The Supreme Court has held that banks and the Indian Banks’ Association (IBA) cannot include an advocate’s name in the IBA Caution List merely on allegations of professional negligence or an erroneous legal opinion. The Court directed the immediate removal of advocate Ajay Vijh’s name from the Caution List, holding that such action was without jurisdiction and impermissible in law.
A Bench of Justice P. Narasimha and Justice Alok Aradhe allowed the appeal against the Allahabad High Court’s order, which had dismissed the writ petition on the ground that the IBA is not ‘State’ under Article 12 of the Constitution. The Supreme Court held that the writ petition was maintainable under Article 226 since inclusion in the Caution List had a direct bearing on the advocate’s fundamental right to practise the profession under Article 19(1)(g) and carried significant civil consequences affecting his reputation and professional engagements.
On merits, the Court held that the RBI’s regulatory framework governing the IBA Caution List is intended to address cases involving fraud, dishonesty, criminality and deliberate facilitation of fraudulent banking transactions, and cannot be extended to cases alleging professional negligence or an incorrect legal opinion. It observed that while banks are free to discontinue empanelment of advocates if dissatisfied with their services, they cannot publicly circulate adverse remarks questioning an advocate’s professional competence through the Caution List mechanism.
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Emphasising the statutory scheme under the Advocates Act, 1961, the Bench held that questions relating to an advocate’s professional misconduct or negligence fall exclusively within the disciplinary jurisdiction of the State Bar Councils and the Bar Council of India. Banks or the IBA cannot assume the role of disciplinary authorities or effectively blacklist advocates by circulating adverse remarks regarding their competence. If a bank believes an advocate has committed professional misconduct, its remedy is to approach the competent Bar Council under the Advocates Act.
The Court further highlighted that the independence of the legal profession is inseparable from its system of self-regulation. Permitting external agencies to adjudicate upon the professional competence of advocates would undermine the statutory framework governing the Bar and erode the independence of the legal profession.
While recognising the need for accountability within the legal profession, the Court directed the Bar Council of India (BCI) to undertake a comprehensive performance audit of its disciplinary mechanism, including the functioning of disciplinary proceedings before State Bar Councils, disposal timelines, pendency, procedural practices and institutional effectiveness.
The Bench also emphasised the need for institutionalised Continuing Legal Education (CLE) for advocates and directed the Bar Council of India (BCI) to establish National Legal Academy (NLA), on the lines of the National Judicial Academy, to promote structured post-enrolment training, professional competence and ethical standards. The matter has been listed on August 31, 2026, for further directions.
