The main legal point established is that an advocate cannot be held negligent for the lapses in loan sanction process if the advocate has taken reasonable care and due diligence in discharging duties, and the responsibilities outlined in the guidelines were not observed by the bank's officials.

JUDGMENT:

Jitendra Jain, J.

1. Rule. Rule made returnable forthwith. Heard finally by consent of the parties.

2. By this petition under Article 226 and 227 of the Constitution of India, the Petitioner seeks appropriate writ directing the Respondent Nos.2- Indian Banks’ Association to remove his name from the “caution list”.

Narrative of the events:-

(i) The Petitioner is practicing Advocate. In the year 2012, the Petitioner was empanelled as Panel Advocate of State Bank of Hyderabad now merged with Respondent No.1 (State Bank of India). The Respondent No.1 entrusted work to the Petitioner for obtaining Search and Title Report of the properties on which loan was to be sanctioned.

(ii) On 14th October 2014, 11th November 2014 and 9th December 2014, 3 Search and Title Reports with respect to 3 different properties were given by the Petitioner to the Respondent No.1. The Respondent No.1, thereafter, sanctioned loan on these properties of which the search report was given by the Petitioner. Subsequently, a fraud came to be unearthed with regard to the loan sanctioned by the Respondent No.1 against the security of these properties.

(iii) In view of above, on 26th June 2015 and 30th June 2016, the Respondent No.1 issued a show cause notice to the Petitioner directing the Petitioner to give his comments on the lapses in furnishing the Title and Search Report without due care and caution. The Petitioner vide letters dated 7th July 2015 and 11th July 2016 replied to the said show cause and denied the allegations alleged in the said show cause notice.

(iv) On 1st August 2018, the Respondent No.2 replying to the Petitioner’s Advocate stated that the Petitioner’s name has been placed on the “Caution List” in accordance with the guidelines dated 27th August 2009 issued by the Respondent No.2. The Respondent No.2 further advised the Petitioner to approach the Respondent No.1 for removing his name from the “Caution list”.

3. The reasons given for placing the Petitioner’s name on the “Caution List” are as under:-

“(a) The advocate had failed to obtain certified copies of link documents and compare them, with the documents submitted by the borrower. Subsequently, the title deeds turned out to the fake.

(b) He admitted that he examined the photo copies only as against the extant guidelines to examine original documents.

(c) He failed to properly compare the documents provided to him with the records of Sub-Registrar’s office.

(d) The advocate’s gross negligence in verification of documents resulted to preparation of a fraud of Rs.4.69 Crores in respect of 6 Housing/Mortgage loans at SBH’s Sinhgad Road Branch, Pune and resulted in huge loss to State Bank of Hyderabad.”

4. It is on this backdrop, the Petitioner has approached this Court seeking direction to the Respondent Nos.1 and 2 to remove his name from the “Caution List”.

Submission of the Petitioner:-

5. The Petitioner submitted that he has discharged his duties in submitting the Title and Search Report with due care and after examining the documents submitted by the Respondent No.1. The Petitioner submitted that the allegation of negligence in submitting these reports are incorrect. The Petitioner has also taken us through the report and submitted that he has taken due care and pre-caution in discharging his professional duties. The Petitioner submitted that since 2012, he has been engaged by Respondent No.1 and on various occasions given a negative report in favour of Bank to protect the interest of the Bank. The Petitioner further submitted that he has been placed on “Caution List” since 2016 and has already suffered on account of professional work for last 8 years. The Petitioner further relied upon the decision of the Nagpur Bench of this Court in the case of Rajan Shrivallabha Deshpande Vs. Bank of Baroda & Anr., Writ Petition No.3616 of 2021 and the decision of this Court in the case of Mohana Raj Nair Vs. CBI, 2013 SCC Online Bom 1279. The Petitioner, therefore, prayed that his name be removed fro