AJAY VIJH
Vs.
INDIAN BANKS ASSOCIATION AND OTHERS
( Before : Pamidighantam Sri Narasimha and Alok Aradhe, JJ. )
Civil Appeal No. ….of 2026 Arising Out of SLP (C) No. of 2026 [@ Diary No. 10787/2024]
Decided on : 07-07-2026
A. Constitution of India, 1950 — Article 226 — Writ jurisdiction — Maintainability — Inclusion of advocate's name in IBA "Caution List" — High Court dismissing writ petition on ground that Indian Banks' Association (IBA) is not "State" under Art. 12 — Held, focus of maintainability has shifted from formal character of respondent body to nature of function performed and effect of impugned action on legally protected rights — Caution List operates as sector-wide adverse accreditation mechanism with public law element, having direct bearing on advocate's right to practise profession under Art. 19(1)(g) — Writ petition against IBA held maintainable notwithstanding IBA not being "State" — Kishor S. Bhat v. Indian Banks' Association, 2018 SCC OnLine Bom 2857, distinguished — Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust v. V.R. Rudani, (1989) 2 SCC 691; Zee Telefilms Ltd. v. Union of India, (2005) 4 SCC 649; S. Shobha v. Muthoot Finance Ltd., 2025 SCC OnLine SC 177, relied on. (Paras 10 to 19)
B. Banking Regulation Act, 1949 — Section 35A — Reserve Bank of India circulars — "Caution List"/"Third Party Entities Involved in Frauds" — Scope and object — RBI Circular dated 16.03.2009, Reserve Bank of India (Frauds Classification and Reporting by Commercial Banks and Select FIs) Directions, 2016, and Master Directions on Fraud Risk Management in Commercial Banks and All India Financial Institutions, 2024 — Held, the Caution List mechanism is confined to third parties/professionals whose acts of omission or commission expose banks to fraud, dishonesty, criminality or other serious misconduct — It was never designed to address cases resting merely on negligence or bona fide errors of professional judgment — Fraud imports mens rea and deliberate intention to defraud; an erroneous legal opinion or lapse in due diligence, absent dishonest intent or deliberate facilitation of illegality, cannot be elevated to fraud — Inclusion of appellant advocate's name in Caution List solely on allegation of negligence in title verification, without any allegation of fraud, collusion or criminal misconduct, held unsustainable and without jurisdiction — Direction issued to remove appellant's name from the Caution List with immediate effect. (Paras 20 to 28)
C. Advocates Act, 1961 — Sections 35, 36, 37, 38 — Professional misconduct/negligence of advocate — Exclusive disciplinary jurisdiction — Held, legal profession is sui generis and independence of the Bar, secured through the principle of self-regulation, is a facet of independence of the judiciary and rule of law — Allegations of professional misconduct or negligence against an advocate fall within the exclusive domain of the disciplinary mechanism under the Advocates Act, 1961, to be examined only by the State Bar Councils and the Bar Council of India — Banks/IBA have no authority to adjudicate upon or pronounce upon the professional competence of an advocate through extra-statutory mechanisms such as a Caution List — Remedy for a bank aggrieved by an advocate's professional negligence is to place material before the competent State Bar Council under the Advocates Act, 1961, and not to resort to unilateral blacklisting — Supreme Court Bar Association v. Union of India, (1998) 4 SCC 409; Bar Council of Maharashtra v. M.V. Dabholkar, (1975) 2 SCC 702; Bar of Indian Lawyers v. D.K. Gandhi PS National Institute of Communicable Diseases, (2024) 8 SCC 430, relied on. (Paras 29 to 36)
D. Advocates Act, 1961 — Sections 35, 36, 36B — Disciplinary mechanism of Bar Councils — Need for accountability and performance audit — Held, existence of a robust, transparent and efficient disciplinary mechanism is essential to public confidence in the legal profession and the administration of justice — Concerns of pendency, procedural delay and lack of transparency in disciplinary proceedings before Bar Councils necessitate periodic evidence-based review — Bar Council of India directed to constitute a committee and undertake a comprehensive performance audit of the disciplinary mechanisms administered by it and the State Bar Councils, examining inter alia number of complaints instituted and disposed of, disposal times, pendency, staffing, and transparency, and to file an affidavit of the action proposed/taken — Yash Developers v. Harihar Krupa Co-operative Housing Society Ltd., (2024) 9 SCC 606, relied on. (Paras 37 to 50)
E. Advocates Act, 1961 — Section 7 — Continuing Legal Education (CLE) — Necessity — Held, maintenance of legal knowledge, advocacy skills and ethical standards requires structured post-enrolment education, akin to Mandatory Continuing Legal Education schemes in the United States, United Kingdom, Singapore, Canada and Australia — Law Commission of India, 184th Report, and Advocates (Amendment) Bill, 2003 (proposing amendment to S. 7), noted — Bar Council of India directed to institutionalise Continuing Legal Education and to constitute a team of senior and junior lawyers and experts to consider and evolve the idea of establishing a National Legal Academy (NLA) for lawyers, on the pattern of the National Judicial Academy for Judges, and to inform the Court of its decision — Reducing pendency held to be a shared institutional responsibility of the Bar and the Bench and not of the judiciary alone. (Paras 51 to 60)
