Madhya Pradesh High Court
Sandeep Kumar Shrivastava vs Punjab National Bank on 20 February, 2026
Author: Vishal Mishra
Bench: Vishal Mishra
NEUTRAL CITATION NO. 2026:MPHC-JBP:21493
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IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VISHAL MISHRA
ON THE 20th OF FEBRUARY, 2026
WRIT PETITION No. 19009 of 2024
SANDEEP KUMAR SHRIVASTAVA
Versus
PUNJAB NATIONAL BANK AND OTHERS
Appearance:
Shri Prakash Upadhyay - Senior Advocate with Shri Utsarg Agarwal -
Advocate for petitioner.
Shri Shreyas Dubey - Advocate for respondent No.1.
ORDER
The present petition has been filed against an order dated 10.09.2020
passed by the respondent No.1/Bank de-panelling the petitioner from the
banks panel of approved valuer holding that the petitioner is guilty of
misconduct of incorrect valuation of the property.
2. As far as delay in approaching this Court is concerned, it is
contended that the impugned order has been passed on 10.09.2020, but the
same was never communicated to the petitioner and he came to know about
the same on 11.02.2023 by the Institution of Valuer, Delhi. The petitioner
was informed that other nationalized banks have decided to follow the
decision taken by respondent No.1, therefore, he made an application under
Right to Information Act, 2005 on 01/05/2024 with the respondent No.1 and
the same has been replied on 20/05/2024 with the copy of the order.
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
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Thereafter the present petition has been filed. Therefore, there is no delay in
filing this petition.
3. It is the case of the petitioner that he is practicing as a civil
engineer, architect, valuer and a chartered engineer in his practice
Consultancy Firm since the year 1994 having a long standing reputation and
goodwill of 30 years. There were no complaints made by any bank or client
regarding the work of the petitioner at any point of time. The petitioner has
been empanelled in various banks and letters and certificates have been
issued regarding the satisfactory work of the petitioner. The petitioner was in
panel of the respondent No.1 for more than 20 years and during the said 20
years period, there were no complaints against the working of the petitioner.
4. The respondent/bank has forwarded documents of one Akhilesh
Pandey (purchaser) and Ajay Patel (seller) between whom an agreement has
been executed for sale of a ready built house. The bank was considering the
case of finance of the ready built house and thus after verification of the
documents and physical inspection of the property by the bank officials, the
case was forwarded to the petitioner for valuation. The said document
consists of agreement which was executed between the prospective borrower
and erstwhile owner of the property; the affidavit of the proposed borrower,
the search report of the bank’s advocate, the registration deed of the plot, the
sanction map along with revenue documents which clearly state that there is
a ready built house which was forwarded to the petitioner for valuation. It is
argued that in terms of the standard banking practice, the primary
responsibility of verification of documents and site inspection regarding
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
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identification of the property is upon the bank officials and competent
advocate engaged by the bank. The role of the petitioner was restricted to
conduct valuation of the property which is to be identified by the bank
officials. The petitioner on the basis of the documents provided by the bank
had valued the property and as it was in corroboration with other documents,
the petitioner issued a valuation report. Along with the valuation report, the
petitioner has submitted the photographs of the building which he has been
inspected. There are no defaults on part of the borrower’s account and the
record of the respondent No.1 indicates that after repaying the entire loan
amount, the borrower has taken the original documents from the bank and
now the bank was not in possession of the original documents relating to the
said transaction.
5. On 15.04.2019, a show cause notice was issued to the petitioner
for improper valuation of the property claiming that plot against which a loan
was taken does not have any construction and it is alleged that the petitioner
has issued an incorrect valuation report. The same was replied by the
petitioner specifically pointing out that he has visited the property and the
petitioner has justified his stand. It is his case that along with valuation
report, he has submitted photographs of the property which was inspected by
him. The sale-deed which was mortgaged with the bank contains a different
photograph and a different description of the property. There was a registry
of the house but the pictures are of empty plot which was to be verified by
the concerned bank manager. He has drawn attention of this Court to the
sale-deed (Annexure P/7) which was executed. The record indicates that after
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
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discovery of the fraud, there was another valuation which was got done by
the bank through another empanelled valuer and in the said valuation report
there is a remark which indicates that though the registered sale-deed
mentioned a house constructed on the plot, however, the property is a vacant
plot. The property which was inspected/valued by the petitioner, is still in
existence. It is his case that before filing the present petition, the petitioner
himself has again inspected the spot and found the building to be in order.
6. After the issuance of a show cause notice to the petitioner and
after filing of a reply, there was no correspondence by the bank. The
opportunity of hearing was granted to the petitioner during COVID-19
through video conferencing. However, without formal correspondence with
the petitioner, the order impugned has been passed making adverse
observation against the petitioner and directed to depanel the petitioner from
the list of approved valuers and the respondent No.1 has circulated the said
order to the Indian Banking Association having membership of all the
nationalized banks. It is the standard practice to depanel or blacklist any
valuer who is found to be guilty of misconduct in a valuation report. The said
issue was communicated to the Institute of Valuers which is an Organization
protecting the interest of professional engaged in the valuation of properties,
who has issued notice 11.02.2023 to the petitioner informing action taken by
the respondent No.1. As no information was given to the petitioner, under
compelling circumstances, he filed an application under Right to Information
Act seeking information regarding action taken by the respondent No.1. In
response to the same, the impugned order dated 10-09-2020 has been
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
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supplied to the petitioner on 20.05.2024. Thereafter, this petition is filed.
7. It is the case of the petitioner that he has carried out the valuation
of the property in pursuance to the documents which were supplied by the
bank authorities as well as the report submitted by the counsel who has
inspected the premises and on that basis the valuation report was submitted
by the petitioner. For identification of the property, the responsibility is of
the bank officials and of the person who is giving a report i.e. the advocate.
The work of the petitioner is to value the property for which documents have
to be supplied to him. The action by the respondents is per se illegal and the
same is having an adverse impact upon the working of the petitioner as the
petitioner is having a long standing of more than 30 years dealing with the
banks and carrying out the valuation of the properties without there being
any complaint against him. By the impugned order, the respondents are now
depanelling the petitioner and disqualifying the petitioner for an indefinite
period, resulting into, the profession death of the petitioner’s career and is
also adversely affecting the goodwill and reputation of the petitioner without
there being any fault of the petitioner. It is not the case of the bank that due
to the fault of the petitioner in carrying out a wrong valuation of the
property, the loan given to the borrower is not being repaid or the bank has
suffered sufficient loss. However, the bank loan is completely repaid, the
original documents which were mortgaged with the bank have also been
released to the concerning borrower. Therefore, the impugned order is per se
illegal and the same is also passed without providing a personal hearing to
the petitioner as the petitioner was permitted to appear through video
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
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conferencing during COVID period. Thus, the effective hearing was not
granted to the petitioner. He has prayed for the quashment of the impugned
order.
8. On notice being issued, a reply has been filed by the respondent
No.1. They have denied the averments of the writ petition. It is contended
that the respondent No.1 is having a branch at Medical College, Rewa. On
25.07.2015, they had received an application for sanction of the credit
facility of housing loan of Rs.12.00 lakhs by one Mr. Akhilesh Pandey for
property having details of the plot with constructed house on it at Mauja:
Rewa, Khasra No.670/1/tha, PHN:Rewa (31), RNM: Rewa, Circule: Rewa,
Ward No.25, Tehsil: Huzur, District Rewa admeasuring 1200 sq. feet. As per
the established procedure for sanctioning the credit facility, the valuation of
secured assets was required to be obtained from the respondent/Bank through
an empanelled valuer. The petitioner was engaged for obtaining valuation of
the secured assets and it was expected that the petitioner will follow the
reasonable principles of valuation and will perform his obligation diligently
and fairly, thereupon securing the interest of the respondent/bank. The
valuation report submitted by the petitioner dated 04.08.2015 shows that the
market value of the secured asset was Rs.20,32,500/- and the distress
value/realizable value was Rs.18,50,000/-. The petitioner has annexed the
photographs of the secured assets along with the valuation report to showthat he has physically verified the same. It is contended that the petitioner
was required to physically verify the property and valuation has to be
determined only thereafter. Relying upon the valuation report, theSignature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
NEUTRAL CITATION NO. 2026:MPHC-JBP:214937 WP-19009-2024
respondent/bank has credited facility of housing loan of Rs.12,00,000/- to the
borrower which was declared as a non-performing asset on 08-11-2018.
Thereafter, the borrower preferred an application for one-time settlement
before the bank/authorities. As it is for the consideration of one-time
settlement proposal, the respondent/bank sought for fresh valuation of the
secured asset wherein on 05-08-2018 an investigation on the property was
carried out by the special investigating officer of the respondent/Bank along
with the then Branch Manager wherein it was found that no building existed
there, instead only a vacant plot was there. It is only then the factum of the
wrong valuation report being given by the petitioner came to the knowledge
of the authorities. Thereafter, a show cause notice dated 15.04.2019 was
issued to the petitioner seeking explanation, which was duly replied
assigning several reasons and tendering explanation for the discrepancies
pointed out by the respondent/bank in the show cause notice. The reply
submitted by the petitioner was considered at length by the Circle Office
Annual Valuation Review Committee (in short “COAVRC”) on 03-05-2019
and it was found that the reply of the petitioner was not satisfactory and
vague in nature. Therefore, the matter was referred to the Zonal Office
Bhopal for depanelment of the petitioner. Thereafter, the meeting of
COAVRC was held on 06-05-2019 for consideration of issue of depanelment
of the petitioner and after due deliberation at length, it was opined that some
more documents are required from the branch; such as original search report
of the advocate, agreement to sale, sanctioned map of the property etc. and
after scrutiny of these documents, a final decision will be taken in the next
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
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meeting. In the next meeting, it was found that the property valued by the
petitioner is different from which actually exists. It was found that in later
valuation report dated 26.08.2018 given by valuer Mr. Vishnu Agarwal, the
photographs of the valued property is different from the photographs given
in the valuation report by the petitioner. The registry document showed that
the build-up area is 700 sq. ft., whereas the valuation report of the petitioner
showed that the area to be 750 sq. ft. Therefore, under the unanimous
opinion, the matter was forwarded to the Zonal Office for further necessary
action at the length. On the basis of the recommendation of the COAVRC,
the Zonal Office of the respondent/Bank have resolved to schedule a meeting
on 20.03.2020. An opportunity of hearing was sought to be offered to the
petitioner and other valuers who were recommended for depanelment before
the Conflict Resolution Committee. The meeting was held on 18.08.2020
before the Conflict Resolution Committee at Zonal Office Bhopal, wherein
the petitioner was offered an opportunity of personal hearing. Hearing was
conducted through video conferencing. Thereafter, a resolution was passed
on 10.09.2020 by the Zonal Office, wherein it was decided to concur with
the recommendation of COAVRC for depanelment of petitioner from the
bank panel and valuers list. The aforesaid exercise of depanelment of the
petitioner has been carried out in consonance with clauses 12 and 13 of the
guidelines for empanelment and depanelment of valuers dated 29.07.2019.
Thereafter, the petitioner’s name was sent in the cautionary list to the Indian
Banking Association in accordance with the guidelines of the
respondent/bank and in pursuance to clause 4 of the circular of Indian
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
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Banking Association dated 27.08.2009. It was advised to all the banks to
report to Indian Banking Association details to the third party including
professionals involved in the frauds. No illegality is committed by the
authorities in carrying out the entire procedure. The principles of natural
justice are followed in the matter while passing the final order. Therefore, he
has prayed for dismissal of the writ petition.
9. A rejoinder has been filed in the matter, reiterating the earlier
everments made in the writ petition. It is further alleged that there is no
denial by the respondent/Bank that the property has been identified by the
officials of the bank. The documents such as; the sale deed and detailed
particulars of the property along with the report given by the advocate of the
bank were provided to the petitioner, on the basis of which, the valuation has
been carried out after physical inspection of the property in question. It is not
the case with the respondent/bank that the material which has been provided
by the bank was doubted, rather the sale-deed itself shows that there is a
house constructed on the said plot, admeasuring 700 square feet, which is
also admitted in the return by the respondent/Bank. Therefore, the petitioner
had physically inspected the property and gave the valuation report and
found that 750 square feet construction was carried out on the property in
question. The second valuation report which has been given and which is the
basis of passing an order of depanelment of the petitioner shows that no
construction is raised on the property in question. The same is contrary to the
observations made in the sale-deed. Therefore, the said report could not have
been taken into consideration by the respondents/authorities prior to passing
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
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any order of depanelment of the petitioner. Even otherwise, as already
admitted by the respondent/Bank that hearing opportunity was granted to the
petitioner through video conferencing as the entire country was at a
lockdown during the COVID-19 pandemic, therefore, effective hearing
opportunity is not granted to the petitioner. If there is a discrepancy in the
reports given by the petitioner as well as the second independent valuer,
coupled with the fact that the document that is the sale deed shows that there
is a construction on the property in question, then the authorities should have
made a physical verification of the property in question along with the
petitioner and after giving a full opportunity of hearing to the petitioner
should have passed the impugned order. The order impugned passed by the
authorities is virtually amounting to civil death/professional death of the
petitioner as there is a direction to circulate the depanelment of the petitioner
across all the nationalized banks which in turn is degrading the reputation of
the petitioner and causing huge professional loss to him. He has prayed for
quashment of the impugned order.
10. Heard learned counsel for the parties and perused the records.
11. From the perusal of the record, it is an admitted position that the
impugned order pertains to depenalment of the petitioner from the
respondent/bank. The matter has been forwarded to the Indian Banking
Association, which in turn, has given an effect that the petitioner is virtually
blacklisted by the Indian Banking Association for an indefinite period. It is
also an admitted position that the petitioner has carried out the valuation of
the property on the basis of which credit loan facility was provided to the
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
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borrower. The matter of giving an incorrect valuation report came to the
knowledge of authorities, then the borrower’s account was declared as non-
performing asset on 08-01-2018 and thereafter there was a proposal made by
the borrower for one time settlement before the respondent/bank. Thereafter,
a fresh valuation of the secured asset was obtained by the respondent/Bank
through an independent valuer and the report was submitted that there is no
building in existence, it is only a vacant plot.
12. It is not disputed that a show cause notice was issued to the
petitioner on 15-04-2019 seeking an explanation on the following points:-
“(i) In the point no. 6 of the valuation report you have stated the property
as residential house;
(ii) you have attached the photographs of the house under valuation.
(iii) You have stated the market value of the property to beRs 20,32,500 /-
and the distress sale value/realizable value to be Rs.18,50,000/-; and
(iv) The photographs of the house have not been authenticated by the
borrower/owner.”
12.1 The same was replied by the petitioner on 22.04.2019. The
COAVRC has found the reply of the petitioner to be unsatisfactory and
vague and referred the matter to the Zonal Office. In the meeting of
COAVRC which was held on 06-05-2019, it was opined that some more
documents are required from the Branch; such as original search paper of
advocate, agreement to sale, and sanction map of the property. Thereafter,
the meeting took place on 29-05-2019. The registry document shows built up
area as 700 sq.ft. whereas the valuation report by the petitioner shows a built
up area of 750 sq. ft., meaning thereby, there was a construction of 700 sq. ft
on the land in question which is clear from the registry document. Under
these circumstances, how a second valuer report, which is taken into
consideration by the respondent/Bank for depenalling the petitioner and
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
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holding him guilty of giving a false valuation report, can be taken into
consideration because the second valuation report shows that there was no
construction on the plot in question and the plot is lying vacant. The same is
contrary to the registry documents which were duly supplied by the
Bank/authorities to the petitioner for carrying out the valuation of the
property in question. The minutes of meeting dated 29-05-2019 shows that
the property valued by the petitioner is different from which actually exists
about which the special investigation officer has given his report. The second
valuer i.e. Mr. Vishnu Agarwal has given his report and attached some
photographs of the property which are different from the photographs which
are given by the petitioner along with his report. Now, the fact remains that
there is a material contradiction in both the reports as well as the registry
document. It is a categorical stand taken by the petitioner in the reply to the
show cause notice that in the sale deed of the house is clearly mentioned in
writing, but the photograph of the house are replaced by taking a new
photographs of the open plot while pasting them on the clear paper, the
photographs attached are not a part of the new registry and neither they are
verified by the Registrar. The certificate given by the advocate Mr. Sushil
Chandra Mishra dated 28-12-2015 shows that he has verified all the
documents which are supplied to him and given a verification report. The
certificate given shows the photographs are also attached with the registered
sale-deed. The said documents are provided to the petitioner for carrying out
the valuation of the property.
13. The entire action has been taken against the petitioner in
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
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pursuance to clause 12 and clause 13 of the guidelines for impanelment of a
valuer. The relevant are reproduced as under:
“12.1 The “Conflicts Resolution Committee” headed by the ZM, as
mentioned above, after initiating all the following necessary steps,
mentioned in the IRMD Circular 19/2019 dated 21.02.2019, shall take the
final decision for removal of the valuer, involved in adoption of unethical
practices, based on the recommendations of the Circle Office Annual
Valuation Review Committees,(COAVRC):
i. Issue of show cause notice: The valuer shale e given due opportunity to
explain why action should not be initiated against him or her.
ii. Hearing: The valuer shall be given due opportunity to make his/her
point of view known and heard.
iii. Deliberation by the committee: The matter shall be deliberated by
the concerned Conflict Resolution Committee at ZM level.”
14. From the perusal of the aforesaid, it is apparently clear that prior
to taking any action, the valuer has to be given an opportunity of hearing. In
the present case, the hearing was given to the petitioner through video
conferencing during the COVID-19 pandemic which is admitted by the
respondents themselves. The respondent/Bank has further contended in the
return that they have obtained the report from a different valuer i.e. Mr.
Vishnu Agarwal, who has given the photograph of the property valued which
show that they are different from what has been given by the petitioner. Once
there is a discrepancy in the valuation report given by the petitioner and the
valuation report given by Mr. Vishnu Agarwal, then it was incumbent upon
the bank officials to have physically verified the property in question along
with the petitioner, for which the credit loan facility was given by them. But
the said physical verification was not carried out by the bank officials. On the
contrary, the entire action has been taken against the petitioner in pursuance
to the valuation report submitted by Mr. Vishnu Agarwal. The very object of
clause 12.1 of the Removal, Conflict Resolution and Re-empanelment is not
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
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meet out. By the action of the authorities, the professional career of the
petitioner has virtually come to an end because on the recommendation of
the Circle Office Annual Valuation Review Committee, the matter has been
forwarded to the Indian Banking Association who has circulated the aspect
of blacklisting of the petitioner or its depanelment to all the nationalized
banks which has virtually resulting into the professional death of the
petitioner. Such harsh and strong action taken against the petitioner should be
followed by fully complying with the provisions under the guidelines which
are provided for depanelment and after granting full opportunity of hearing
to the petitioner. The principle of natural justice and fair play should have
been adhered to by the authorities. The Full Bench of Hon’ble Supreme
Court recently in the case of Krishnadatt Awasthy vs. State of M.P. and
others reported in 2025 Supreme (SC) 248 with respect to principle of
natural justice and fair play considering the earlier judgments passed in the
cases Maneka Gandhi v. Union of India, (1978) 1 SCC 248; S.N. Mukherjee v. Union
of India, (1990) 4 SCC 594; Siemens Engg. & Mfg. Co. of India Ltd. v. Union of
India, (1976) 2 SCC 981; CCI v. SAIL, (2010) 10 SCC 744; Kranti Associates (P)
Ltd. v. Masood Ahmed Khan, (2010) 9 SCC 496 and in the case of AK Kraipak v
Union of India (1969) 2 SCC 262 has held as under:-
“16. In this case, our primary focus is on procedural impropriety and in
particular, the breach of the principles of natural justice. The process for
arriving at a decision is equally significant as the decision itself. If the
procedure is not ‘fair’, the decision cannot be possibly endorsed. The
principles of natural justice as derived from common law which guarantee
‘fair play in action’, has two facets which include rule against bias and the
rule of fair hearing. Additionally, a reasoned order has also been regarded
as a third facet of the principles of natural justice and holds utmost
significance in ensuring fairness of the process.
17. The first issue that falls for our consideration is whether the selection
Signature Not Verified
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KUMAR JHARIYA
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stands vitiated on the ground of violation of the rule against bias. It must
be borne in mind that when a statute specifies the procedure for
administrative decision making, the principles of natural justice
supplement but do not substitute the statutory procedure. However, even if
the statute does not provide for the administrative procedure, the
authorities are bound to make decisions adherence to the principles of
natural justice.”
15. It is an admitted fact that the petitioner was permitted to appear
before the authorities through video conferencing. He was not supplied the
entire documents which were relied upon by the respondents. A full fledged
inquiry was required to be conducted by the authorities, the petitioner should
have been given an opportunity to go through the entire documentary
material relied upon and should be given an opportunity to examine the
witnesses whose report was considered prior to passing the impugned order.
The Division Bench of this Court in the case of Manita Jaiwar (Smt.) Vs.
State of M.P. and others reported in I.L.R.(2009) M.P. 3067 had an occasion
to consider the similar issue and has held as under :-
“5. After hearing the learned counsel for the parties, it is clear that in the
instant case fair procedure has not been adopted. Proceedings under
section 40 of the Adhiniyam of 1993 was initiated by issuance of show
cause notice dated 16-5-2006 by the SDO. No doubt about it that earlier a
complaint was filed on 27-3-2006 in which the enquiry was conducted by
the CEO but that was not bipartite and regular enquiry. Statements of
certain witnesses were recorded, which have formed the basis of removal
of the petitioner from the post of Sarpanch. Admittedly opportunity of
cross examination was not afforded to the petitioner on the witnesses who
were examined by the CEO, Janpad Panchayat, Balaghat while conducting
the enquiry into the complaint dated 27-3-2006. In the proceedings under
section 40 of the Adhiniyam, 1993 none of the witnesses whose statements
were recorded by the Enquiry Officer, were examined. Opportunity of
cross-examination was also not afforded to the petitioner. Even
complainant was not examined. Opportunity to adduce the evidence was
also not afforded to the petitioner.
6. This Court in Kailash Kumar Parmanand Dangi v. State of M.P. , 1999
(2), MPLJ 722 has held that in such matters the enquiry held behind the
back of Sarpanch, cannot be relied upon. The following discussion hasSignature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
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been made by this Court:
14. In the present case there was not total violation of the principles of
natural justice as a show cause notice was given and the reply of the
petitioner obtained. But keeping in view the facts of the case certain facets
of natural justice as stated above were not complied with resulting in
prejudice to the petitioner. He was not permitted to adduce his own
evidence to rebut the material collected against him. The charges were
such which could be proved or disproved by evidence in the inquiry. One
of the main charges was the distribution of pattas to those who were not
landless and a conclusion on this point could be reached after recording
evidence and after seeing the list supplied by the Tehsildar or the B.D.O.
The prescribed authority in the impugned order has not dealt with this
aspect. Similarly the charges regarding negligence in the maintenance of
garden, supply of water, drainage and information regarding the meeting
of the Gram Sabha could be decided on the basis of evidence and not
merely relying upon a preliminary inquiry report. The basic fault in the
impugned order is that an inquiry held by the B.D.O, behind the back of
the petitioner has been held to be a valid ‘inquiry’ under section 40 of the
Act and he has been packed up on the basis of that inquiry without even
supplying a copy of the same to the petitioner, and without affording him
an opportunity to lead his own evidence even when he repeatedly asked
for the same. This was denial of fair hearing resulting in serious prejudice
to the petitioner. The action of removal and disqualification has to be
struck down as there has been a failure of justice. The guilty must be
punished but the finding of guilt has to be arrived after fair hearing which
was denied in this case. In Ballabhdas v. State of M.P, 1998 (2) JLJ 303, it
has been observed by this Court that a fullfledged enquiry is provided
under section 40 of the Act. It contemplates ‘due enquiry’. As observed in
Delhi Transport Corporation v. DTC Mazdoor Congress, 1991 Supp (1)
SCC 600: AIR 1991 SC 101right to fair treatment is an essential inbuilt of
natural justice which is an integral part of the guarantee of equality
assured by Article 14 of the Constitution of India. The concept of
reasonableness and non-arbitrariness pervades the entire constitutional
spectrum and is a golden thread which runs through the whole fabric of
the Constitution.
In Rajendra Singh Raghuvanshi v. State of M.P., 2004 (4) MPLJ 6, this
Court has laid down that copy of the enquiry report has to be furnished. In
Mango Bai v. State of M.P , 2003 (2) MPLJ 112, this Court has laid down
thus:–
9. Principles of natural justice are required to be observed before ordering
removal of Sarpanch under section 40 of Act in Kailash v. State of M.P,
1999 (2) MPLJ 722: 1999 (2) JLJ 280 esteemed brother S.P. Khare, J.
considered the question and held that removal of Sarpanch under section
40 is a serious matter when he is removed and further disqualified for sixSignature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
NEUTRAL CITATION NO. 2026:MPHC-JBP:21493
17 WP-19009-2024
years to be elected under the Act. It is not sufficient to give a mere lip-
service to the requirement of law. It is true that it is not specifically
provided in section 40 that principles of natural justice should be ‘followed
while holding’ an enquiry but it is implicit in this provision that the office-
bearer who is sought to be removed will be given a fair hearing. This
Court held that the words “after such inquiry as it may deem fit to make”
in the main part of section 40(1) of the Act would mean an inquiry which
is held in the presence of the office bearer and not behind his back. He
should be allowed to inspect the documents which are to be relied upon
against him and he should have the right to adduce his own evidence.
These are the important facets of an inquiry to be held in conformity with
the principles of natural justice. It is not the subjective choice of the
prescribed authority to get an inquiry held of any kind. It does not
envisage a secret enquiry or a preliminary enquiry alone. That is made
only for collection of evidence and at that stage there is no participation of
the person against whom the action is sought to be taken. The words “as it
may deem fit” have to be construed objectively and would mean an
inquiry depending upon the facts and circumstances of each case. Some of
the facts of the inquiry may be excluded if the facts are not very much in
dispute or there are other circumstances to dispense with them. But the
office bearer has a right of fair hearing. “You must hear the person who is
going to suffer”. That is a duty which lies upon everyone who decides
anything. There is, however, some flexibility depending upon the subject-
matter. Similar is the law laid down by this court in Raja Rai Singh v.
State of M.P , 2001 (4) MPLJ 364: 2000 (2) JLJ 242.
10. Secret enquiry or preliminary enquiry alone is not enough. Collection
of evidence is required and participation of person against whom the
action is sought to be taken. Order sheets of the SDO’s file indicates that
by-parte enquiry was not held at all nor was directed. Panchayat Inspector
conducted the ex parte enquiry. Report of which not supplied. Thereafter
an incompetent authority, SDM considered the report and recommended
the removal and order dated 31-3-1999 mentioned that Prescribed
Authority i.e SDO was in agreement with the view of the SDM and has
passed the order on 31-3-1999 itself. Whereas it was incumbent upon th
SDO to receive the reply and to apply independent mind after holding an
enquiry. All these requirements have been flagrantly violated in the instant
case. Considering the serious nature of charges levelled against the
petitioner she ought to have been given due and proper opportunity.
20. As per the said judgment, the enquiry conducted by the CEO was not
bipartite. No opportunity to cross-examine the witnesses were afforded.
None of the witnesses including the complainant whose statemen were
recorded by the Enquiry Officer were examined. The petitioner was also
not given any opportunity to cross-examine the witnesses and to adduce
the evidence. Thus, no due and proper enquiry was conducted by the SDOSignature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44
NEUTRAL CITATION NO. 2026:MPHC-JBP:21493
18 WP-19009-2024
which cause serious prejudice to the petitioner.”
16. In the present case, the petitioner has categorically denied the
allegations levied against him. Therefore, in view of the principle laid down
in the aforesaid case, once the allegations are denied, then a detailed enquiry
should be conducted into the matter, providing opportunity of hearing as
well as to cross-examine the witnesses, on the basis of which, the order is
passed. In the present case, the allegation is made on the basis of valuation
report given by an independent valuer. The petitioner should be provided
opportunity of hearing to cross-examine the valuer as well as the bank
authorities including the advocate who has verified the documents and
supplied to the petitioner on the basis of which valuation of the property in
question was done. No such detailed enquiry was conducted even after denial
of charges by the petitioner. Therefore, as the impugned order dated
10.09.2020 passed by the respondent/Bank is without conducting a detailed
enquiry in the matter, the same is unsustainable and it is hereby quashed.
17. The writ petition stands allowed. No order as to costs.
(VISHAL MISHRA)
JUDGE
sj
Signature Not Verified
Signed by: SUSHEEL
KUMAR JHARIYA
Signing time: 20-03-2026
18:16:44