Sri Uday Narayan Ghosh vs State Bank Of India And Others
2023 Latest Caselaw 1410 Cal

                           In the High Court at Calcutta
                          Constitutional Writ Jurisdiction
                                   Appellate Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                             W.P.A. No.26580 of 2008

                              Sri Uday Narayan Ghosh
                                         Vs.
                           State Bank of India and others

     For the petitioner                  :   Mr. Saibal Acharjee,
                                             Mr. Ambu Bindu Chakraborty,
                                             Ms. Mrinmoyee Roy Chowdhury

     For the respondents             :       Mr. Sudip Pal Choudhuri,

Ms. Diya Nandi

Hearing concluded on : 16.02.2023

Judgment on : 24.02.2023

Sabyasachi Bhattacharyya, J:-

1. This writ petition has been filed by a legal professional who was, inter alia,

on the panel of the State Bank of Bikaner and Jaipur, which merged with

the State Bank of India (SBI) on April 1, 2017. Before the said merger, the

petitioner had all along acted as an empanelled lawyer without any

complaint having arisen against the petitioner from any quarter.

2. For the first time in the year 2018, the petitioner learnt of a letter dated

January 2, 2014 issued by the then State Bank of Bikaner and Jaipur to

the Indian Bankers' Association (IBA) with an advice to place the

petitioner's name in the IBA Caution List of Third Party Entities involved in

frauds. Upon the petitioner making query, the Deputy Chief Executive, IBA

informed on November 15, 2018 that such listing was done on the report of

the State Bank of Bikaner and Jaipur and had been circulated to all

members of the IBA vide communication dated January 16, 2014. The

petitioner was informed by the IBA that the SBI (respondent no.1) was to be

approached for removal of his name from the list. Although the petitioner

made several correspondences, the petitioner was not informed about the

reason of the caution listing. The Assistant General Manager of the SBI

asked the petitioner by a Letter dated February 26, 2020 to disclose the

reason for his name being included in the list and other relevant details.

3. Ultimately, the petitioner was informed that in view of three Title

Investigation Reports (TIRs) issued by the petitioner, the bank was

examining the petitioner's contention and would revert back in due course,

which the bank did not do.

4. The petitioner served a Demand Notice dated November 17, 2020

requesting removal of his name from the caution list.

5. Challenging such inclusion, the petitioner moved a writ petition bearing

WPA 11563 of 2020 which was allowed on February 19, 2021, setting aside

the Caution List dated January 2, 2014 and the circulation of the same

dated January 16, 2014 insofar as those related to the petitioner.

6. The IBA was directed to duly circulate the said order and the removal of the

petitioner's name from the said list among its members within 30 days.

Costs were also awarded in favour of the petitioner.

7. Prior to the filing of WPA 11563 of 2020, however, the petitioner had moved

the present writ petition bearing WPA 26580 of 2008, challenging an

enquiry report submitted by the respondent no.3, that is, the Assistant

General Manager, Law of the SBI and the order dated July 21, 2005 passed

by the Chief General Manager, SBI.

8. The context of the challenge was an order dated July 14, 2005 passed by

the Kolkata Debts Recovery Tribunal to in OA/128/2008 (SBI Vs. Bijoy

Kumar Agarwala and others) wherein it was recorded that the Branch

Manager of the SBI, Local Head Office, was appointed as Special Officer to

inspect securities as detailed in the case by order dated January 20, 2005

that the Special Officer had not given any report so far and it appeared that

the bank was not interested for suitable orders on the interim reliefs. It

was further observed by the Presiding Officer of the DRT that it was sheer

negligence and not proper prosecution of the case and it appeared that the

Branch Manager was helping the defendants to create grounds that the

securities be removed.

9. It was further directed that a copy of the order be sent to the CGM of the

Bank that he should report why the Tribunal's order was not implemented

and also the then present position of the securities not brought to the

notice of the Tribunal, for effective orders.

10. On the right hand margin of a copy of the said order, headed "Office Action

with date and dated signature of the parties when necessary", it was

endorsed that the AGM (Law) was to immediately refer with details. The

said endorsement was dated July 14, 2005.

11. The next endorsement of the AGM (Law) recorded "change the Advocate".

"Blacklist him how many other cases are with him". The same carried a

seal of the SBI and was dated July 18, 2005 and was received on July 21,

2005.

12. A note by the respondent no.3, the AGM (Law) at the bottom of the copy of

the order recorded that the matter relates to the Alam Bazar Branch of the

Bank and that the Branch Manager had informed that the Advocate (the

present petitioner) did not inform about the order of DRT whereby he was

appointed as Special Officer. The Branch Manager, it further went, was

informed about the order on June 15, 2005 and he inspected the spot and

produced the inspection report on June 15, 2005 and that the report had

been handed over to the Advocate for filing on July 22, 2005.

13. It was also evident from such endorsements that the petitioner had been

blacklisted by the Bank.

14. The petitioner places reliance on printouts of the call records of the

concerned mobile phone service provider and the copy of a letter dated

January 28, 2005, both annexed to the writ petition, to indicate that the

order-in-question had been duly communicated by the petitioner to the

Branch Manager, Alam Bazar Branch on January 22, 2005 (over the

phone) and January 28, 2005 (by a written letter) respectively.

15. The Branch Manager informed the Presiding Officer of the DRT that he

could not visit earlier due to his pre-occupation. A copy of the said undated

letter has also been annexed to the writ petition.

16. Hence, the impugned order of blacklisting the petitioner only on the ground

of non-communication of the order of the Tribunal dated June 15, 2005

was incorrect and done behind the back of the petitioner, thereby

contravening the basic tenet of natural justice, Audi Alterem Partem. It is

submitted that the blacklisting operates as humiliation of the petitioner

and derogatory for his fame and prestige in the professional career and was

done with the intention to deprive the petitioner of a huge amount of arrear

bills in view of his professional fees and other expenses for service rendered

to the Bank. It is contended that the AGM (Law) victimized the petitioner to

save his own skin.

17. It is further submitted that the petitioner was, even subsequent to the

impugned blacklisting, engaged by the Shyambazar Branch of the SBI to

render professional service in regard to verification of numbers of title

deeds, a document regarding which has also been annexed to the writ

petition.

18. It is submitted that the allegation regarding alleged misappropriation of

funds by the petitioner and non-deposit of court-fees are being contended

by the Bank for the first time in the writ petition and were never grounds

for the impugned blacklisting.

19. It is further submitted that the Bank lodged a complaint with the Bar

Council of West Bengal bearing Case No.26 of 2006. Vide Order No.6 dated

January 19, 2009, the petitioner was discharged by the Disciplinary

Committee of the Bar Council. The Committee also recorded that the

petitioner had returned a sum of Rs.1,50,000/- out of Rs.3,00,000/- on

being demanded by the Bank which was admitted by the learned advocate

for the Bank before the Disciplinary Committee and the balance amount

was spent for purchasing court stamp papers.

20. The petitioner also lodged a complaint against the Bank before the District

Consumer Redressal Forum, Kolkata Unit-II, bearing CC No.19 of 2011,

which was allowed on contest by order dated October 30, 2013. The Bank

was directed to pay costs of Rs.2,000/- and compensation of Rs.5,000/- to

the petitioner. A further sum of Rs.5,000/- was imposed against the Bank

for adopting unfair trade practice.

21. The petitioner also relies on the Judgment and order dated February 19,

2021 passed in WPA 11563 of 2020 to vindicate his stand.

22. Learned counsel for the Bank denies the allegations made by the petitioner.

In the written notes of arguments, the Bank has disclosed that the

petitioner had filed a Money Suit bearing Money Suit No.88 of 2009 before

the Civil Judge (Senior Division), First Court at Barasat claiming damages

and other reliefs, which had been dismissed.

23. The bank also enumerates certain alleged instances of non-deposit of

court-fees by the petitioner even after receiving the same in Clause f of

Paragraph 4 of its written notes of arguments, by placing reliance on

certain paragraphs of the affidavits-in-opposition and reply filed in

connection with the present writ petition.

24. Some suits, it is alleged, were dismissed for default due to non-payment of

court-fees, for which the petitioner allegedly admitted responsibility by

undertaking to proceed with the restoration of such cases without raising

any bill till they were restored, vide letter dated February 6, 2006.

25. As regards the letters dated December 24, 2005 and January 9, 2006,

annexed to the writ petition, the Bank denies the service of those.

26. Apart from denying all the allegations made by the petitioner, learned

counsel for the Bank submits that the cause of action for recovery of money

sought by the petitioner is time-barred.

27. Learned counsel for the Bank submits that empanelment with the Bank

does not create any vested right in favour of the petitioner. The subject-

matter of the writ petition is in no way connected with discharge of public

function and is beyond the scope of regular banking business.

Empanelment is a mere private arrangement and the question of violation

of natural justice does not arise.

28. The Bank, as a client, it is argued, is entitled to change its lawyer and, as

such, the petitioner cannot claim any vested right of empanelment.

29. It is argued that there was no communication on the part of the Bank, so

no stigma attaches to the petitioner by the blacklisting. An inter-office,

administrative, discretionary decision cannot be the subject matter of the

constitutional writ jurisdiction.

30. Learned counsel for the Bank places reliance on an unreported Judgment

of a learned Single Judge of the Karnataka High Court dated December 7,

2021 passed in WP No.22279 of 2021 (GM-RES) for the proposition that the

discontinuance of an advocate from the panel cannot be construed as

attaching stigma as a professional and the bank can exercise its

prerogative in empanelling the lawyers of its choice.

31. By placing reliance on a co-ordinate judgment of this Court dated May 6,

2013 passed in WP No.4491(W) of 2013, it is argued that empanelment

does not create any vested right to be appointed.

32. Upon hearing learned counsel for the parties, it transpires that, in similar

circumstances, WPA No.11563 of 2020 was disposed of on February 19,

2021 in favour of the petitioner, directing removal of his name from the

Caution List. The bank does not argue that any successful challenge was

preferred against such order.

33. On virtually the same set of facts, it was observed, inter alia, that the report

leading to the inclusion of the petitioner on the Caution List might have

been a backlash against the petitioner which found support from the

materials on record. Even the Consumer Forum passed an award of

compensation in favour of the petitioner of the ground of unfair trade

practice of the respondent no.1-Bank. The Bar Council had also dropped

the complaint lodged by the Bank upon due enquiry. On a preponderance

of probabilities, it was observed that the bank officials, having failed in

several forums, might have resorted to oblique means to harass the

petitioner and to justify their failure.

34. In the present case, we find that vide letter dated January 28, 2005, which

was duly received by the Branch Manager of the State Bank of India (with a

seal of the Branch Manager, Alam Bazar Branch, SBI affixed to indicate

receipt), the petitioner had informed the said Manager about the Tribunal's

order dated January 20, 2005 appointing the Branch Manager as a Special

Officer to inspect the factory and to report about the condition of

hypothecated/charged machinery etc. along with a copy of the said order

enclosed therewith.

35. Although Annexure P-3 of the writ petition is undated, the same carries the

stamp and seal of the SBI, Branch Manager, Alam Bazar Branch and his

signature and was addressed to the Presiding Officer, Kolkata DRT-II where

the Manager, inter alia, expressed that he had been appointed as Special

Officer but could not visit earlier due to pre-occupation and visited the

factory of the defendant in OA 128 of 2004 only on June 18, 2005 along

with the petitioner, who was the bank's lawyer.

36. The order dated July 14, 2005 was passed by the Presiding Officer of the

DRT on the premise that the Special Officer had not given report so far and

it appeared that the bank was not interested for suitable order on interim

reliefs. The sheer negligence and improper prosecution of the case on the

part of the Bank and the apprehension that the Branch Manager was

helping the defendants also found place in the order, the justification and

backdrop of which can very well be deciphered from the documents as

discussed above.

37. Surprisingly, without any hearing having been given or notice having been

given to the petitioner, the bank blacklisted the petitioner and the same

was endorsed on a copy of the order which also led to the petitioner's name

ultimately finding place in a Caution List circulated by the IBA, being the

subject-matter of challenge in WPA 11563 of 2020, which was ultimately

allowed, thereby quashing the said enlistment and circulation thereof. As

such, it cannot be said that the fallout of the black listing was merely

confined to the offices of the SBI itself. The same traversed across the

boundaries of the Bank and found place in the circulation of the IBA, of

which the SBI is the lead bank. The circulation following the same

debarred the petitioner, for all practical purposes, from being empanelled

afresh before any other bank which was the part of the IBA, let alone the

SBI.

38. Hence, the flimsy argument of the Bank that due to non-communication of

the blacklisting to the petitioner, there was no occasion of stigma, falls flat.

39. The endorsement at the bottom of the order copy of the DRT made by

respondent no.3, the AGM (Law) of the Bank dated July 21, 2005 blatantly

stated that the petitioner did not inform about the order the DRT, which

was communicated by none other than the Branch Manager who had been

castigated in the order of the DRT.

40. Such communication by the Manager was the only disclosed basis of

blacklisting the said Advocate. However, in view of the production of a copy

of the letter dated January 28, 2005 issued by the petitioner and received

by the Branch Manager, Alam Bazar Branch of the SBI (Annexure P-1 at

page 46 of the writ petition) clearly belies such allegation against the

petitioner and takes away the only premise of the impugned blacklisting.

41. It is well-settled in Mohinder Singh Gill's Case (AIR 1978 SC 851) onwards

that subsequent allegations made in affidavits as afterthought cannot

justify a previous illegal order passed by the authorities. In the present

instance, the Bank did not disclose any allegation of alleged

misappropriation of funds against the petitioner at any point of time as a

ground of the blacklisting.

42. Since blacklisting, in view of its inevitable consequences, definitely operates

as a stigma against the concerned person, particularly when good-will is

the most important asset of a legal professional, the non-service of prior

notice and absence of opportunity of hearing to the petitioner before

blacklisting was patently violative of Audi Alterem Partem, an integral tenet

of natural justice.

43. The subsequent allegations of misappropriation of funds have been

satisfactorily sought to be answered by the petitioner in his pleadings in

connection with the present writ petition. In any event, such allegations

having never been made against the petitioner previously as a ground of

blacklisting and no opportunity of being represented/heard being given to

the petitioner, the same cannot be brought in at the subsequent stage of

the writ petition by the Bank as a clear afterthought.

44. There are several surrounding circumstances, as held by the order dated

February 19, 2021 in WPA 11563 of 2020, which point to the conclusion

that preponderance of probability unerringly indicates towards a backlash

and witch-hunting exercise on the part of the Bank to cover up laches of its

officials, of which the petitioner became a victim. Not only was the then

Branch Manager of the Alam Bazar Branch of SBI facing serious charges in

the order of the DRT itself, the Bank's reputation was at stake, which might

very well have prompted the AGM (Law), a subordinate in the hierarchy, to

have given a favourable report to protect the skin of the bank and the

Branch Manager.

45. We cannot ignore the fact that the petitioner was awarded damages by the

Consumer Redressal Forum and was absolved by the Bar Council of West

Bengal on the complaint lodged against the petitioner by the Bank, both of

which have attained finality.

46. In such view of the matter, the impugned blacklisting of the petitioner and

the consequential action taken by the respondent no.1-Bank was patently

mala fide, arbitrary and violative of principles of natural justice, in

particular the doctrine of Audi Alterem Partem.

47. However, insofar as the petitioner's claim of arrear professional fees is

concerned, it is beyond the scope of the writ court to adjudicate such

money claim on merit and/or to invite and assess detailed evidence on

disputed questions of fact for directing any arrear amount to be paid on

such score in favour of the petitioner.

48. However, this much is obvious from the above observations that there was

no basis for the Bank to withhold the professional expenses incurred and

fees earned by the petitioner for his work done for the Bank.

49. Since the Shyambazar Branch of the SBI has subsequently allocated work

to the petitioner, it cannot be said that the blacklisting was a deterrent for

withholding the professional dues of the petitioner.

50. Moreover, it is well-settled that the Bank does not have any lien on the

professional fees of its lawyer, who is not even a customer of the Bank.

51. It is well-settled that a public body, which discharges public function, is

required to be more transparent and maintain a much higher standard of

ethics than an ordinary litigant, since it represents the State.

52. The present claims are not confined merely to a private cause of action of

the petitioner but relate to the patent arbitrariness exhibited by the Bank

in blacklisting the petitioner. Since the petitioner had acted as the lawyer

of the SBI, a Nationalized Bank, which deals with public money, thereby

protecting public interest before courts and forums, the element of public

law is definitely involved in the present case.

53. Thus, the arguments of the Bank as regards non-maintainability on such

score cannot but be brushed aside.

54. In the light of the above observations and findings, W.P.A. No.26580 of

2008 is allowed in part, thereby setting aside the blacklisting order dated

July 21, 2005 of the petitioner and the enquiry report and other

observations leading thereto as well as all other consequential action. It is

hereby held that the Bank has no entitlement to withhold the professional

fees and expenses borne by the petitioner for conducting the litigation on

behalf of the respondent no.1-Bank.

55. Since the petitioner was all along proceeding with the writ petition, which

was entertained and pending for so long and included the claim of such

arrear amount of fees, it is hereby observed that the petitioner is entitled to

the protection under Section 14 of the Limitation Act, 1963, since the

petitioner was acting on the bona fide misapprehension that non-payment

of his due arrear bills, being directly in consequence of the impugned

blacklisting, was also part of the cause action of the present writ petition.

56. Although the entitlement of the petitioner to get his arrear professional fees

and expenses is hereby upheld, in view of the observations above that the

writ court does not have the mechanism to grant such relief, liberty is

granted to the petitioner to approach the competent forum/Civil Court,

claiming the said professional fees and expenses on the basis of his bills,

raised by the petitioner.

57. Upon such approach being made, the competent court/forum shall

adjudicate on such issue expeditiously, and direct the respondent no.1-

Bank to disburse the arrear amounts at the earliest.

58. There will be no order as to costs.

59. Urgent certified copies, if applied for, be issued to the applicants subject to

compliance of due formalities.

( Sabyasachi Bhattacharyya, J. )