JUDGMENT :

Table of Contents

1. Delay condoned. Leave granted.¹[The present Civil Appeal arises from the judgment and order dated 20.11.2023 passed by the High Court of Judicature at Allahabad in Civil Misc. Writ Petition No. 12074 of 2023]

I. The Dispute and Its Consideration.

2. The appellant, an advocate by profession, served as panel counsel for Canara Bank at the relevant time. Pursuant to a legal opinion rendered by him in the year 2015, the Bank considered it necessary, not only to remove his name from its panel of advocates but also to include his name in what is called the “Caution List”, maintained by the Indian Banks’ Association (IBA) as per guidelines in circulars issued by RBI. The writ petition instituted by the appellant challenging the aforesaid action of the Bank and the IBA came to be dismissed on the ground that the IBA is not a State under Article 12 of the Constitution.

2.1 Having regard to the significance of the issues involving autonomy, self-regulation and accountability of the legal profession, we permitted the learned counsels appearing for respective parties, as well as Mr. Maninder Singh, Amicus Curiae to address us on the maintainability of the writ petition, as also the merits of the case. For the reasons to follow, we have held that a writ petition under Article 226 is maintainable.

2.2 On merits, we have declared that the Caution List maintained by the IBA is intended to operate only in cases involving fraud, dishonesty, criminality, or other serious misconduct affecting the banking system. It was never designed to address cases resting merely on alleged negligence or errors of professional judgment. Consequently, we have held that inclusion of appellant’s name in the Caution List solely on account of negligence is unsustainable in law.

2.3 The issues that have arisen for consideration compelled us to examine certain foundational principles, namely, independence of legal profession and the concomitant freedom of self-regulation. These principles are well recognised and have, in fact, secured statutory recognition under the Advocates Act, 1961 (‘Act’). Matters relating to professional conduct or misconduct of advocates fall within the exclusive jurisdiction of the regulatory bodies constituted under the Act, namely the Bar Council of India and the respective State Bar Councils. Banks have the choice of disengaging a legal professional and also to remove his/her name from the panel if the services are not up to the mark, but an action in the nature of public declaration to all other banks about the conduct, competency or incompetency of an advocate is clearly beyond their power and jurisdiction and clearly illegal.

2.4 At the same time, this Court is of the considered view that the right and privilege of self-regulation of the Bar, through peer review, must withstand scrutiny on the touchstones of transparency, accountability, and institutional effectiveness. Public confidence in the legal profession, which is indispensable to the administration of justice, can be sustained only when disciplinary mechanisms inspire trust and credibility. We have therefore considered it appropriate to direct the Bar Council of India to undertake a performance audit of the efficacy and credibility of its disciplinary powers and to adopt such corrective and remedial measures as may be found necessary.

2.5 Further, in order to maintain the highest s