Caution List
or any other list showing/ indicating the name of
the Petitioner as disempanelled /depanelled valuer
of the bank within a period of four weeks from the
date of receipt of a copy of this Order.
(v) It is however made clear that this Order will
not come in the way of Respondent Nos.1 and 2 –
bank taking necessary steps not to renew the
services of the Petitioner or to continue the
services of the Petitioner as a valuer by passing
appropriate orders in this regard and liberty is
reserved in favour of Respondent Nos.1 and 2 to
do so, in accordance with law.
(vi) W.P.No.17989/2022 is hereby allowed.
(vii) The 1st respondent – Indian Banks
Association is directed to remove / delete the
name of the Petitioner from the TPE Caution List
and issue a fresh / new list by deleting the name
of the Petitioner and also upload the fresh / new
list without the name of the Petitioner in its
website www.iba.org.in as expeditiously as
possible and at any rate within a period of four
weeks from the date of receipt of a copy of this
Order.

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(viii) The respondent No.2 – bank is also directed
to take necessary steps to delete the name of the
Petitioner from the TPE Caution List or any other
list showing /indicating the name of the Petitioner
as disempanelled /depanelled valuer of the bank
within a period of four weeks from the date of
receipt of a copy of this Order.
(ix) It is however made clear that this Order will
not come in the way of Respondent No.2 – bank
taking necessary steps not to renew the services
of the Petitioner or to continue the services of the
Petitioner as a valuer by passing appropriate
orders in this regard and liberty is reserved in
favour of Respondent No.2 to do so, in accordance
with law.

6.19. Placing reliance upon the decision of this Court
in H.T. Vasudev it is submitted that the ratio
laid down in the said judgment squarely applies
to the facts of the present case and governs the
controversy at hand.

6.20. In the said decision, this Court had occasion to
examine the scope of duties and responsibilities
of a civil engineer functioning as an approved
valuer of a bank. The Court, after analysing the
nature of allegations levelled therein,
categorically held that discrepancies relating to
the extent and location of property vis-à-vis
title documents are matters to be scrutinised by
the legal counsel of the bank and not by the

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valuer. It was observed that the duty of a
valuer is confined to physical inspection of the
property and submission of a valuation report
based upon guideline value, prevailing market
value and other technical parameters relevant
to valuation. The scrutiny of title deeds,
verification of ownership, assessment of
genuineness and legality of documents, and
examination of documentary authenticity lie
within the exclusive domain of the legal counsel
engaged by the bank.

6.21. The Court in Vasudev further held that a
valuer, who is neither legally qualified nor
authorised to render opinions on title or
documentary validity, cannot be fastened with
professional misconduct on account of
discrepancies in property records or defects in
title documents. It was specifically observed
that such allegations lack nexus with the nature
of duties performed by a valuer and, therefore,
inclusion of the valuer’s name in the TPE
Caution List on that basis was unsustainable.

6.22. On that reasoning, this Court quashed the
impugned communication and directed the

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Indian Banks’ Association to remove the name
of the Petitioner therein from the TPE Caution
List and issue a fresh list deleting his name.
Simultaneously, liberty was reserved in favour
of the concerned bank to take appropriate
action regarding continuation or renewal of
empanelment in accordance with law, thereby
drawing a clear distinction between contractual
empanelment and stigmatic industry-wide
caution listing.

6.23. Placing reliance upon Vasudev , learned
counsel submits that the present case stands
on an identical footing. The Petitioner herein is
also a civil engineer and approved valuer. The
allegations levelled against him pertain to
valuation in relation to a loan transaction.
There is no categorical finding of fraud,
collusion, or malafide intent. The alleged
discrepancies, even if assumed, relate to
matters that do not fall squarely within a
valuer's professional remit but lie within the
domain of title verification and documentary
scrutiny.

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6.24. It is therefore contended that, as in Vasudev ,
the impugned inclusion of the Petitioner’s name
in the TPE Caution List suffers from the absence
of a nexus between the alleged irregularities
and the professional duties of the Petitioner.
The action, being stigmatic in nature and
having industry-wide adverse consequences,
cannot be sustained in the absence of a clear
finding of misconduct within the scope of the
Petitioner’s professional obligations and strict
adherence to the procedural safeguards
contemplated under the guidelines.

6.25. On these premises, learned counsel submits
that the ratio of Vasudev directly applies and
that the Petitioner is entitled to similar relief of
removal of his name from the TPE Caution List,
while leaving it open to the concerned banks to
take such action as may be permissible in law
with regard to empanelment.

6.26. He relies upon the decision of the Hon’ble this
Court in the case of Veershetty vs. The
2
Chairman, IBS & ors., more particularly,
Paras 4, 6 and 7 which are reproduced
hereunder for easy reference:

2
WP No.202453/2023 dated 11.11.2024

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4. It is the grievance of the Petitioner that
though the Petitioner complied with the terms
and conditions of the agreements entered into
between the petitioner and respondent Nos.2
to 5 - Banks and did not violate any of the
terms and conditions of the empanelment of
the Petitioner with the aforesaid Banks,
respondents 2 to 5 have proceeded to issue
the impugned letters/orders at Annexure - D
dated 12.12.2022, Annexure - H dated
08.06.2023, Annexure – J dated 11.05.2023
and Annexure – K dated 11.0.2023 without
providing sufficient or reasonable opportunity
to the Petitioner nor considering his replies or
hearing the Petitioner, thereby, violating
principles of natural justice and as such, the
Petitioner is before this Court by way of the
present petition.
6. A perusal of the material on record will
indicate that though the Petitioner has
submitted detailed replies to the notices issued
by respondent Nos.2 to 5 - Banks, the said
respondents have not considered the same and
have proceeded to terminate the services of
the Petitioner and disempanelled the Petitioner
from their respective Banks, without providing
sufficient or reasonable opportunity to the
Petitioner, thereby, violating principles of
natural justice and on this ground alone, I am
of the considered opinion that the impugned
letters/orders at Annexures - D, H, J and K
issued by respondent Nos. 2 to 5, respectively,
deserve to be set aside and the matter
remitted Back to the respondent Nos.2 to 5 for
reconsideration of afresh in accordance with
law.
7. In the result, I pass the following:

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ORDER
i) The writ petition is allowed.
ii) The impugned letters/orders at Annexure –
D, H, J and K are hereby set aside. Matter is
remitted back to respondent Nos.2 to 5 for
reconsideration afresh in accordance with law.
iii) Liberty is reserved in favour of the
Petitioner to submit his pleadings, replies,
documents, etc., to respondent Nos.2 to 5,
who shall consider the same and provide
sufficient and reasonable opportunity to the
Petitioner and proceed further and take
appropriate decision/pass appropriate orders in
accordance with law.
iv) Respondent No.1 - Association is directed to
furnish caution-list to the Petitioner within a
period of four weeks from the date of receipt of
a copy of this Order.
v) Respondent No.1 is also directed to remove
the name of the Petitioner from the IBATP
caution-list within a period of four weeks from
the date of receipt of a copy of this Order.

6.27. Placing reliance upon the decision of this Court
in Veershetty, it is submitted that the
principles laid down in the said judgment
reinforce the Petitioner’s contention that the
impugned action is vitiated for violation of
natural justice.

6.28. In Veershetty , the grievance of the Petitioner
therein was that, despite compliance with the

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terms and conditions of empanelment and
submission of detailed replies to the notices
issued by the concerned banks, the services of
the Petitioner were terminated and he was
disempanelled without sufficient or reasonable
opportunity and without due consideration of
his replies. The Court, upon perusal of the
material on record, recorded a finding that the
replies submitted by the Petitioner had not
been considered and that the banks had
proceeded to terminate and disempanel him in
violation of the principles of natural justice.

6.29. The Court held that, on that ground alone, the
impugned letters and orders deserved to be set
aside and the matter required reconsideration
in accordance with the law. Consequently, the
orders of termination and disempanelment were
quashed, and the matter was remitted back for
fresh consideration after affording sufficient and
reasonable opportunity to the Petitioner.
Further, the Indian Banks’ Association was
directed to remove his name from the IBATP
caution list within a stipulated time.

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6.30. Placing reliance on the aforesaid judgment,
learned counsel submits that the present case
stands on a similar footing. Here also:

6.30.1. The Petitioner had submitted replies to
the show cause notice;

6.30.2. He had sought documents and
clarifications;

6.30.3. No material has been placed to show
consideration of his reply;

6.30.4. No reasoned order has been
communicated;

6.30.5. The inclusion in the TPE Caution List was
effected without affording sufficient or
reasonable opportunity.

6.31. It is contended that, as held in Veershetty ,
non-consideration of the Petitioner’s reply and
failure to provide a reasonable opportunity
constitute sufficient ground to set aside the
impugned action. The principle emerging from
the said decision is that even in matters of
empanelment or caution listing, where civil
consequences ensue, strict adherence to

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principles of natural justice is indispensable.
Any action taken in breach thereof is liable to
be interfered with in the exercise of writ
jurisdiction.

6.32. On these premises, learned counsel submits
that the impugned inclusion of the Petitioner’s
name in the TPE Caution List, having been
effected without due consideration of his reply
and without communication of any reasoned
decision, is liable to be quashed, with
appropriate consequential directions in line with
the relief granted in Veershetty .

6.33. He relies upon the decision of the Hon’ble High
Court of Telangana in the case of
M/s.G.P.Sankaram and Associates vs.
3
Union Bank of India and ors., more
particularly, Paras 3, 5, 9, 13 and 14 which are
reproduced hereunder for easy reference:
3. The learned counsel for the petitioner firm
further submitted that the petitioner firm
received a show cause notice dated 25-11-
2016 from the respondents stating that there
was a fraud in seven housing loan accounts
with its Hitech City branch and asked the
Petitioner to explain why they should not be
placed in caution list of Indian Banks'

3
WP No.1036/2019 dated 18.7.2022

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Association. The petitioners filed a detailed
reply to the said notice on 07-12-2016
rebutting all the allegations. The Petitioner
approached the respondents several times
personally and through representations
seeking their response after submitting reply
seeking to know the status, but in vain. The
Petitioner received a letter dated 29-11-2018,
from the circle office of Canara Bank, Himayat
Nagar, Hyderabad, stating that the
respondents placed them in the Indian Banks'
Association Caution List of Third Party Entities
(TPE), for the alleged irregularities reported by
one of the member banks for discrepancies in
valuation. Their enquiries revealed that it was
the respondents who placed the petitioners in
the said list to the detriment of the petitioners.
There was a standard procedure established
before removing a panel valuer by the banks.
There were as many as three steps
contemplated for the same. The first step
would be to issue Show Cause notice and
receive an explanation for the same. The
second step would be hearing wherein the
valuer was given an opportunity to be heard so
that his view point was made known. The third
step would be deliberation by the Committee.
The respondents followed the first step, but not
the other two steps and hence violated the
procedure established in the said connection.
The respondents thus hastily and illegally
depanelled them with malafide intention to
cause damage to the Petitioner's reputation.
The abrupt termination of their services by the
respondents caused immense hardship. The
threat of the respondents to inform other
banks about putting the name of the Petitioner
in the IBA Caution List would damage their
reputation

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5. Perused the record. The record would
disclose that a show cause notice was issued
by the Andhra Bank on 25.11.2016 to the
petitioner firm stating that they observed fraud
in 7 housing loan accounts with Hitech City
Branch. On the basis of the valuation report
submitted by the Petitioner, the bank financed
the housing loan account against the security
provided to the bank and gave the details of
the borrowers. The details of the primary
security and the discrepancies with regard to
the primary security as observed by them were
stated in the show cause notice and it was
further stated that the properties had not been
identified correctly and that the Petitioner was
negligent in their duties, which led to
perpetration of fraud by the borrowers and
builder. Due caution was not taken in property
valuation and the valuation report was based
on the statement of the borrower which led to
wrong identification of the properties. Thus,
the Petitioner had fallen short in meeting the
service standards by not giving proper
attention in identifying the properties and
made the bank to credit losses and asked the
Petitioner to show cause his explanation as to
why his name should not be entered in IBA
caution list. A reply was given by the Petitioner
on 07.12.2016. The Petitioner explained that
they were asked by the Hitch City Branch of
Andhra Bank during the year 2011 to assess
the plots being built on land in Sy.No. 100/A
and they were informed that the bank had
already released the loan and the report from
them was only to fulfil the official
procedure/formalities. They observed a
discrepancy regarding name of the apartment.
The copies of the documents served on them
would indicate the name of the apartment as

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"Sai Alex", but the name painted there was
'Sai Avenue and the same was brought to the
notice of the bank with a note on the same in
their report. The property was jointly identified
by the valuer along with the bank officers Sri
Nageswara Rao & Ms. Priyadarshini. After four
years they were asked to revalue the same
and copies of the same documents which were
given to them earlier during the year 2011
were provided and they again highlighted the
discrepancy regarding the name of the
apartment, but the bank took it lightly.
9. For the same reason in the year 2018, a
detailed circular was issued by the bank for
guidance of the Controlling Officers vide
Circular No.139 dated 20.07.2018. The
relevant clause is para-XIII in the said Circular
and the same is pertaining to de-panelling of
the valuers. The same is extracted for ready
reference.
"XIII. Guidelines for calling explanation where
approved valuers were negligent and their
certification turns out to be untrue and
factually in correct, exposing the Bank to
avoidable risks, Depaneling and Reporting to
IBA for placing the name in Third Party Caution
List.
1. Circle Office of the respective zone, upon
receipt of request for depanelment from zone,
will assess the need if warranted, will issue a
Show Cause Notice duly signed by the Circle
General Manager to the Valuer marking a copy
to Zonal Office.
2. The reasons for depanelment should be
spelt out clearly in the notice

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3. The valuer has to submit his reply within 15
days to Circle Office marking a copy to Zonal
Office
4. Zonal Office on receipt of reply from the
Concerned Valuer, has to give their views and
Recommendations to Circle Office taking into
account the explanation given by the Valuer
5. Circle office after examination of the
explanation along with the views of zonal office
shall decide about depanelment and
communicate the same to the empanelled
Chartered Engineer/Firm. A copy of the same
has to be marked to CMRD Head Office."
13. Thus, no opportunity was provided to the
Petitioner to know the reasons for their
depanelment after submitting their explanation
and the said views of the Zonal Office deciding
about their depanelment was also not
communicated to the petitioners as required
under clause (5) of Para-XIII of the guidelines
of the Controlling Offices issued vide Circular
No.139 dated 20.07.2018. Non-compliance of
the principles of natural justice by the
respondent Bank amounts to arbitrariness in
dealing with the matter. Deleting the name of
the person from the rolls or panel without
assigning any reasons is unfair and arbitrary
and hence, it is considered fit to allow the writ
petition.
14. Accordingly, the writ petition is allowed
declaring the action of the respondents 1 and 2
in removing the partners of the petitioner firm
from the panel of approved valuers as violative
of principles of natural justice and the 4th
respondent is directed to remove the name of

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the petitioner firm from the caution List of the
Third Party Entities. No order as to costs.


6.34. Placing reliance upon the judgment of the
Hon’ble High Court of Telangana in Sankaram
it is contended that the principles laid down
therein squarely apply to the case on hand.

6.35. In the said decision, the petitioner firm, an
approved valuer, had received a show cause
notice alleging fraud in certain housing loan
accounts and calling upon it to explain why its
name should not be placed in the caution list
maintained by the Indian Banks’ Association.
The firm submitted a detailed reply rebutting
the allegations and made repeated
representations seeking a response. However,
without any further communication or hearing,
it was subsequently informed that its name had
been placed in the IBA Caution List at the
instance of the bank.

6.36. The grievance urged before the Telangana High
Court was that, though the initial step of
issuing a show cause notice had been complied
with, the subsequent mandatory procedural

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safeguards were not followed. It was contended
that the established procedure contemplated (i)
issuance of notice, (ii) opportunity of hearing,
and (iii) deliberation by a competent committee
before taking a decision on depanelment and
reporting to IBA. The bank, however,
proceeded only with the first step and omitted
the remaining safeguards.

6.37. Upon perusal of the record, the High Court
examined the factual background in detail. The
show cause notice referred to discrepancies in
the identification of properties and alleged
negligence on the part of the valuer. The reply
submitted by the petitioner firm explained the
circumstances under which the valuation was
undertaken and noted that discrepancies had,
in fact, been highlighted to the bank at the
relevant time. The Court also referred to
Circular No. 139 dated 20.07.2018, which
contained specific guidelines governing
depanelment and reporting to the IBA. Clause
XIII of the said Circular required, inter alia,
that:

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6.37.1. Reasons for depanelment be clearly spelt
out in the notice;

6.37.2. The valuer be given 15 days’ time to
submit a reply;

6.37.3. The Zonal Office examines the
explanation and makes
recommendations;

6.37.4. The Circle Office, after considering the
explanation and recommendations,
makes a decision and communicates the
same to the valuer.

6.38. The High Court found that, though an
explanation had been submitted, there was no
communication of the views or decision taken
by the competent authority as mandated by the
guidelines. The Petitioner was not informed of
the reasons for depanelment after submission
of the reply, nor were the deliberations of the
authority communicated.

6.39. The Court held that non-compliance with the
principles of natural justice amounted to
arbitrariness. Deleting the name of a person
from the panel or caution list without assigning

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reasons was held to be unfair and arbitrary.
Consequently, the writ petition was allowed,
the action of removing the petitioner firm from
the panel was declared violative of natural
justice, and the concerned respondent was
directed to remove the Petitioner’s name from
the TPE Caution List.

6.40. Placing reliance on the aforesaid judgment,
learned counsel submits that the factual matrix
of the present case is strikingly similar. Here
also:

6.40.1. A show cause notice was issued;

6.40.2. A detailed reply was submitted by the
Petitioner;

6.40.3. No further opportunity was afforded;

6.40.4. No decision or reasons were
communicated;

6.40.5. The Petitioner came to know of the
inclusion in the caution list only
subsequently.

6.41. It is submitted that, as in Sankaram , the mere
issuance of a show cause notice does not

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satisfy the requirements of natural justice.
There must be demonstrable consideration of
the explanation, application of mind by the
competent authority, and communication of a
reasoned decision before proceeding to depanel
or include in the caution list a professional,
resulting in adversely affecting his reputation
and livelihood.

6.42. Accordingly, learned counsel contends that the
impugned action in the present case, having
been taken without adherence to the procedural
safeguards and without communication of
reasons, is arbitrary, violative of principles of
natural justice, and liable to be set aside with
consequential direction to remove the
Petitioner’s name from the TPE Caution List.

6.43. He relies upon the decision of the Hon’ble High
Court of Judicature at Madras in the case of
N.R.Raghuram & Co., vs. Indian Banks’
4
Association and ors., more particularly,
Paras 6, 8, 13, 14, 15 & 16 which is/are
reproduced hereunder for easy reference:

4
WP No.17780/2017 & WP No.19291/2017 dated 30.1.2020

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6. As seen from the counter affidavit filed by
the second respondent, while processing a
housing loan for one of its customers, the
Petitioner had over valued the properties of the
customers and subsequently, reduced the
value from Rs.1,15,000/- per cent to
Rs.1,00,000/- per cent. It is also their case
that once again, it was noticed by them that
due to over valuation by the Petitioner, the
property of one other customer who had
availed housing loan at Coimbatore was over
valued. According to them, the property was
Rs. 17,00,000/- per cent by the Petitioner and
they found that enquiry, valued at on further
the property will fetch only Rs.10,00,000/- to
Rs.12,00,000/- per cent. According to them,
only in such circumstances, a complaint was
given to the first respondent for uploading the
Petitioner's name in the caution List of the first
respondent website.
8. to of the learned counsel for the According
Petitioner, the first respondent without any
prior notice has put the Petitioner's name in
the caution list of their website. According to
him, the Petitioner has not violated the rules
and regulations the bank while valuating the
properties of the customers of the second
respondent bank. Further, it is his case that
due to the hosting of the Petitioner's name in
the caution list in the first respondent website,
other banks have also stopped giving the
Petitioner any business for valuation work. It is
also his case that without any enquiry, the
third and fourth respondent banks have also
stopped giving business to the Petitioner for
valuation work and they have terminated the
Petitioner's services. According to the learned
counsel for the Petitioner, the action of the first

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respondent is arbitrary, unreasonable and
unconstitutional.
13. However, the first respondent based on
the complaint received from the second
respondent bank, with regard to the
irregularities committed by the Petitioner in the
valuation of the properties, the first respondent
has hosted the Petitioner's name in the caution
list in their website affecting his business
interest with other member banks of the first
respondent association. This will amount to
deprivation of fundamental rights of the
Petitioner, to carry banks are concerned, there
on his business as a valuer with other banks.
Insofar as other is no finding against the
professional misconduct, violated Petitioner
that he has indulged in unfair practices, guilty
of ethics and professional practice. Even as per
clause 1.4 of the handbook on policy standards
and procedures for real estate valuation by
banks and housing finance institutions in India,
the said requirement is mandatory. In the case
on hand, since there is no finding that the
Petitioner has committed any of the
aforementioned irregularities, with regard to
other banks, the hosting of the Petitioner's
name in the caution list of the first respondent
website is arbitrary, and unconstitutional.
14. Clause 1.4 and 1.5 of the handbook on
policy standards and procedures for real estate
valuation by banks and housing finance
institutions in India reads as follows:
"1.4 Removal
In extreme cases where the valuer has been
found to be indulging in unfair practices, guilty
of professional misconduct, violating the code

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of ethics and professional practice, he shall be
removed from the panel. The procedure to
institutions shall followed by the banks housing
finance comprise of the following steps:
-issue of show cause notice
- hearing
- appropriate action, including removal from
the panel for a period of five years, if charges
are found serious
1.5 Re-Empanelment
Valuers once removed from the panel of any
bank or housing finance institution could be re-
empanelled again after a specified period,
based on the recommendations of the bank
Conflict Resolution Committee. Names of
valuers removed shall be reported the Indian
Banks' Association which in turn shall place the
names on its caution list."
15. Further, even under the appointment letter
issued by the second respondent, there is no
reference that the Petitioner has been put on
notice about the handbook on policy standards
and procedures for real estate valuation by
banks and housing finance institutions in India
which the first respondent relies upon.
16. For the foregoing reasons, this Court
directs the first respondent to remove the
name of the Petitioner from the caution list in
their website within a period of one week from
the date of receipt of a copy of this Order.
However, it is made clear that insofar as the
second respondent bank is concerned, they are
at liberty to terminate the services of the
Petitioner in accordance with the appointment

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letter dated 10.09.2013 which permits them to
terminate without reason and without any prior
notice.


6.44. Reling upon the judgment of the Hon’ble High
Court of Judicature at Madras in Raghuram he
contendd that inclusion of a valuer’s name in
the IBA Caution List, without adherence to
prescribed safeguards and without a finding of
professional misconduct, is unconstitutional and
unsustainable.

6.45. In the said case, allegations were levelled
against the petitioner valuer that he had
overvalued certain properties while processing
housing loans. On the basis of complaints from
a member bank, the Indian Banks’ Association
hosted the Petitioner’s name in the caution list
on its website. The Petitioner contended that no
prior notice was issued before placing his name
in the caution list and that such hosting had the
effect of other member banks discontinuing
business with him. It was urged that the action
was arbitrary, unreasonable and violative of
constitutional guarantees.

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6.46. The Hon’ble Madras High Court, upon
examining the pleadings and materials,
observed that though allegations of
overvaluation had been made by one bank,
there was no finding that the Petitioner had
indulged in unfair practices, violated
professional ethics, or committed professional
misconduct vis-à-vis other banks. The Court
took note of Clause 1.4 of the “Handbook on
Policy, Standards and Procedures for Real
Estate Valuation by Banks and Housing Finance
Institutions in India,” which mandates that
removal from the panel in extreme cases must
follow a structured procedure comprising
issuance of a show-cause notice, hearing, and
appropriate action if charges are found serious.
Clause 1.5 further contemplates reporting to
the IBA for inclusion in the caution list only in
accordance with such procedure.

6.47. The Court found that there was no compliance
with the mandatory procedure under the
handbook. Further, there was no material to
show that the Petitioner had been put on notice
about the applicability of the handbook at the
time of appointment. In the absence of a

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finding of professional misconduct of the nature
contemplated under Clause 1.4, the hosting of
the Petitioner’s name in the caution list
affecting his business with other member banks
was held to be arbitrary and unconstitutional,
as it effectively deprived him of his right to
carry on his profession.

6.48. Consequently, the Hon’ble Madras High Court
directed the IBA to remove the Petitioner’s
name from the caution list within a stipulated
period. At the same time, it clarified that the
concerned bank retained the liberty to
terminate the Petitioner’s services in
accordance with the terms of the appointment
letter, thereby distinguishing between
contractual termination and stigmatic caution
listing with industry-wide consequences.

6.49. Placing reliance upon the aforesaid decision,
learned counsel submits that the ratio squarely
applies to the present case. Here also:

6.49.1. The inclusion in the TPE Caution List was
effected at the instance of a member
bank;

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6.49.2. The inclusion has adversely affected the
Petitioner’s professional engagements
with other banks;

6.49.3. There is no categorical finding of
professional misconduct of the nature
contemplated under the applicable
guidelines;

6.49.4. There is no demonstrated compliance
with a structured procedure comprising
notice, hearing, deliberation and
reasoned decision prior to reporting to
IBA.

6.50. It is submitted that, as held in Raghuram ,
caution listing without adherence to prescribed
safeguards and without a definitive finding of
serious professional misconduct amounts to
arbitrary deprivation of the Petitioner’s right to
carry on his profession. The impugned action,
therefore, is liable to be interfered with, while
preserving liberty to the concerned banks to
regulate empanelment in accordance with law
and contractual stipulations.

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6.51. He relies upon the decision of the Hon’ble High
Court of Judicature at Madras in the case of
P.Ravi Kumar vs. the Chief General
5
Manager and another , more particularly,
Paras 4, 5 and 6, which are reproduced
hereunder for easy reference:
4. The similar issue has already been dealt
with by this Court in the case of NR Rahuram &
Co., Vs. Indian Bank 's Association and ors., in
W.P.No.17780 of 2017 order dated
30.01.2020, which held as follows :-
“13. However, the first respondent
based on the complaint received from
the second respondent bank, with
regard to the irregularities committed by
the Petitioner in the valuation of the
properties, the first respondent has
hosted the Petitioner's name in the
caution list in their website affecting his
business interest with other member
banks of the first respondent
association. This will amount to
deprivation of fundamental rights of the
Petitioner, to carry on his business as a
valuer with other banks. Insofar as other
banks are concerned, there is no finding
against the Petitioner that he has
indulged in unfair practices, guilty of
professional misconduct, violated code
of ethics and professional practice. Even
as per clause 1.4 of the handbook on
policy standards and procedures for real
estate valuation by banks and housing

5
WP No.23290/2022 & WMP No.22242/2022 dated 25.6.2024

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finance institutions in India, the said
requirement is mandatory. In the case
on hand, since there is no finding that
the Petitioner has committed any of the
aforementioned irregularities, with
regard to other banks, the hosting of the
Petitioner's name in the caution list of
the first respondent website is arbitrary,
and unconstitutional.
14. Clause 1.4 and 1.5 of the handbook
on policy standards and procedures for
real estate valuation by banks and
housing finance institutions in India
reads as follows:
“1.4 Removal In extreme cases where
the valuer has been found to be
indulging in unfair practices, guilty of
professional misconduct, violating the
code of ethics and professional practice,
he shall be removed from the panel. The
procedure to be followed by the banks /
housing finance institutions shall
comprise of the following steps :
- issue of show cause notice
- hearing
- appropriate action, including removal
from the panel for a period of five years,
if charges are found serious 1.5 Re-
Empanelment Valuers once removed
from the panel of any bank or housing
finance institution could be re-
empanelled again after a specified
period, based on the recommendations
of the bank Conflict Resolution
Committee. Names of valuers removed

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shall be reported to the Indian Banks’
Association which in turn shall place the
names on its caution list.”
15. Further, even under the
appointment letter issued by the second
respondent, there is no reference that
the Petitioner has been put on notice
about the handbook on policy standards
and procedures for real estate valuation
by banks and housing finance
institutions in India which the first
respondent relies upon.
16. For the foregoing reasons, this Court
directs the first respondent to remove
the name of the Petitioner from the
caution list in their website within a
period of one week from the date of
receipt of a copy of this Order. However,
it is made clear that insofar as the
second respondent bank is concerned,
they are at liberty to terminate the
services of the Petitioner in accordance
with the appointment letter dated
10.09.2013 which permits them to
terminate without reason and without
any prior notice.”
5. In view of the above Order, this Court
directs the second respondent to remove the
name of the Petitioner from the caution list in
their website within a period of one week from
the date of receipt of a copy of this Order.
6. With the above directions, the Writ Petition
stands allowed. Consequently, connected
miscellaneous petition is closed. There shall be
no orders as to costs.

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6.52. Placing reliance upon the judgment of the
Hon’ble High Court of Judicature at Madras in
P. Ravi Kumar he submits that the inclusion of
a valuer’s name in the IBA Caution List, without
strict adherence to the prescribed procedure
and without a definitive finding of professional
misconduct, is legally unsustainable.

6.53. In the said case, the Hon’ble Madras High Court
was confronted with a situation similar to the
one in Raghuram . The Court expressly relied
upon its earlier decision in Raghuram , wherein
it had held that hosting the name of a valuer in
the caution list on the basis of a complaint by
one bank, without a finding of unfair practices,
professional misconduct, or violation of code of
ethics, would amount to deprivation of the
valuer’s fundamental right to carry on his
business.

6.54. The Court reiterated that Clause 1.4 of the
“Handbook on Policy Standards and Procedures
for Real Estate Valuation by Banks and Housing
Finance Institutions in India” mandates a
structured procedure before removal from the
panel, comprising:

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6.54.1. issuance of show cause notice,

6.54.2. hearing, and

6.54.3. appropriate action if charges are found
serious.

6.55. Clause 1.5 further contemplates reporting to
the Indian Banks’ Association only after such
removal in accordance with the prescribed
process.

6.56. In Ravi Kumar , the Court, following the earlier
precedent, directed the removal of the
Petitioner’s name from the caution list within a
stipulated period. At the same time, it clarified
that the concerned bank retained the liberty to
terminate the Petitioner’s services in
accordance with the appointment letter,
thereby drawing a clear distinction between
contractual termination and stigmatic caution
listing with industry-wide ramifications.

6.57. Placing reliance upon the aforesaid decision,
learned counsel submits that the principle is
now well-settled that:

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6.57.1. Inclusion in the IBA Caution List carries
serious civil and reputational
consequences;

6.57.2. Such inclusion cannot be justified merely
on the basis of allegations by a single
member bank;

6.57.3. There must be strict compliance with the
mandatory procedural safeguards
contemplated under the applicable
handbook/guidelines;

6.57.4. In the absence of a finding of serious
professional misconduct, hosting the
name of a valuer in the caution list is
arbitrary and unconstitutional.

6.58. It is therefore contended that the impugned
action in the present case, having been taken
without a demonstrable finding of professional
misconduct of the nature contemplated under
the governing norms and without adherence to
due procedure, is liable to be interfered with in
exercise of writ jurisdiction, with appropriate
directions for removal of the Petitioner’s name
from the TPE Caution List, while reserving

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liberty to the concerned banks to regulate
empanelment in accordance with law.

6.59. He relies upon the decision of the Hon’ble High
Court of Judicature at Madras in the case of
P.Subramani vs. The Assistant General
6
Manager and another, more particularly,
Paras 4 and 5, which are reproduced hereunder
for easy reference:
4. The similar issue has already been dealt
with by this Court in the case of NR Rahuram &
Co., Vs. Indian Bank 's Association and ors., in
W.P.No.17780 of 2017 order dated
30.01.2020, which held as follows :-
“13. However, the first respondent based on
the complaint received from the second
respondent bank, with regard to the
irregularities committed by the Petitioner in the
valuation of the properties, the first respondent
has hosted the Petitioner's name in the caution
list in their website affecting his business
interest with other member banks of the first
respondent association. This will amount to
deprivation of fundamental rights of the
Petitioner, to carry on his business as a valuer
with other banks. Insofar as other banks are
concerned, there is no finding against the
Petitioner that he has indulged in unfair
practices, guilty of professional misconduct,
violated code of ethics and professional
practice. Even as per clause 1.4 of the
handbook on policy standards and procedures

6
WP No.21044/2022 & WMP Mp/20063/2022 dated 25.6.2024

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for real estate valuation by banks and housing
finance institutions in India, the said
requirement is mandatory. In the case on
hand, since there is no finding that the
Petitioner has committed any of the
aforementioned irregularities, with regard to
other banks, the hosting of the Petitioner's
name in the caution list of the first respondent
website is arbitrary, and unconstitutional.
14. Clause 1.4 and 1.5 of the handbook on
policy standards and procedures for real estate
valuation by banks and housing finance
institutions in India reads as follows:
“1.4 Removal In extreme cases where the
valuer has been found to be indulging in unfair
practices, guilty of professional misconduct,
violating the code of ethics and professional
practice, he shall be removed from the panel.
The procedure to be followed by the banks /
housing finance institutions shall comprise of
the following steps :
- issue of show cause notice
- hearing
- appropriate action, including removal from
the panel for a period of five years, if charges
are found serious 1.5 Re-Empanelment Valuers
once removed from the panel of any bank or
housing finance institution could be re-
empanelled again after a specified period,
based on the recommendations of the bank
Conflict Resolution Committee. Names of
valuers removed shall be reported to the
Indian Banks’ Association which in turn shall
place the names on its caution list.”

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15. Further, even under the appointment letter
issued by the second respondent, there is no
reference that
https://www.mhc.tn.gov.in/judis the Petitioner
has been put on notice about the handbook on
policy standards and procedures for real estate
valuation by banks and housing finance
institutions in India which the first respondent
relies upon.
16. For the foregoing reasons, this Court
directs the first respondent to remove the
name of the Petitioner from the caution list in
their website within a period of one week from
the date of receipt of a copy of this Order.
However, it is made clear that insofar as the
second respondent bank is concerned, they are
at liberty to terminate the services of the
Petitioner in accordance with the appointment
letter dated 10.09.2013 which permits them to
terminate without reason and without any prior
notice.”
5. In view of the above Order, this Court
directs the second respondent to remove the
name of the Petitioner from the caution list in
their website within a period of one week from
the date of receipt of a copy of this Order.


6.60. He relies upon the decision of the Hon’ble High
Court of Judicature at Madras in the case of
S.Karthikeyan vs. Tamil Nadu Mercantile
7
Bank Ltd., and another , more particularly,

7
WP No.22980/2022 & WMP No.21988/2022 dated 20.9.2023

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Para 5 (14 to 19), which is/are reproduced
hereunder for easy reference:
5. In Vitec consultancy vs. Indian Banks'
Association and Others (W.P.No.14801 of
2022, dated 10.01.2023), a learned Single
Judge of this Court has passed the following
Order:
"14. In that particular Order which Writ Petition
was also filed, ISC seeking the same relief,
namely to remove the name of the Petitioner
therein from the Caution List, the learned
Single Judge had extracted the following from
the Hand Book:
"14. Clause 1.4 and 1.5 of the handbook on
policy standards and procedures for real estate
valuation by banks and housing finance
institutions in India reads as follows:
"1.4 Removal
In extreme cases where the valuer has been
found to be indulging in unfair practices. guilty
of professional misconduct, violating the code
of ethics and professional practice, he shall be
removed from the panel. The procedure to be
followed by the banks/housing finance
institutions shall comprise of the following
steps:
-issue of show cause notice
-hearing
-appropriate action, including removal from the
panel for a period of five years, if charges are
found serious.

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1.5 Re-Empanelment
Valuers once removed from the panel of any
bank or housing finance institution could be re-
empanelled again after a specified period.
based on the recommendations of the bank
Conflict Resolution Committee. Names of
valuers removed shall be to Indian Banks.
Association which in turn shall place the names
on its Caution List.
15. A careful reading of the above shows that a
Show Cause Notice has to be issued and a
hearing has to be conducted and thereafter,
appropriate action has to be done including
removal from the panel for a period of five
years if the charges are serious.
16. In the instant case, there was only one
stray occasion. where the Petitioner had
unfortunately come to the adverse notice of
the 2nd respondent on the charge of over-
valuing a particular site in the year 2014.
17. A further perusal of the Clauses extracted
above also shows that those who are removed
from the panel can again be re-empanelled.
18. Taking into consideration the fact that the
name of the BC petitioner had been uploaded
without any opportunity being given by the 1st
respondent directly, I would, also taking into
consideration the fact that the respondent had
taken a conscious decision not to appear
before this Court or be represented before this
Court, and balancing that factor with Petitioner
has come to the adverse knowledge of all the
banks the fact that by uploading the name of
the Petitioner, the which is an extreme step

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taken, interfere with the uploading of the name
of the Petitioner by the 1st respondent in their
website, and issue a direction that this should
be removed immediately.
19. All individual Banks are given freedom to
independently engage the Petitioner as a
valuer on the basis of the confidence they have
on the capabilities of the Petitioner herein. But
there cannot be a restraint of trade absolutely.

6.61. Learned counsel further relies upon the
judgment of the Hon’ble High Court of
Judicature at Madras in Subramani to contend
that the legal position concerning caution listing
of valuers now stands consistently settled.

6.62. In P. Subramani , the Hon’ble Madras High
Court was once again confronted with the issue
of inclusion of a valuer’s name in the caution
list maintained by the Indian Banks’
Association. The Court expressly relied upon its
earlier decision in N.R. Raghuram , reiterating
the principles laid down therein.

6.63. The Court reaffirmed that hosting the name of a
valuer in the caution list, based on a complaint
from a member bank, without a finding that the
valuer had indulged in unfair practices,
professional misconduct, or violation of the
code of ethics, amounts to deprivation of the

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valuer’s fundamental right to carry on his
profession. The Court referred to Clauses 1.4
and 1.5 of the Handbook on Policy Standards
and Procedures for Real Estate Valuation by
Banks and Housing Finance Institutions in
India, which mandate a structured procedure
prior to removal from the panel, namely,
issuance of a show cause notice, hearing, and
appropriate action if the charges are found
serious. Only thereafter can the name be
reported to the IBA for inclusion in the caution
list.

6.64. The Court also noted that the appointment
letter issued by the concerned bank did not put
the Petitioner on notice regarding the
applicability of the said handbook, and
therefore, reliance upon its provisions without
adherence to its safeguards could not be
sustained.

6.65. Following the earlier precedent, the Madras
High Court directed the removal of the
Petitioner’s name from the caution list within a
stipulated time, while clarifying that the
concerned bank was at liberty to terminate the

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services of the Petitioner in accordance with the
terms of appointment. Thus, a clear distinction
was maintained between contractual
termination on the one hand and stigmatic
industry-wide caution listing on the other.

6.66. Placing reliance on P. Subramani , learned
counsel submits that the principle emerging
from the Hon’ble Madras High Court decisions is
consistent and categorical: inclusion in the IBA
caution list, having serious reputational and
professional consequences, cannot be effected
without (i) strict compliance with the
mandatory procedural safeguards under the
governing handbook/guidelines, and (ii) a clear
finding of serious professional misconduct. In
the absence of such findings and procedural
adherence, caution listing is arbitrary,
unconstitutional and liable to be set aside.

6.67. It is therefore contended that the impugned
action in the present case suffers from identical
infirmities and warrants similar relief of removal
of the Petitioner’s name from the TPE Caution
List, while preserving liberty to the concerned

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banks to regulate empanelment in accordance
with law.

6.68. He relies upon the decision of the Hon’ble High
Court of Judicature at Madras in the case of
M/s.Vitec Consultancy vs. Indian Banks’
8
Association and ors., more particularly,
Paras 13 to 20, which are reproduced
hereunder for easy reference:
13. I had a benefit of an order passed by a
learned Single Judge of this Court in
W.P.No.17780/2017 [N.R.Raghuram and
Company vs. Indian Bank 's Association and
Others.
14. In that particular Order which Writ Petition
was also filed, seeking the same relief, namely
to remove the name of the Petitioner therein
from the Caution List, the learned Single Judge
had extracted the following from the Hand
Book:
“14. Clause 1.4 and 1.5 of the handbook on
policy standards and procedures for real estate
valuation by banks and housing finance
institutions in India reads as follows:
“1.4 Removal In extreme cases where the
valuer has been found to be indulging in unfair
practices, guilty of professional misconduct,
violating the code of ethics and professional
practice, he shall be removed from the panel.
The procedure to be followed by the

8
WP No.14801/2022 & WMP No.14003/2022 dated 10.1.2023

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banks/housing finance institutions shall
comprise of the following steps:
-issue of show cause notice
-hearing
-appropriate action, including removal from the
panel for a period of five years, if charges are
found serious.
1.5 Re-Empanelment Valuers once removed
from the panel of any bank or housing finance
institution could be re-empanelled again after a
specified period, based on the
recommendations of the bank Conflict
Resolution Committee. Names of valuers
removed shall be reported to the Indian Banks'
Association which in turn shall place the names
on its Caution List.”
15. A careful reading of the above shows that
a Show Cause Notice has to be issued and a
hearing has to be conducted and thereafter,
appropriate action has to be done including
removal from the panel for a period of five
years if the charges are serious.
16. In the instant case, there was only one
stray occasion, where the Petitioner had
unfortunately come to the adverse notice of
the 2 nd respondent on the charge of over-
valuing a particular site in the year 2014.
17. A further perusal of the Clauses extracted
above also shows that those who are removed
from the panel can again be re-empanelled.
https://www.mhc.tn.gov.in/judis
18. Taking into consideration the fact that the
name of the Petitioner had been uploaded

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without any opportunity being given by the 1st
respondent directly, I would, also taking into
consideration the fact that the 1st respondent
had taken a conscious decision not to appear
before this Court or be represented before this
Court, and balancing that factor with the fact
that by uploading the name of the Petitioner,
the Petitioner has come to the adverse
knowledge of all the banks which is an extreme
step taken, interfere with the uploading of the
name of the Petitioner by the 1st respondent in
their website, and issue a direction that this
should be removed immediately.
19. All individual Banks are given freedom to
independently engage the Petitioner as a
valuer on the basis of the confidence they have
on the capabilities of the Petitioner herein. But
there cannot be a restraint of trade absolutely.
20. I am therefore compelled to pass an order,
allowing the Writ Petition and directing that the
name of the Petitioner must be removed from
the website of the 1st respondent. Any Bank
and every Bank is given the freedom to engage
the Petitioner as a professional valuer subject.


6.69. Learned counsel placing reliance upon the
judgment of the Hon’ble High Court of
Judicature at Madras in Vitec Consultancy ,
contends that inclusion of a valuer’s name in
the IBA Caution List, without strict adherence
to the prescribed safeguards and without

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affording opportunity, amounts to an
impermissible restraint on trade.

6.70. In Vitec Consultancy , the learned Single
Judge considered an earlier decision in N.R.
Raghuram . extracted Clauses 1.4 and 1.5 of
the Handbook on Policy Standards and
Procedures for Real Estate Valuation by Banks
and Housing Finance Institutions in India. The
Court emphasised that removal from the panel,
in extreme cases of unfair practices or
professional misconduct, must be preceded by
a structured procedure

6.71. The Court observed that only after such
removal could the name be reported to the
Indian Banks’ Association for placement in the
Caution List. A careful reading of the handbook,
according to the Court, made it clear that these
safeguards were mandatory.

6.72. In the facts of that case, the alleged lapse
pertained to a single stray instance of
overvaluation. The Court noted that uploading
the Petitioner’s name on the IBA website,
without affording opportunity and without direct
compliance with the procedural safeguards, was

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an extreme step. It further held that uploading
the name resulted in the Petitioner coming to
the adverse knowledge of all banks, thereby
severely impacting his professional prospects.

6.73. Significantly, the Court held that while
individual banks are at liberty to decide
whether to engage a particular valuer based on
their confidence and internal assessment, there
cannot be an absolute restraint on trade by way
of centralised caution listing without due
process. The uploading of the name in the
caution list, in the absence of strict compliance
with the mandatory procedure and without
adequate opportunity, was therefore interfered
with. The Court directed the removal of the
Petitioner’s name from the IBA website, while
preserving the freedom of individual banks to
independently decide whether to engage him.

6.74. Placing reliance on Vitec Consultancy , learned
counsel submits that the ratio squarely
supports the Petitioner’s case. The inclusion of
the Petitioner’s name in the TPE Caution List
has the effect of circulating an adverse stigma
across all member banks, which is far more

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severe than mere termination by an individual
bank. Such a step, being drastic in nature,
must be preceded by strict compliance with
procedural safeguards and clear findings of
serious professional misconduct. In the absence
of such compliance and findings, the impugned
action amounts to an unreasonable and
disproportionate restraint on the Petitioner’s
right to carry on his profession and is liable to
be set aside, while leaving individual banks at
liberty to take decisions regarding
empanelment in accordance with law.

6.75. He also relies on the Handbook on Policy,
Standards and Procedures for Real Estate
Valuation by Banks and Housing Financial
Institutions in India published in February 2011
by respondent No.1 - Indian banks association.
His submission is that the requirement of this
handbook has been complied have not been
complied by respondents. In this regard. He
refers to Clause 1.4 thereof, which is
reproduced hereunder for easy reference:
1.4 Removal
In extreme cases where the valuer has been
found to be indulging in unfair practices, guilty

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of professional misconduct, violating the code
of ethics and professional practice, he shall be
removed from the panel. The procedure to be
followed by the banks/housing finance
institutions shall comprise of the following
steps:
•

Issue of show cause notice
•
Hearing
•
Appropriate action, including removal from the
panel for a period of five years, if charges are
found serious.


6.76. It is his submission that the requirements
prescribed therein are mandatory in character
and bind member banks while taking action
against empanelled valuers. According to him,
the respondents have not complied with the
safeguards contemplated under the said
Handbook.

6.77. Particular reference is made to Clause 1.4
thereof, which provides that removal of a
valuer from the panel can be resorted to only in
extreme cases where the valuer has been found
to be indulging in unfair practices, guilty of
professional misconduct, or violating the code
of ethics and professional practice. The clause

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further prescribes a structured procedure prior
to removal, namely:

6.77.1. issuance of show cause notice;

6.77.2. conduct of hearing;

6.77.3. appropriate action, including removal from
the panel for a period of five years, if the
charges are found serious.

6.78. By placing emphasis on Clause 1.4, learned
counsel submits that removal from the panel,
and consequential reporting to the caution list,
can be justified only upon:

6.78.1. A clear finding of unfair practices or
professional misconduct;

6.78.2. Compliance with the procedural
safeguards of notice and hearing;

6.78.3. A reasoned decision;

6.78.4. Restriction of removal to a maximum
period of five years where charges are
serious.

6.79. It is contended that in the present case:

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6.79.1. No finding has been recorded that the
Petitioner indulged in unfair practices or
violated professional ethics;

6.79.2. No hearing has been afforded;

6.79.3. No reasoned order has been
communicated;

6.79.4. The caution listing has effectively
operated for a period exceeding five
years, thereby violating the temporal
limitation contemplated under Clause
1.4.

6.80. Learned counsel further refers to the Master
Circular on Frauds – Classification and
Reporting dated 01.07.2013, issued by the
Reserve Bank of India, to contend that different
procedural frameworks are prescribed
depending upon the quantum and nature of
fraud. In the absence of any categorical
disclosure as to the extent or classification of
the alleged fraud, the Petitioner has been
deprived of the opportunity to understand the
procedural route adopted by the respondents
and to effectively defend himself.

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6.81. On these premises, it is submitted that the
entire process culminating in the inclusion of
the Petitioner’s name in the TPE Caution List
has been undertaken behind his back, without
disclosure of material, without affording
opportunity of hearing, without recording
findings of professional misconduct as
contemplated under the Handbook, and without
adherence to the structured procedural
safeguards. The action, therefore, is arbitrary,
violative of principles of natural justice,
contrary to the governing policy framework,
and liable to be set aside with grant of the
reliefs sought in the writ petition.

6.82. By referring to Clause 1.4, his submission is
that it is only in extreme cases where the
valuer has been found to be indulging in unfair
practices, guilty of professional misconduct,
violating the code of ethics and profile practice
that he would be removed from the panel and
before such removal, a show cause notice has
to be issued, hearing held and the removal is to
be restricted to a period of five years if the
charges are found serious. He therefore
submits that no hearing has been provided, and

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the removal having exceeded five years, is in
violation of Clause 1.4. By referring to the
Master Circular on fraud classification reporting
dated July 1, 2013, he submits that there are
different kinds of procedures that have been
prescribed for alleged frauds on the basis of the
quantum of the fraud. Unless it has been
categorically shown as to the extent of fraud,
the Petitioner is not in a position to
categorically state what is the procedure to be
followed by the respondents. On that basis, he
submits that the entire action on part of the
respondent has been carried out behind the
back of the Petitioner, violating the principles of
natural justice, violating the applicable
procedures, and as such, the reliefs, which
have been sought for in the writ petition, are
required to be granted.

7. Ms.Divya Purandhar, learned counsel appearing for
respondents No.1, 3 and 4, that is, the Indian Bank
Association, and the banks, submits that:

7.1. Respondent No.4 is a public sector bank and is
required to maintain a high degree of financial
discipline and institutional integrity. According

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to her, when irregularities are noticed in
valuation reports, the bank is duty-bound to
examine the matter carefully and take
appropriate corrective steps. She contends that
valuation reports form the basis for determining
the quantum of loan to be sanctioned. If a
property is overvalued, the bank may grant a
higher loan than what the actual value of the
security justifies. In the event of default, the
bank would then be exposed to loss. Since
public funds are involved, the bank cannot
afford to ignore negligence or inflated
valuation.

7.2. She next raises a preliminary objection
regarding delay and laches. It is her submission
that the show cause notice was issued in April
2018 and the decision to de-empanel and
report the Petitioner’s name was taken in
September 2018. The Petitioner has not been
engaged by the bank since 2018. However, the
present writ petition has been filed only in the
year 2024. According to her, this unexplained
delay of nearly six years disentitles the
Petitioner to discretionary relief under Article
226. She submits that the delay amounts to

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acquiescence. She also points out that the writ
petition has been filed after the amalgamation
of Andhra Bank with Union Bank of India and
contends that this itself shows a lack of bona
fides.

7.3. In response to the argument that the
Petitioner’s fundamental right under Article
19(1)(g) has been violated, she submits that
inclusion of the Petitioner’s name in the caution
list does not prevent him from practising as a
valuer altogether. It only means that certain
banks may choose not to engage him. He is
free to offer his services to other entities.
Therefore, according to her, there is no
complete prohibition of his profession.

7.4. She further submits that Respondent No.1 – the
Indian Banks’ Association – is not “State” within
the meaning of Article 12 of the Constitution. It
is not funded by the Government, does not
discharge statutory or regulatory functions, and
is merely a voluntary association of banks. It
does not exercise supervisory powers over
member banks. Hence, she contends that
Respondent No.1 is not amenable to writ

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jurisdiction. On this ground also, she submits
that no direction can be issued to it.

7.5. With regard to the factual process followed by
the bank, she submits that irregularities were
noticed in certain valuation reports furnished by
the Petitioner. These were considered by the
competent authority in consultation with the
Fraud Risk Management Department. An email
dated 06.04.2018 was issued listing out the
irregular and inflated valuation reports.
Thereafter, a formal show cause notice dated
10.04.2018 was issued from the Head Office of
Andhra Bank detailing the irregularities and
calling upon the Petitioner to explain why his
name should not be deleted from the approved
panel and reported to the Indian Banks’
Association.

7.6. She submits that the Petitioner did submit his
explanation. The explanation was not ignored.
Clarifications were sought from the concerned
branch, namely, Hagaribommanahalli Branch.
After receiving the branch’s views, a
consolidated statement was prepared and
forwarded to the Circle General Manager.

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Ultimately, on 20.09.2018, a recommendation
was made to de-empanel the Petitioner and to
report his name to the IBA. According to her, all
internal procedures were duly followed before
forwarding the name.

7.7. She emphasises that valuers are third-party
professionals engaged by the bank for specific
assignments. They are not employees. The
relationship is purely contractual. If the bank
loses confidence in a valuer on account of
negligence or inflated reporting, it is well within
its rights to discontinue his services and de-
empanel him. A writ court, she submits, cannot
compel a bank to continue engaging a
professional in whom it has lost confidence.
There can be no direction for the specific
performance of a contract of service.

7.8. As regards the inclusion of the Petitioner’s
name in the IBA caution list, she submits that a
show cause notice was admittedly issued and
replied to. Therefore, the requirement of
providing an opportunity was satisfied. After
the bank forwarded its recommendation, the
matter was considered by the appropriate

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forum under Respondent No.1. The bank has no
control over the final decision taken by that
forum.

7.9. Finally, she submits that the caution list is not a
blacklist. It is merely advisory in nature. It
serves as a warning to member banks. It is
open to any bank to still engage the Petitioner
if it so chooses. The caution list is not binding
on member banks and does not automatically
bar engagement. Therefore, according to her,
the consequences alleged by the Petitioner are
exaggerated.

7.10. She relies on the judgment of this Court in the
case of Thimmanna vs. Union Bank of
9
India , more particularly, paras 2 and 3
thereof, which are reproduced hereunder for
easy reference:
2. The vehement submission of the learned
counsel for Petitioner that the client could not
have been abruptly discontinued on the Panel
and without a prior notice, and therefore the
impugned Order is vulnerable for challenge, is bit
difficult to countenance since empanelment is a
matter of discretion of the bank concerned; the
exercise of such discretion involves a host of
factors including the fiduciary relationship of

9
WP No.22279/2021 dated 7.12.2021

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'client & counsel', in matters of this kind a Writ
Court cannot ordinarily interfere & undertake a
deeper examination.
3. The text of the impugned Order cannot be
construed as attaching stigma to the Petitioner as
a professional; the bank has exercised its
prerogative in empaneling the lawyers of its
choice and not empaneling the Petitioner; such
an exercise cannot be faulted, subject to all just
exceptions into which argued case of the
Petitioner does not fit.

7.11. By relying on Thimmanna , her submission is
that in the said case, this Court was considering
a challenge to discontinuation of a professional
from the bank’s panel. The Court observed that
empanelment is essentially a matter within the
discretion of the concerned bank. Such
discretion, it was held, is exercised on the basis
of several factors, including the element of trust
and a fiduciary relationship. The Court further
held that in matters of empanelment, a writ
court would ordinarily not interfere or
undertake a deeper examination, since the
bank is entitled to choose the professionals it
wishes to engage.

7.12. The Court also observed that the order
impugned therein did not attach any stigma to
the Petitioner as a professional. It was held that

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the bank had merely exercised its prerogative
in choosing not to empanel the Petitioner and
such an exercise, in the absence of special
circumstances, could not be faulted.

7.13. Relying on Thimmanna , learned counsel
submits that the present case stands on similar
footing. According to her, inclusion of the
Petitioner’s name in the caution list does not
amount to attaching stigma. It is merely an
administrative decision taken in the course of
regulating the panel of professionals engaged
by the bank. Just as in Thimmanna, where
discontinuation from the panel was held to be
within the bank’s discretion and not stigmatic,
she submits that the present inclusion in the
caution list cannot be treated as punitive or
unconstitutional.

7.14. On this basis, she contends that no enforceable
legal right of the Petitioner has been infringed
and no ground is made out for interference
under Article 226 of the Constitution.

7.15. She relies on the judgment of the Hon'ble High
Court of Bombay in the case of Kishor S.Bhat

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10
vs. Indian Banks’ Association , more
particularly, para 20 thereof, which is
reproduced hereunder for easy reference:
20. The burden of proof that the Association is an
instrumentality or agency of the “State” is on the
Petitioner. On the basis of the materials on
record viz. Rules of Indian Banks' Association, in
our opinion, it cannot be said that the tests which
are relevant for determining whether Respondent
Association is an instrumentality or the agency of
the State are satisfied. The Association is
admittedly an unregistered body. The Association
is a private body over which Government has no
deep and pervasive control. Having given due
consideration to the determinative tests laid
down by the Apex Court and in the light of the
settled legal position as well as the facts in the
present case, we are of the view that Respondent
Association is not a “State” within the meaning of
the Article 12 of the Constitution of India so as to
make it amenable to the writ jurisdiction of this
Court.

7.16. By relying on Kishor S. Bhat learned counsel
submits that in the said decision, the Hon’ble
Bombay High Court examined the status of the
Indian Banks’ Association and considered
whether it could be treated as “State” or an
instrumentality of the State within the meaning
of Article 12 of the Constitution of India. The
Court observed that the burden lies on the

10
2018 SCC Online Bom 2857

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Petitioner to establish that the Association
satisfies the determinative tests laid down by
the Supreme Court for identifying a body as an
instrumentality or agency of the State.

7.17. Upon examining the rules and functioning of
the Association, the Bombay High Court held
that:

7.17.1. The Association is an unregistered body.

7.17.2. It is essentially a private association.

7.17.3. There is no deep and pervasive control
of the Government over it.

7.17.4. The relevant constitutional tests were
not satisfied.

7.17.5. Accordingly, it was concluded that the
Indian Banks’ Association is not “State”
within the meaning of Article 12 and
therefore not amenable to writ
jurisdiction.

7.18. Relying on Kishor S. Bhat , learned counsel
submits that Respondent No.1, namely the
Indian Banks’ Association, cannot be treated as
a State or instrumentality of the State. Since it

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does not satisfy the tests laid down for inclusion
within Article 12, no writ would lie against it.
On this ground alone, she submits that the
prayer seeking a direction to Respondent No.1
to remove the Petitioner’s name from the
caution list is not maintainable.

7.19. Article 12 of the Constitution of India, is
reproduced hereunder for easy reference:
12. In this part, unless the context otherwise
requires, "the State" includes the Government
and Parliament of India and the Government and
the Legislature of each of the States and all local
or other authorities within the territory of India or
under the control of the Government of India.


7.20. She relies upon the Division Bench judgment of
the Hon'ble Madras High Court in the case of
Chairman and Managing Director, UCO
11
Bank vs. K.Marimuthu and ors., more
particularly Paras 13, 15 and 17, which are
reproduced hereunder for easy reference:
13. The empanelment of lawyers by the banks
cannot be on the pedestal of an employment for
holding a civil post. The lawyers empaneled by
the bank are not governed by the service rules of
the bank. The conditions of appointment of the

11
WA Nos.2199/2023 & connected matters dated 2.2.2024

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empaneled lawyers are not governed by any
statute, rules or regulations.
15. Each bank has its own procedure for
empanelment of the lawyers. The learned Single
Judge in the impugned judgment has referred to
the circulars issued by the respective nationalized
banks and public sector banks providing for the
process of empanelment. The procedure
prescribed in the said circulars contemplates the
criteria for empanelment; process of
empanelment; authority for empanelment;
preparation of revised list by the zones;
distribution/ allocation of works, other conditions
for empanelment; review of the performance;
parameters for reviewing the performance of the
panel advocate; de-paneling of advocate; and
review at head office level.
17. The relationship between the banks and the
empaneled lawyers is purely a professional
relationship and not that of a master and servant.
The lawyers empaneled by the banks, during
their performance of the duty, are not holding
any civil post. They are not government servants
and/or government employees. The
empanelment of lawyers is at the pleasure of the
bank. The sine qua non is that the lawyers
selected by the COPY bank should be duly
qualified, competent and worthy to represent it.
The determination of their engagement is also at
the pleasure of the bank. So also, the lawyer
engaged by the bank has a right to terminate his
services with the bank. It cannot be said that
their appointment is a tenure appointment.

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7.21. By relying on Marimuthu learned counsel
submits that in the said decision, the Hon’ble
Division Bench examined the nature of
empanelment of lawyers by banks and held that
such empanelment cannot be equated with
employment to a civil post. The Court observed
that empanelled lawyers are not governed by
the service rules of the bank, nor are their
conditions of appointment controlled by any
statutory provisions. Each bank follows its own
internal procedure for empanelment, including
criteria for selection, allocation of work,
performance review, and de-panelment.

7.22. The Hon’ble Division Bench further held that the
relationship between a bank and an empanelled
lawyer is purely professional in nature and not
that of master and servant. Empanelled lawyers
do not hold any civil post. They are neither
government servants nor government
employees. Their engagement is at the
pleasure of the bank. The Court emphasised
that the bank must have confidence in the
competence and integrity of the professionals it
engages, and the continuation or termination of
such engagement lies within its discretion.

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Likewise, the lawyer is also free to terminate
the engagement. It is not a tenure
appointment.

7.23. Relying on Marimuthu , learned counsel
submits that the same principle applies to
valuers engaged by banks. The relationship
between the Petitioner and the respondent
banks is purely professional and contractual.
The Petitioner does not hold a civil post, nor is
he a government employee. His empanelment
is at the pleasure of the bank. The bank, having
lost confidence in him on account of alleged
irregularities in valuation, is entitled to
discontinue his engagement.

7.24. She submits that the Petitioner cannot seek
protection as if he holds a statutory or tenure-
based appointment. No vested right exists to
continue on the panel. Therefore, no direction
can be issued compelling the bank to continue
or renew its engagement, and the writ petition,
to that extent, is not maintainable. In this case,
the submission is that the relationship between
the empanelled lawyers and the bank is a
purely professional relationship, and not that of

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a master and servant. An empanelled lawyer
would not be holding any civil post. They are
not government servants or government
employees. As such, they would be empanelled
at the pleasure of the bank. The engagement
could be terminated either by the bank or by
the lawyer. Such engagement is not a tenure
appointment for the Petitioner to seek any
protection thereof.

7.25. She relies on the judgment of the Hon'ble
Rajasthan High Court in the case of Bhanwar
Singh Rajpurohit vs. Dena Bank (Now
12
Bank of Baroda) , more particularly para 18
thereof, which is reproduced hereunder for easy
reference:
18. This Court further finds that the respondent-
Bank has not launched any proceeding either civil
or criminal or any other proceeding against the
present Petitioner in regard to the issue in
question. Moreover, the inclusion of the
Petitioner's name in the caution list maintained
by the IBA cannot be said to be a stigma upon
the present Petitioner, as the respondent -Bank
has every right to remain cautioned while
appointing a lawyer of its choice, like any other
ordinary client. Thus, such inclusion, in the
opinion of this Court, is a mere caveat for the
banks of the country to exercise their discretion

12
2021 SCC Online Raj 4490

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and remain cautious, while making appointment
of a panel lawyer to represent them in the
Courts. This Court is thus of the firm opinion that
the act of the respondent-. Bank cannot be said
to be arbitrary or contrary to law in any manner,
so as to warrant any interference by this Court.

7.26. By relying on Bhanwar Singh Rajpurohit , her
submission is that in the said case, the Hon’ble
Rajasthan High Court was dealing with a
challenge to the inclusion of a lawyer’s name in
the caution list maintained by the Indian Banks’
Association. The Court noted that no civil or
criminal proceedings had been initiated against
the Petitioner therein. It further held that
inclusion of the Petitioner’s name in the caution
list could not be treated as attaching stigma.
According to the Court, a bank, like any other
client, has the right to remain cautious while
appointing a professional of its choice. The
caution list was viewed as a caveat to banks
across the country to exercise their discretion
carefully while engaging panel lawyers.

7.27. The Hon’ble Rajasthan High Court therefore
held that such inclusion could not be termed
arbitrary or illegal so as to warrant interference
in writ jurisdiction.

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7.28. Relying upon Bhanwar Singh Rajpurohit ,
learned counsel submits that inclusion of the
Petitioner’s name in the IBA caution list does
not amount to imposition of stigma or penalty.
It is merely an advisory measure enabling
banks to exercise caution. It does not
automatically prohibit engagement. It only
alerts member banks. Therefore, according to
her, the action of the respondents cannot be
characterised as arbitrary, punitive, or
unconstitutional, and no ground is made out for
interference by this Court.

7.29. She relies upon the decision of the Hon’ble
Andhra Pradesh High Court in the case of RKL
13
Prasad vs. State Bank of India and others
more particularly Paras 11 and 13 thereof,
which are reproduced hereunder for easy
reference:
11. On a perusal of the material on record, it is
evident that before de-paneling the Petitioner, a
notice dated 29.11.2018 was issued duly setting
out the lapses on the part of the writ petitioner.
In reply to the same, the Petitioner submitted his
explanation on 22.12.2018 and thereafter a
decision was taken by the State Bank of India to
de-panel the Petitioner and in the said

13
2024 SCC Online AP 730

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circumstances, as rightly contended by the
learned counsel for the respondent-Bank there is
no violation of principles of natural justice. As to
whether such decision on the part of the State
Bank of India is arbitrary and the same warrants
interference cannot be gone into, in the absence
of any specific challenge to the proceedings dated
02.02.2019. Even otherwise, this Court can only
examine the decision making process, which
appears to have been followed scrupulously.
Therefore, even in the absence of challenge to
the said decision, this Court is satisfied that the
de-panelment of the Petitioner warrants no
interference.
13. From a reading of the above mentioned
guideline, irrespective of the statutory nature of
the same, in the considered opinion of this Court,
it gives discretion to the Bank to re-empanel a
valuer on very selective basis. Such a discretion
cannot be subject matter of judicial scrutiny.
Further, as per the guidelines for empanelment of
a valuer of State Bank of India, Stressed Assets
Resolution Group, Corporate Centre, Mumbai,
which came into effect on 01.10.2019, filed along
with the counter affidavit, the competent
authority may de-list/de-panel a valuer on
account of misconduct for the instances, which
inter alia includes ‘under/over valuation value of
assets’ [Guideline No. 5(a)(i)]. It also
contemplates certain conditions to be fulfilled for
the valuers for empanelment including that “the
valuer has not been removed/dismissed from
Valuation related service (previous employment)
earlier”. In the light of the above stated
guidelines, which are in vogue and for the
reasons/conclusions recorded supra, this Court is
of the considered opinion that the relief as sought
for by the Petitioner deserves no consideration.

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7.30. By relying on RKL Prasad , she submits that in
that case, the Hon’ble Andhra Pradesh High
Court examined a challenge to the de-
panelment of a valuer. The Court noted that
prior to de-panelment, a notice had been issued
setting out the alleged lapses. The petitioner
therein had submitted his explanation.
Thereafter, a decision was taken by the State
Bank of India to de-panel him. The Court held
that in such circumstances, there was no
violation of principles of natural justice, since
notice had been given and explanation
considered

7.31. The Court further observed that judicial review
under Article 226 is limited to examining the
decision-making process and not the merits of
the decision itself. In the absence of a specific
challenge to the decision of de-panelment, the
Court found no ground to interfere. It also held
that the applicable guidelines vested discretion
in the bank to re-empanel or de-panel valuers,
including in cases of under-valuation or over-
valuation of assets. Such discretion, the Court
held, cannot ordinarily be subjected to judicial

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scrutiny unless the process is shown to be
arbitrary or illegal.

7.32. Relying on the aforesaid decision, learned
counsel submits that in the present case also, a
show cause notice was issued, the Petitioner
submitted his explanation, and thereafter a
decision was taken by the competent authority.
According to her, once the procedural
requirement of issuing notice and considering
the explanation has been complied with, the
scope of interference by this Court is extremely
limited. This Court, she submits, is concerned
only with whether the decision-making process
was followed, and not whether the decision was
correct on merits.

7.33. She therefore contends that since the internal
process was followed and the decision was
taken by the competent authority in accordance
with the guidelines, the same is not amenable
to interference in writ jurisdiction.

7.34. Her submission is that the entire process has
been followed in a proper manner. The
Petitioner cannot claim any violation of its right.
The decision taken by the Bank to refer the

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matter to the IBA for inclusion in the name in
the caution list is proper and correct, and does
not require any interference. On the above
basis, she submits that the writ petition as filed
is required to be dismissed.

8. Heard Sri. Prabhu N. Savanur, learned counsel for
the Petitioner, Smt. Divya Purandhar, learned
counsel for respondents No.1, 3 and 4 perused
papers, the points that would arise for determination
are:
i. Whether the writ petition is liable to be
dismissed on the ground of delay, laches
or acquiescence, having regard to the fact
that the Petitioner’s name was allegedly
included in the TPE Caution List in the year
2019, whereas the present petition has
been instituted in the year 2024; and
whether such delay disentitles the
Petitioner to the discretionary relief under
Article 226 of the Constitution of India?
ii. Whether Respondent No.1 – Indian Banks’
Association, in maintaining and publishing
the TPE Caution List and acting upon
recommendations of member banks,
performs a public or quasi-public function
amenable to judicial review under Article
226 of the Constitution of India?
iii. Whether the process culminating in the
inclusion of the Petitioner’s name in the
TPE Caution List was undertaken in strict

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compliance with the applicable Procedural
Guidelines governing reporting of Third
Party Entities (TPEs), including the
constitution and functioning of the
“Forum” contemplated therein, the
investigative and evaluative steps
prescribed under Guideline No.6, and the
safeguards envisaged under Clause 1.4 of
the Handbook on Policy, Standards and
Procedures for Real Estate Valuation by
Banks and Housing Finance Institutions in
India (February 2011)?
iv. Whether the principles of natural justice
were complied with prior to inclusion of
the Petitioner’s name in the TPE Caution
List, in particular, whether (i) the
Petitioner’s reply to the show cause notice
was duly considered, (ii) opportunity of
hearing was afforded where warranted,
(iii) a reasoned decision was recorded by
the competent authority, and (iv) such
decision was communicated to the
Petitioner before reporting his name to
Respondent No.1?
v. Whether there exists a clear, categorical
and recorded finding that the Petitioner
indulged in unfair practices, professional
misconduct, violation of code of ethics, or
acted with malafide intention of the nature
contemplated under the governing
guidelines and handbook; and whether
mere negligence or gross negligence,
absent proof of malafide intention or fraud
attributable to the Petitioner, would justify
inclusion in the TPE Caution List?

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vi. Whether the alleged discrepancies or
irregularities attributed to the Petitioner
fall within the professional scope and
responsibilities of a civil engineer and
approved valuer, or whether they pertain
to matters such as scrutiny of title,
verification of documents and legal due
diligence, which lie within the exclusive
domain of the bank’s legal counsel?
vii. Whether inclusion of the Petitioner’s name
in the TPE Caution List, having industry-
wide reputational and professional
consequences, constitutes a stigmatic
action attracting civil consequences,
thereby necessitating strict adherence to
procedural safeguards and higher
standards of fairness?
viii. Whether such inclusion amounts to an
unreasonable, arbitrary or
disproportionate restriction on the
Petitioner’s right to practise his profession
under Article 19(1)(g) of the Constitution
of India, and if so, whether the same can
be justified as a reasonable restriction in
the interests contemplated under Article
19(6)?
ix. Whether the reporting and inclusion of the
Petitioner’s name in the TPE Caution List is
sustainable in the absence of disclosure of
the nature, classification and quantum of
the alleged fraud in terms of the applicable
RBI Master Circular on Frauds –
Classification and Reporting?
x. In the light of the findings on the above
issues, whether the Petitioner is entitled

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to a writ of mandamus directing removal
of his name from the TPE Caution List and
to consequential directions regarding
continuation or reconsideration of
empanelment by the respondent banks?
xi. What order?

9. I answer the above points as follows:

10. ANSWER TO POINT NO.1: Whether the writ
petition is liable to be dismissed on the ground
of delay, laches or acquiescence, having regard
to the fact that the Petitioner’s name was
allegedly included in the TPE Caution List in the
year 2019, whereas the present petition has
been instituted in the year 2024; and whether
such delay disentitles the Petitioner to the
discretionary relief under Article 226 of the
Constitution of India?

10.1. Sri. Prabhu N. Savanur, learned counsel for the
Petitioner, does not specifically address the
question of delay in any detailed manner.
However, it is implicit in his submissions that
the cause of action in the present case is a
continuing one. The Petitioner’s name continues
to remain in the TPE Caution List maintained by
respondent No.1. So long as the name
continues on the caution list, the Petitioner is
suffering from the adverse consequences
thereof, including denial of professional work
and damage to reputation. The inclusion in the

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caution list is not a one-time act that exhausts
itself; it is a continuing wrong that inflicts fresh
injury upon the Petitioner with each passing
day.

10.2. It is further the case of the Petitioner that he
came to know of the inclusion only when he
made inquiries as to why no work was being
allotted to him by respondents No.4 and 5.
There was no formal communication or order
conveyed to him regarding the inclusion of his
name in the caution list. In the absence of such
communication, the Petitioner cannot be
attributed with knowledge from the date of
actual inclusion.

10.3. The submission is that where fundamental
rights are violated by way of continuing action,
the doctrine of delay and laches cannot be
applied in its full rigour so as to deny relief to
the aggrieved party.

10.4. Smt. Divya Purandhar, learned counsel for
respondents No.1, 3 and 4, raises a preliminary
objection regarding delay and laches. It is her
submission that the show cause notice was
issued in April 2018, and the decision to de-

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empanel and report the Petitioner’s name was
taken in September 2018. The Petitioner has
not been engaged by the bank since 2018.
However, the present writ petition has been
filed only in the year 2024. According to her,
this unexplained delay of nearly six years
disentitles the Petitioner to discretionary relief
under Article 226 of the Constitution of India.

10.5. She submits that the delay amounts to
acquiescence. She also points out that the writ
petition has been filed after the amalgamation
of Andhra Bank with Union Bank of India and
contends that this itself demonstrates a lack of
bona fides on the part of the Petitioner.

10.6. At the outset, it is necessary to appreciate the
nature of the impugned action. The inclusion of
the Petitioner’s name in the TPE Caution List is
not a one-time act that exhausts itself on a
particular date. The caution list is a live,
continuously maintained and periodically
updated document published by respondent
No.1 on its website. So long as the Petitioner’s
name remains on this list, it continues to
operate as an adverse entry against him,

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signalling to all member banks across the
country that the Petitioner is an entity against
whom caution ought to be exercised. The
consequence is that banks, upon accessing the
caution list, either decline to empanel the
Petitioner or discontinue existing engagements.
This is precisely what has happened in the
present case, as the Petitioner has not received
any work from the respondent banks since his
inclusion.

10.7. In this context, this Court is of the considered
opinion that the inclusion of the Petitioner’s
name in the TPE Caution List constitutes a
continuing wrong. The injury inflicted upon the
Petitioner is not confined to the date of initial
inclusion but is renewed with each passing day
so long as the name remains on the list. The
cause of action, therefore, is a recurring one,
giving rise to a fresh cause of action each day
the name continues to appear.

10.8. It is well-settled that where the action
complained of is continuing in nature, the
doctrine of delay and laches cannot operate as
an absolute bar to relief under Article 226 of

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the Constitution of India. The jurisdiction under
Article 226 is discretionary, but such discretion
must be exercised judiciously. Where a
fundamental right is being infringed on a
continuing basis, mere passage of time cannot
be permitted to operate as a shield for the
perpetuation of an illegality.

10.9. Furthermore, the material on record discloses
that no formal order or communication was
sent to the Petitioner, intimating him of the
decision to include his name in the caution list.
The Petitioner contends that he came to know
of this fact only subsequently, when he made
inquiries regarding non-allotment of work. This
contention has not been specifically rebutted by
the respondents with any documentary proof of
communication. In the absence of proof that
the decision was communicated to the
Petitioner at or around the time it was taken, it
would be unjust to fix the starting point of
delay from the date of the decision, which was
itself taken behind the Petitioner’s back.

10.10. The contention of Smt. Divya Purandhar that
the writ petition has been filed after the

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amalgamation of Andhra Bank with Union Bank
of India, and that this shows a lack of bona
fides, does not commend itself to this Court.
The amalgamation of Andhra Bank with Union
Bank of India is a statutory event that does
not, in any manner, affect the Petitioner’s right
to challenge the illegality of his inclusion in the
caution list. If anything, the amalgamation
could have created confusion regarding the
identity of the authority against whom action
was to be taken, which may partly explain the
delay.

10.11. The judgment relied upon by Smt. Divya
Purandhar, namely, Thimmanna vs. Union
Bank of India , does not advance the
respondents’ case on this point. In
Thimmanna , this Court was dealing with a
challenge to discontinuation from a bank’s
panel, which is a distinct matter from inclusion
in an industry-wide caution list. The question of
delay was not the central issue in that case,
and the ratio thereof does not establish any
principle that would compel dismissal of the
present petition on the ground of delay alone.

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10.12. On the other hand, the decisions relied upon by
Sri. Prabhu N. Savanur, learned counsel for the
Petitioner, demonstrate that Courts across the
country, including this Court in Shri H.T.
Vasudev vs. State Bank of India & Ors. and
in Veershetty vs. The Chairman, IBS &
Ors. , have entertained and allowed writ
petitions challenging inclusion in the TPE
Caution List without dismissing them on the
ground of delay. In both those decisions, the
writ petitions were entertained on their merits
notwithstanding the passage of time between
the impugned action and the filing of the
petition.

10.13. In view of the foregoing, I answer point no. (i)
by holding that the writ petition is not liable to
be dismissed on the ground of delay, laches or
acquiescence. The inclusion of the Petitioner’s
name in the TPE Caution List constitutes a
continuing wrong. The cause of action is
recurring. No communication of the decision
was made to the Petitioner. The delay, such as
it is, does not disentitle the Petitioner from
seeking discretionary relief under Article 226 of
the Constitution of India.

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11. ANSWER TO POINT NO.2: Whether Respondent
No.1 – Indian Banks’ Association, in
maintaining and publishing the TPE Caution List
and acting upon recommendations of member
banks, performs a public or quasi-public
function amenable to judicial review under
Article 226 of the Constitution of India?

11.1. Sri. Prabhu N. Savanur, learned counsel for the
Petitioner, submits that though respondent
No.1 - Indian Banks’ Association may not
technically be ’State’ within the meaning of
Article 12 of the Constitution of India, it
performs functions that are deeply intertwined
with the public interest and the regulatory
framework governing the banking sector. The
TPE Caution List maintained and published by
respondent No.1 has a direct and tangible
impact on the livelihood and professional
reputation of third-party entities, including the
Petitioner. The caution list is utilised by all
member banks as a reference tool while
deciding on the empanelment and engagement
of professionals.

11.2. His submission is that the writ petition is
directed not merely against respondent No.1
but also against respondents No.2 to 5, which
are banks and are indisputably public sector

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undertakings and instrumentalities of the State
within the meaning of Article 12. The action of
these banks in reporting the Petitioner’s name
for inclusion in the caution list and in de-
empanelling him is therefore amenable to
challenge under Article 226.

11.3. In any event, under Article 226 of the
Constitution, writ jurisdiction can be exercised
against ’any person or authority’, which is a
wider expression than ’State’ under Article 12.
Where a private body or association discharges
a public function or a function that has public
consequences, it is amenable to judicial review
under Article 226.

11.4. Smt. Divya Purandhar, learned counsel for
respondents No.1, 3 and 4, submits that
respondent No.1 - Indian Banks’ Association is
not ’State’ within the meaning of Article 12 of
the Constitution. It is not funded by the
Government, does not discharge statutory or
regulatory functions, and is merely a voluntary
association of banks. It does not exercise
supervisory powers over member banks.
Hence, she contends that respondent No.1 is

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not amenable to writ jurisdiction. On this
ground also, she submits that no direction can
be issued to it.

11.5. In support, she relies upon the judgment of the
Hon’ble Bombay High Court in Kishor S. Bhat
vs. Indian Banks’ Association , wherein it
was held that the Indian Banks’ Association is
not a ’State’ within the meaning of Article 12.
The Court observed that the Association is an
unregistered body, a private body over which
the Government has no deep and pervasive
control, and that the determinative tests for
identifying an instrumentality of the State were
not satisfied.

11.6. Article 12 of the Constitution of India reads as
follows:
"12. Definition - In this part, unless the context
otherwise requires, "the State" includes the Government
and Parliament of India and the Government and the
Legislature of each of the States and all local or other
authorities within the territory of India or under the
control of the Government of India."

11.7. It is true that the Hon’ble Bombay High Court in
Kishor S. Bhat vs. Indian Banks’
Association held that the Indian Banks’
Association is not ’State’ within the meaning of

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Article 12 of the Constitution. This Court takes
note of the said finding. However, the question
before this Court is not merely whether the IBA
is ’State’ under Article 12, but whether it is
amenable to the writ jurisdiction of this Court
under Article 226 of the Constitution.

11.8. The scope of Article 226 is wider than that of
Article 12. Article 226 empowers the High Court
to issue writs to ’any person or authority’,
including ’any Government’, for the
enforcement of fundamental rights and ’for any
other purpose’. The expression ’any person or
authority’ in Article 226 is not confined to
’State’ as defined in Article 12. Where a private
body performs a public function or a function
intertwined with governmental or statutory
activity, and where the rights of persons are
affected thereby, the High Court can exercise
its writ jurisdiction.

11.9. In the present case, the TPE Caution List
maintained by respondent No.1 is not a purely
private or internal document. It is published on
the website of the Indian Banks’ Association
and is accessible to all member banks. It serves

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as a centralised repository of adverse
information regarding third-party entities, and
member banks across the country rely upon it
while deciding whether to empanel or continue
engagement with professionals. The inclusion of
a person’s name in the said list has the effect of
a virtual industry-wide bar, depriving the
affected person of professional opportunities
across the entire banking sector. The impact is
akin to a blacklist, notwithstanding the
respondents’ characterisation of it as merely
’advisory’.

11.10. Further, the very existence and functioning of
the caution list is intertwined with the
regulatory framework. The Procedural
Guidelines for Reporting Names of Third Parties
involved in Frauds to IBA were formulated
pursuant to directions and circulars issued by
respondent No.2 - Reserve Bank of India, which
is a statutory body. The reporting mechanism
under these guidelines is linked to the RBI’s
Fraud Reporting and Monitoring System (FrMS).
The caution list, therefore, is not a purely
private initiative but is a product of the

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regulatory ecosystem governing the banking
industry.

11.11. Additionally and more fundamentally, the
present writ petition is not directed solely
against respondent No.1. It is also directed
against respondents No.3 and 4, which are
nationalised banks, and respondent No.5, which
is a scheduled commercial bank. These banks
are indisputably instrumentalities of the State
within the meaning of Article 12, or at the very
least, are ’authorities’ amenable to writ
jurisdiction under Article 226. The impugned
action, namely the reporting of the Petitioner’s
name for inclusion in the caution list, was
initiated by these banks. The role of respondent
No.1 is to act upon the recommendation of its
member banks and maintain the caution list.
Since the reporting banks are amenable to writ
jurisdiction, and since the action taken by
respondent No.1 is a direct consequence of the
banks’ reporting, the entire chain of action is
amenable to judicial review.

11.12. In this regard, this Court takes note of the fact
that in the decisions relied upon by the

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Petitioner, including Shri H.T. Vasudev vs.
State Bank of India & Ors. , Veershetty vs.
The Chairman, IBS & Ors. , M/s. G.P.
Sankaram and Associates vs. Union Bank
of India and Ors. , N.R. Raghuram & Co. vs.
Indian Banks’ Association and Ors. , P. Ravi
Kumar vs. The Chief General Manager and
Another , P. Subramani vs. The Assistant
General Manager and Another , S.
Karthikeyan vs. Tamil Nadu Mercantile
Bank Ltd. and Another , and M/s. Vitec
Consultancy vs. Indian Banks’ Association
and Ors. , various High Courts including this
Court, the Hon’ble High Court of Telangana and
the Hon’ble High Court of Madras have
entertained writ petitions against the Indian
Banks’ Association seeking removal of names
from the TPE Caution List and have granted
relief. The writ jurisdiction was not declined on
the ground that the IBA is not amenable to
such jurisdiction.

11.13. Even in the decisions relied upon by the
respondents, such as RKL Prasad vs. State
Bank of India and Others , the Hon’ble
Andhra Pradesh High Court entertained the writ

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petition on merits and decided it, without
raising any jurisdictional bar regarding the
IBA’s amenability to writ jurisdiction. Similarly,
in Bhanwar Singh Rajpurohit vs. Dena
Bank (Now Bank of Baroda) , the Hon’ble
Rajasthan High Court examined the challenge
to caution listing on merits.

11.14. The judgment of the Hon’ble Bombay High
Court in Kishor S. Bhat dealt with the specific
question of whether the IBA is ’State’ under
Article 12. While this Court respects that
finding, the broader question in the present
case is whether the IBA, in maintaining and
publishing the caution list, which has far-
reaching consequences affecting the livelihood
and reputation of professionals, performs a
function that is amenable to judicial review
under Article 226. This Court is satisfied that it
does. The function performed by the IBA in
maintaining the TPE Caution List is a public
function with profound consequences for
affected individuals. The caution list operates
as a centralised mechanism that effectively
determines whether a professional can practice
in the banking sector. Such a function,

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regardless of the private character of the body
performing it, is amenable to judicial review.

11.15. For the foregoing reasons, I answer Point no.2
by holding that respondent No.1 - Indian
Banks’ Association, in maintaining and
publishing the TPE Caution List and acting upon
recommendations of member banks, performs
a public or quasi-public function that is
amenable to judicial review under Article 226 of
the Constitution of India. The writ petition is
maintainable against respondent No.1, and this
Court has jurisdiction to issue appropriate
writs, orders or directions.

12. ANSWER TO POINT NO.3: Whether the process
culminating in the inclusion of the Petitioner’s
name in the TPE Caution List was undertaken in
strict compliance with the applicable
Procedural Guidelines governing reporting of
Third Party Entities (TPEs), including the
constitution and functioning of the “Forum”
contemplated therein, the investigative and
evaluative steps prescribed under Guideline
No.6, and the safeguards envisaged under
Clause 1.4 of the Handbook on Policy,
Standards and Procedures for Real Estate
Valuation by Banks and Housing Finance
Institutions in India (February 2011)?

12.1. Sri. Prabhu N. Savanur, learned counsel for the
Petitioner, submits that respondents No.3 and 4

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have not followed the procedure prescribed by
the Indian Banks’ Association. He relies upon
Rule 5 of the Procedural Guidelines for
Reporting Names of Third Parties involved in
Frauds to IBA for inclusion in the caution list,
which mandates the constitution of an
independent and empowered Forum to evaluate
the role of a Third Party Entity in a fraud or loss
event.

12.2. According to Rule 5, the Forum is required to
consist of three to five members of sufficient
seniority from various control functions, none of
whom should have investigated the case. The
Forum is required to receive investigation
reports, seek an explanation in writing from the
TPE, provide an opportunity to the TPE to
present his case, discuss and evaluate the
responses, seek further clarifications, decide on
the involvement or otherwise of the TPE, and
only then recommend inclusion in the caution
list.

12.3. He further relies on Guideline No.6, which
prescribes a detailed step-by-step process for
evaluation and reporting. This includes

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preparation of product-wise standard
investigation procedures by the investigating
team, a detailed investigation report specifying
the extent of involvement, forwarding of the
report to the Forum within 10 days, review by
the Forum guided by principles of natural
justice, a considered view on whether to include
the TPE, issuance of a letter seeking
explanation if malafide intent is suspected,
consideration of the TPE’s response, a reasoned
decision, and communication of the outcome to
the TPE.

12.4. His submission is that the respondent banks
have not demonstrated compliance with any of
these steps. There is no evidence that a Forum
was constituted, that an investigation report
was prepared in the prescribed format, that the
Forum deliberated upon the matter, or that the
process prescribed under Guideline No.6 was
followed.

12.5. He further relies on Clause 1.4 of the Handbook
on Policy, Standards and Procedures for Real
Estate Valuation by Banks and Housing Finance
Institutions in India (February 2011), which

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provides that removal from the panel in
extreme cases must follow a structured
procedure comprising issuance of a show-cause
notice, hearing, and appropriate action. Clause
1.5 provides that the names of valuers
removed shall be reported to the Indian Banks’
Association, which in turn shall place the names
on its caution list. He submits that even the
mandatory pre-conditions of Clause 1.4 have
not been satisfied.

12.6. Smt. Divya Purandhar, learned counsel for
respondents No.1, 3 and 4, submits that the
internal process was duly followed. According to
her, irregularities were noticed in the
Petitioner’s valuation reports. These were
considered by the competent authority in
consultation with the Fraud Risk Management
Department. An email dated 06.04.2018 was
issued listing out the irregular and inflated
valuation reports. Thereafter, a formal show
cause notice dated 10.04.2018 was issued from
the Head Office of Andhra Bank detailing the
irregularities and calling upon the Petitioner to
explain. The Petitioner submitted his
explanation. Clarifications were sought from the

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Hagaribommanahalli Branch. A consolidated
statement was prepared and forwarded to the
Circle General Manager. Ultimately, on
20.09.2018, a recommendation was made to
de-empanel the Petitioner and report his name
to the IBA.

12.7. She further submits that the decision to refer
the matter to the IBA was taken in accordance
with the bank’s internal processes and that all
procedures were duly followed.

12.8. She relies upon RKL Prasad vs. State Bank
, wherein the Hon’ble
of India and Others
Andhra Pradesh High Court held that where a
notice was issued, explanation considered, and
a decision taken by the competent authority,
the decision-making process could not be
faulted.

12.9. The Procedural Guidelines for Reporting Names
of Third Parties involved in Frauds to IBA
prescribe a detailed and structured process.
Rule 5 mandates the constitution of an
independent and empowered Forum. The
composition, quorum, periodicity and functions
of this Forum are set out in detail. The text of

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Rule 5 is reproduced hereunder for easy
reference:
" 5. Forum to evaluate the role of a Third
Party Entity in a fraud/loss event – It is
proposed that an independent and empowered
forum be set up to evaluate the role of TPEs in
fraud cases. a. Composition of the Forum – The
Forum could consist of 3 to 5 members of
sufficient seniority from the various control
functions. One person among the above
members will play role of coordinator. This
could typically be the group which reports
frauds to RBI. The group which had used the
services of TPE shall also be part of the Forum
to decide on the particular case. While the Chief
Vigilance Officer of the bank could be a member
of the Forum, the Forum shall not have any of
the persons who investigated the case."

12.10. Guideline No.6 prescribes the process of
evaluation and reporting. The relevant
provisions are extracted hereunder:
"6. Process of evaluation of involvement of
TPE and reporting to IBA – a. Investigating
teams in the bank should prepare product-wise
standard investigation procedure, including a
detailed checklist of points to be covered in a
case. b. If during the investigation of a fraud, it
emerges that third parties are involved, the
investigation report should contain the details
of the third parties and the extent of

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involvement in the fraud (negligence or
malafide intention). ... f. The Forum will be
guided by the principles of natural justice and
act independently and impartially. g. The Forum
will take a considered view when isolated cases
of negligence/gross negligence on the part of
the TPE is reported as to the desirability of
recommending inclusion of the TPE in the
caution list. It may not be fair to caution list a
TPE for a reported instance of negligence when
malafide intentions are not involved. h. If the
Forum feels that the intentions of the TPE were
malafide, the Forum will ask the concerned
business/operations group to write to the TPE
concerned and seek explanation. ... l. If the
members of the Forum do not find the
explanation to be acceptable, they will
recommend sending of the name of the TPE to
IBA. m. Accordingly, the Forum will send the
name to IBA in the format specified by IBA.
This will also be conveyed to the TPE by the
concerned group in the form of a written
communication."

12.11. Clause 1.4 of the Handbook on Policy,
Standards and Procedures for Real Estate
Valuation by Banks and Housing Finance
Institutions in India (February 2011) provides:
" 1.4 Removal – In extreme cases where the
valuer has been found to be indulging in unfair
practices, guilty of professional misconduct,
violating the code of ethics and professional

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practice, he shall be removed from the panel.
The procedure to be followed by the
banks/housing finance institutions shall
comprise of the following steps: - issue of show
cause notice; - hearing; - appropriate action,
including removal from the panel for a period of
five years, if charges are found serious."

12.12. Having extracted the relevant provisions, this
Court proceeds to examine whether the process
adopted by the respondent banks was in
compliance therewith.

12.13. Firstly, as regards the constitution and
functioning of the Forum under Rule 5:
There is no material placed on record by the
respondents to demonstrate that a Forum as
contemplated under Rule 5 was ever
constituted to evaluate the Petitioner’s role in
the alleged irregularities. There is no evidence
of any resolution, minutes of meeting, or order
constituting such a Forum. There is no evidence
that the Forum comprised three to five
members of sufficient seniority from various
control functions, or that it met, deliberated,
and recorded its proceedings. The respondents
have not produced any such documentation.

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12.14. Smt. Divya Purandhar submits that the matter
was considered by the competent authority in
consultation with the Fraud Risk Management
Department. However, consultation with a
department is not the same as deliberation by
the Forum contemplated under Rule 5. The
Guidelines specifically require an independent
and empowered Forum with defined
composition, quorum and functions. A
departmental consultation or exchange of
emails cannot be a substitute for the structured
deliberation mandated by Rule 5.

12.15. Secondly, as regards the investigative and
evaluative steps under Guideline No.6: The
Guidelines require that the investigating team
prepare a product-wise standard investigation
procedure, that the investigation report contain
details of the extent of involvement of the TPE
(whether negligence or malafide intention), that
the report be forwarded to the Forum within 10
days, and that the Forum review the report and
act independently and impartially, guided by
principles of natural justice. There is no
evidence that any such investigation report was
prepared in the prescribed format, or that it

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categorically stated the nature and extent of
the Petitioner’s involvement, distinguishing
between negligence and malafide intention. The
show cause notice refers to ’irregularities’ and
’inflated valuation’, but does not make any
categorical finding of malafide intent.

12.16. Guideline No.6(g) specifically provides that the
Forum shall take a considered view when
isolated cases of negligence or gross negligence
are reported, and that ’It may not be fair to
caution list a TPE for a reported instance of
negligence when malafide intentions are not
involved. ’ This is a crucial safeguard, which
means that mere negligence, even if
established, does not justify inclusion in the
caution list. Only where a malafide intention is
found does the further process of seeking
explanation and ultimately reporting to IBA get
triggered. There is nothing on record to show
that the Forum (assuming it was constituted,
which itself is not demonstrated) applied its
mind to this distinction.

12.17. Thirdly, as regards the safeguards under
Clause 1.4 of the Handbook: Clause 1.4

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mandates three distinct steps before removal
from the panel: (a) issuance of a show cause
notice, (b) hearing, and (c) appropriate action.
While a show-cause notice was admittedly
issued on 10.04.2018, no hearing was
conducted. The Petitioner submitted a reply,
but the reply is not the same as a hearing. The
Handbook specifically uses the word ’hearing’,
which implies an opportunity to be heard, an
opportunity to present one’s case, and an
opportunity to respond to the material relied
upon. Mere submission of a written reply,
without any interaction, deliberation or hearing,
does not satisfy this requirement.

12.18. The Hon’ble High Court of Telangana in M/s.
G.P. Sankaram and Associates vs. Union
Bank of India and Ors. examined a strikingly
similar fact situation. In that case, the Court
referred to Circular No.139 dated 20.07.2018,
which prescribed detailed guidelines for
depanelment and reporting to IBA. The Court
found that though a show cause notice had
been issued and a reply submitted, the
subsequent mandatory procedural safeguards
had not been followed. The explanation was not

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considered in accordance with the prescribed
procedure, and the decision was not
communicated. The Court held that non-
compliance with the principles of natural justice
amounted to arbitrariness and directed removal
from the caution list. The principle emerging
from Sankaram squarely applies to the present
case.

12.19. Similarly, in N.R. Raghuram & Co. vs. Indian
Banks’ Association and Ors. , the Hon’ble
Madras High Court found that the hosting of the
Petitioner’s name in the caution list was
effected without compliance with the
mandatory procedure under Clause 1.4 of the
Handbook. The Court held that in the absence
of compliance with the prescribed procedure,
the caution listing was arbitrary and
unconstitutional. This principle was followed
and reiterated in P. Ravi Kumar vs. The Chief
General Manager and Another , P.
Subramani vs. The Assistant General
Manager and Another , and M/s. Vitec
Consultancy vs. Indian Banks’ Association
and Ors.

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12.20. The reliance placed by the respondents on RKL
Prasad vs. State Bank of India and Others
is distinguishable. In RKL Prasad , the Hon’ble
Andhra Pradesh High Court found that a notice
had been issued, explanation submitted and
considered, and a decision taken. The Court
was satisfied that the decision-making process
had been followed. In the present case,
however, the respondents have not
demonstrated compliance with the structured
multi-step process prescribed under the
Procedural Guidelines (Rules 5 and 6) and the
Handbook (Clause 1.4). The issuance of a show
cause notice alone, without the constitution of a
Forum, without a structured investigation
report, without a hearing, and without
communication of a reasoned decision, does not
amount to compliance with the prescribed
procedure.

12.21. For the foregoing reasons, I answer Point No.
(iii) by holding that the process culminating in
the inclusion of the Petitioner’s name in the TPE
Caution List was not undertaken in compliance
with the applicable Procedural Guidelines
governing reporting of Third Party Entities, the

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constitution and functioning of the Forum, the
investigative and evaluative steps prescribed
under Guideline No.6, or the safeguards
envisaged under Clause 1.4 of the Handbook.
The process was deficient at every material
stage.

13. ANSWER TO POINT NO.4: Whether the
principles of natural justice were complied with
prior to inclusion of the Petitioner’s name in the
TPE Caution List, in particular, whether (i) the
Petitioner’s reply to the show cause notice was
duly considered, (ii) opportunity of hearing was
afforded where warranted, (iii) a reasoned
decision was recorded by the competent
authority, and (iv) such decision was
communicated to the Petitioner before
reporting his name to Respondent No.1?

13.1. Sri. Prabhu N. Savanur, learned counsel for the
Petitioner, submits that the inclusion of the
Petitioner’s name in the caution list is violative
of principles of natural justice. According to
him, except for the issuance of a show cause
notice dated 10.04.2018, there is no other
correspondence that has been issued. The reply
submitted by the Petitioner has not been
considered. No hearing has been provided to
the Petitioner. No order has been passed
thereon and communicated to the Petitioner.

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The mandatory procedure prescribed under the
Procedural Guidelines for Reporting Names of
Third Parties to IBA for inclusion in the caution
list has not been followed.

13.2. In support, he relies upon Veershetty vs. The
Chairman, IBS & Ors. , wherein this Court
held that non-consideration of the Petitioner’s
reply and failure to provide reasonable
opportunity constituted sufficient ground to set
aside the impugned action. He also relies upon
M/s. G.P. Sankaram and Associates vs.
Union Bank of India and Ors. , wherein the
Hon’ble High Court of Telangana held that non-
compliance with natural justice amounted to
arbitrariness.

13.3. Smt. Divya Purandhar, learned counsel for
respondents No.1, 3 and 4, submits that a
show cause notice was admittedly issued and
replied to. Therefore, the requirement of
providing an opportunity was satisfied. She
submits that the Petitioner’s explanation was
not ignored. Clarifications were sought from the
Hagaribommanahalli Branch. After receiving the
branch’s views, a consolidated statement was

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prepared and forwarded to the Circle General
Manager. Ultimately, on 20.09.2018, a
recommendation was made to de-empanel the
Petitioner and report his name to the IBA. She
contends that the procedural requirement of
issuing notice and considering the explanation
has been complied with.

13.4. She relies on RKL Prasad vs. State Bank of
India and Others and on the judgment of the
Hon’ble Division Bench of the Madras High
Court in Chairman and Managing Director,
UCO Bank vs. K. Marimuthu and Ors.

13.5. The principles of natural justice are the bedrock
of fair procedure. They require, at a minimum,
that a person against whom adverse action is
proposed to be taken should be given notice of
the proposed action, an opportunity to be
heard, and a reasoned decision, which should
be communicated to the person affected.

13.6. In the present case, the following factual
position emerges from the material on record:

13.6.1. A show cause notice dated 10.04.2018
was issued from the Head Office of

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Andhra Bank to the Petitioner, calling
upon him to explain the alleged
irregularities in valuation reports.

13.6.2. The Petitioner sought certain information
and clarification by his reply dated
09.06.2018. No response was given to
this request.

13.6.3. The Petitioner submitted his detailed
reply on 23.07.2018.

13.6.4. There is no material to show that the
Petitioner’s reply was considered by the
competent authority in a structured
manner, or that the Petitioner was
informed of the views taken on his reply.

13.6.5. There is no material to show that a
hearing was conducted at any stage.

13.6.6. There is no material to show that a
reasoned order was passed by the
competent authority upon consideration
of the Petitioner’s reply.

13.6.7. The decision to de-empanel the
Petitioner and report his name to IBA

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was taken on 20.09.2018, but was not
communicated to the Petitioner.

13.6.8. The Petitioner came to know of the
inclusion only subsequently, when he
made inquiries about non-allotment of
work.

13.7. Whether the Petitioner’s reply to the show
cause notice was duly considered: Smt.
Divya Purandhar submits that the explanation
was not ignored, and that clarifications were
sought from the branch, a consolidated
statement prepared, and the matter forwarded
to the Circle General Manager. However,
’internal processing’ of the explanation within
the bank’s departmental hierarchy is not the
same as ’due consideration’ of the Petitioner’s
reply in a manner that satisfies natural justice.
Due consideration requires that the explanation
be examined on its merits, that each ground
raised by the Petitioner be addressed, and that
the decision-maker demonstrate application of
mind to the explanation. There is no evidence
that this was done. There is no order or note
sheet showing consideration of the Petitioner’s

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reply point by point. The principles laid down by
this Court in Veershetty vs. The Chairman,
IBS & Ors. are directly applicable. In that
case, this Court found that the replies
submitted by the Petitioner therein had not
been considered and that the banks had
proceeded to terminate and disempanel him in
violation of natural justice.

13.8. Whether opportunity of hearing was
afforded: It is undisputed that no hearing was
conducted. The Petitioner was not called for
any hearing. No oral opportunity was provided.
While the Procedural Guidelines note that
personal hearing was not found ’feasible’ by the
Working Group, they also specifically state that
’banks could take a case specific view in the
matter, depending on the gravity of the case.’
Clause 1.4 of the Handbook expressly
mandates a ’hearing’ as one of the three
mandatory steps. The word ’hearing’ in Clause
1.4 is not qualified or diluted. It stands as a
mandatory pre-condition. In the present case,
no hearing of any kind was afforded to the
Petitioner.

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13.9. Whether a reasoned decision was
recorded: There is no evidence that a
reasoned decision was recorded by the
competent authority. The respondents have not
produced any order sheet, note file or decision
document that records the reasons for de-
empanelling the Petitioner and reporting his
name to IBA. As held in M/s. G.P. Sankaram
and Associates vs. Union Bank of India and
Ors. , ’Deleting the name of the person from
the rolls or panel without assigning any reasons
is unfair and arbitrary.’

13.10. Whether the decision was communicated
to the Petitioner: It is the Petitioner’s specific
case that no decision was communicated to
him. He came to know of the inclusion only
when he made inquiries about non-allotment of
work. The respondents have not placed on
record any letter or communication addressed
to the Petitioner informing him of the decision.
Guideline No.6(m) specifically requires that the
decision shall ’also be conveyed to the TPE by
the concerned group in the form of a written
communication.’ This mandatory requirement
has admittedly not been complied with.

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13.11. The reliance placed by Smt. Divya Purandhar
on RKL Prasad vs. State Bank of India and
Others is distinguishable. In RKL Prasad , the
Hon’ble Andhra Pradesh High Court found that
a notice had been issued, an explanation
submitted, and thereafter a decision was taken.
The Court was satisfied that the decision-
making process had been ’followed
scrupulously’. In the present case, the process
has not been followed scrupulously. The reply
was not demonstrably considered, no hearing
was held, no reasoned order was passed, and
no communication was made.

13.12. Similarly, the reliance on Chairman and
Managing Director, UCO Bank vs. K.
Marimuthu and Ors. does not assist the
respondents. The Marimuthu decision deals
with the nature of the relationship between a
bank and an empanelled lawyer, holding it to
be a purely professional relationship. It does
not dilute the requirement of natural justice.
Even in a purely professional relationship,
where an adverse action carrying civil
consequences is taken, the minimum

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requirements of natural justice must be
satisfied.

13.13. For the foregoing reasons, I answer point No.
(iv) by holding that the principles of natural
justice were not complied with prior to the
inclusion of the Petitioner’s name in the TPE
Caution List. The Petitioner’s reply was not duly
considered; no hearing was afforded; no
reasoned decision was recorded; and no
communication was made to the Petitioner. The
action is vitiated by violation of natural justice
on all four counts.


14. ANSWER TO POINT NO.5: Whether there exists
a clear, categorical and recorded finding that
the Petitioner indulged in unfair practices,
professional misconduct, violation of code of
ethics, or acted with malafide intention of the
nature contemplated under the governing
guidelines and handbook; and whether mere
negligence or gross negligence, absent proof of
malafide intention or fraud attributable to the
Petitioner, would justify inclusion in the TPE
Caution List?


14.1. Sri. Prabhu N. Savanur, learned counsel for the
Petitioner, submits that for inclusion in the

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caution list, the governing guidelines require a
finding of malafide intention, fraud, or serious
professional misconduct. Mere negligence or
even gross negligence, absent proof of malafide
intention, does not justify inclusion. He relies
on Guideline No.6(g), which provides that ’It
may not be fair to caution list a TPE for a
reported instance of negligence when malafide
intentions are not involved.’ He submits that
there is no categorical finding of fraud, collusion
or malafide intent against the Petitioner.

14.2. He further relies on Clause 1.4 of the
Handbook, which permits removal from the
panel only in ’extreme cases where the valuer
has been found to be indulging in unfair
practices, guilty of professional misconduct,
violating the code of ethics and professional
practice.’ He submits that no such finding has
been recorded against the Petitioner.

14.3. Smt. Divya Purandhar, learned counsel for
respondents No.1, 3 and 4, submits that
irregularities were noticed in the Petitioner’s
valuation reports and that property was
overvalued. She contends that valuation reports

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form the basis for determining the quantum of
loan, and if a property is overvalued, the bank
is exposed to loss. She submits that the bank is
duty-bound to act when such irregularities are
noticed.

14.4. She relies on RKL Prasad vs. State Bank of
India and Others , where the Court noted that
guidelines for empanelment permit de-listing on
account of under/over valuation of assets.

14.5. The distinction between negligence and
malafide intention is central to the framework
governing inclusion in the TPE Caution List. The
Procedural Guidelines expressly recognise this
distinction and provide for differential
treatment.

14.6. Guideline No.6(g) provides: ’The Forum will
take a considered view when isolated cases of
negligence/gross negligence on the part of the
TPE is reported as to the desirability of
recommending inclusion of the TPE in the
caution list. It may not be fair to caution list a
TPE for a reported instance of negligence when
malafide intentions are not involved.’

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14.7. Guideline No.6(h) provides: ’If the Forum feels
that the intentions of the TPE were malafide,
the Forum will ask the concerned
business/operations group to write to the TPE
concerned and seek explanation for his/her
action.’

14.8. A conjoint reading of these provisions makes it
clear that the Guidelines draw a fundamental
distinction between (a) negligence or gross
negligence, and (b) malafide intention.
Inclusion in the caution list is warranted only
where malafide intention is involved. For
negligence, even if gross, the Guidelines
caution against inclusion. The threshold for
inclusion is not mere irregularity or even
negligence; it is malafide intention or fraud.

14.9. Clause 1.4 of the Handbook similarly requires
that the valuer must be ’found to be indulging
in unfair practices, guilty of professional
misconduct, violating the code of ethics and
professional practice.’ The use of the words
’found to be’ indicates that there must be a
positive finding, not a mere allegation. The
words ’indulging in unfair practices’ and