Authority: Supreme Court of India, Civil Appellate Jurisdiction

Order Date: 07 July 2026

Case Overview

  • Appellant: Ajay Vijh, advocate enrolled in 1998, served as panel counsel for Canara Bank from September 2010.
  • Respondents: Indian Banks Association (IBA) and other unnamed parties.
  • Dispute origin: Communication dated 27‑07‑2018 from the regional manager of Canara Bank alleged that a legal opinion furnished by the appellant on 08‑08‑2015 regarding immovable property offered as security for a credit facility of Rs. 2.00 crore was erroneous. The opinion stated that the land was wholly owned by M/s Pushpanjali Buildwell Private Limited, whereas a portion had been alienated on 31‑10‑2012.
  • Appellant’s explanation: Submitted on 17‑08‑2018, asserting reliance on a search certificate from the Sub‑Registrar, Hapur, and that the alleged sale deeds were not discernible at the time.
  • Bank’s action: On 31‑01‑2019 the bank removed the appellant from its panel on grounds of negligence in title verification.
  • Inclusion in Caution List: The bank forwarded the appellant’s name to IBA; with effect from 05‑02‑2020 his name was entered in the IBA Caution List titled "Third Party Entities Involved in Fraud" with the remark "Given Wrong Legal Opinion And Negligence in Conducting Search and Bank Was Exposed to Loss and Financial Risk". No prior notice or hearing was provided.
  • Consequence: The appellant’s empanelment with other banks was terminated, harming his reputation and professional engagements.
  • High Court proceedings: A writ petition under Article 226 was filed in the High Court of Judicature at Allahabad (Civil Misc. Writ Petition No. 12074 of 2023) and dismissed on the ground that IBA is not a "State" within Article 12.
  • Appeal: The present Civil Appeal No. of 2026 (arising out of SLP (C) No. ) challenges the High Court order. Issues considered: (i) maintainability of the writ petition, (ii) nature and legal effect of the Caution List, (iii) exclusive jurisdiction of the Bar Council of India under the Advocates Act, 1961 for professional misconduct of advocates.
  • RBI regulatory framework: Circular dated 16‑03‑2009 and subsequent Directions (2016 Frauds Classification and Reporting, 2024 Master Directions on Fraud Risk Management) empower banks to report third‑party professionals involved in frauds to IBA. The 2009 circular expressly deals with fraud and does not cover mere professional negligence. The 2016 and 2024 provisions (clauses 8.12.4, 8.12.5, 4.2) reiterate that inclusion is limited to entities that have facilitated fraudulent transactions, with a requirement of natural‑justice hearing.

Final Outcome

  • The Supreme Court held that the writ petition under Article 226 is maintainable because the IBA, by issuing a sector‑wide Caution List, performs a public function affecting fundamental rights.
  • The Court declared that the Caution List is intended solely for fraud‑related matters; inclusion of the appellant on the basis of alleged negligence is unsustainable and illegal.
  • The respondents (the bank and IBA) are directed to remove the appellant’s name from the Caution List with immediate effect.
  • The Court directed the Bar Council of India (BCI) to undertake a performance audit of its disciplinary jurisdiction, to report the audit findings, and to file an affidavit on actions taken.
  • The Court further directed the BCI to institutionalise Continuing Legal Education (CLE) for advocates and to consider establishing a National Legal Academy (NLA) analogous to the National Judicial Academy.
  • The appeal is listed for further directions on 31‑08‑2026 to consider the CLE implementation and the NLA proposal.

Topics: Legal Profession Regulation, Banking Caution List, Judicial Review