The Supreme Court allowed the appeal of advocate Ajay Vijh and directed immediate removal of his name from the Indian Banks’ Association (IBA) Caution List.
Background
Ajay Vijh, a panel counsel for Canara Bank, rendered a 2015 legal opinion on property title for a credit facility. The Bank alleged negligence in title verification (omission regarding prior sales). It removed him from the panel and forwarded his name to IBA, leading to his inclusion in the Caution List titled “Third Party Entities Involved in Fraud” with remarks on “wrong legal opinion and negligence.” Vijh’s writ petition challenging this was dismissed by the Allahabad High Court on the ground that IBA is not “State” under Article 12.
Supreme Court’s Ruling (2026 INSC 670)
Key Holdings:
- Writ Maintainability under Article 226: Petition maintainable. Caution List action affects fundamental right to practise profession under Article 19(1)(g). Article 226 extends to any person/authority performing public functions, even if not “State” under Article 12. Public law element and reputational harm sufficient.
- Scope of Caution List: RBI guidelines/circulars (2009, 2016, 2024) target fraud, dishonesty, criminality, and serious misconduct. Not meant for mere negligence or errors of professional judgment. Inclusion of advocate’s name with adverse remarks unsustainable.
- Exclusive Jurisdiction of Bar Councils: Allegations of professional misconduct/negligence fall exclusively under Advocates Act, 1961. State Bar Councils/BCI alone competent to inquire. Banks may discontinue panel empanelment but cannot blacklist via public Caution List.
- Independence of Legal Profession: Self-regulation is cornerstone. Parallel mechanisms by banks/IBA undermine Rule of Law and judicial independence.
Directions:
- Remove appellant’s name from Caution List forthwith.
- BCI to undertake performance audit of its disciplinary jurisdiction for transparency, accountability, and effectiveness.
- BCI to institutionalise Continuing Legal Education (CLE) and consider establishing a National Legal Academy (NLA) on lines of National Judicial Academy.
Key Takeaways
- Caution Lists confined to fraud; cannot extend to professional negligence.
- Banks have contractual freedom to disengage panel advocates but no power to publicly declare incompetence.
- BCI/Bar Councils hold monopoly over advocate discipline.
- Self-regulation must be accompanied by robust accountability and continuous education.
Case Details
Case Name: Ajay Vijh v. Indian Banks Association & Ors.
Citation: 2026 INSC 670 – Reportable
Court: Supreme Court of India
Click HERE for full Judgment
Lawcutor 