Advocate added in caution list of Bank: Provisions not applicable on not for bona fide professional errors or negligence.

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In Ajay Vijh v. Indian Banks Association &Ors. [Neutral Citation: 2026 INSC 670, decided on July 7, 2026], the Supreme Court of India delivered a landmark ruling balancing the jurisdictional authority of financial sectors against the statutory independence and self-regulation of the legal profession. The appellant, a panel advocate for Canara Bank, was de-empanelled and subsequently placed on the Indian Banks Association’s (IBA) sector-wide “Caution List” under the category of “Third Party Entities Involved in Fraud” following an allegedly negligent property title verification opinion he rendered in 2015. The Allahabad High Court dismissed his writ petition on the technical ground that the IBA is an association and does not qualify as a “State” under Article 12 of the Constitution.

The Supreme Court allowed the civil appeal, setting aside the High Court’s dismissal and declaring the inclusion of the advocate’s name in the Caution List to be impermissible and without jurisdiction. A Division Bench comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe ruled that writ maintainability under Article 226 focuses on the public nature of the function performed rather than the formal classification of the respondent under Article 12, especially when a fundamental right under Article 19(1)(g) is infringed. On the merits, the Court clarified that Reserve Bank of India (RBI) circulars issued under Section 35A of the Banking Regulation Act, 1949, authorize a Caution List strictly for fraudulent acts involving mens rea, not for bona fide professional errors or negligence. Furthermore, the Court reaffirmed that the Bar Council of India (BCI) and State Bar Councils possess exclusive statutory jurisdiction over professional misconduct under the Advocates Act, 1961. While striking down the bank’s parallel blacklisting system, the Court directed systemic internal updates: ordering the BCI to conduct a performance audit of its disciplinary mechanisms and to institutionalize a framework for Continuing Legal Education (CLE) alongside a proposed National Legal Academy (NLA).

1. Factual Matrix and Lower Court Proceedings

  • The Retained Opinion and Alleged Omission: The appellant, an advocate enrolled since 1998, had served on the panels of multiple financial institutions, including Canara Bank since 2010. In 2018, the bank asserted that a legal search and title opinion rendered by the appellant in August 2015 was negligent. The opinion stated that a parcel of collateral land was fully owned by the guarantor, whereas a portion had actually been alienated via sale deeds three years prior.
  • The Administrative Rejection: The appellant explained that his opinion relied on standard inspection protocols and search certificates issued by the Sub-Registrar’s office, which did not reveal the prior transactions at the time. Dissatisfied, Canara Bank dropped the appellant from its panel for negligence in January 2019.
  • The Blacklisting Cascade: The bank forwarded the appellant’s name to the IBA, which placed him on its industry-wide Caution List under “Third Party Entities Involved in Fraud” with active remarks detailing his alleged negligence. This classification severely disrupted his professional livelihood, resulting in immediate terminations by other banking institutions.
  • High Court Dismissal: The appellant moved the High Court of Judicature at Allahabad under Article 226. The High Court dismissed the writ petition as non-maintainable without reviewing the merits, relying on the private nature of the IBA as established in service disputes like Kishor S. Bhat (2018).

2. Core Legal Issues Formulated

The Supreme Court evaluated three critical issues:

  1. Whether a writ petition under Article 226 is maintainable against the IBA’s sector-wide Caution List system.
  2. Whether an administrative “Caution List” can lawfully cover instances of professional negligence or incorrect legal opinions lacking fraudulent intent.
  3. Whether allegations of professional misconduct fall within the exclusive regulatory domain of the Bar Councils under the Advocates Act, 1961.

3. Legal Analysis and Ratio Decidendi

A. Expansion of Article 226 Maintainability Beyond Article 12

The Supreme Court held that the High Court took an overly narrow approach to its constitutional powers. Relying on precedents like Andi Mukta (1989), Zee Telefilms (2005), and S. Shobha (2025), the Court reiterated a shift in jurisprudence from the formal character of the respondent to a “functional test”.

Because the Caution List operates as an industry-wide adverse accreditation that limits a professional’s livelihood across all financial platforms, it carries a public law element and directly impacts the fundamental right to practice law under Article 19(1)(g).

B. The Legal Boundary: Fraud vs. Professional Negligence

The Court examined the regulatory source text, specifically the RBI Circular dated March 16, 2009, issued under Section 35A of the Banking Regulation Act, 1949. It noted that subsequent master directions (2016 and 2024) consistently isolate third-party professionals only when they collude or participate directly in fraudulent transactions.

The Bench noted that fraud requires mens rea—a deliberate intent to deceive. An incorrect legal opinion or an omission during due diligence, without dishonest or criminal intent, cannot be elevated to the status of fraud. While banks maintain a contractual right to drop an underperforming panel advocate, they do not possess the statutory power to publicly brand an advocate as fraudulent based on an error of professional judgment.

C. The Exclusivity of the Advocates Act, 1961

Invoking Bar of Indian Lawyers v. D.K. Gandhi (2024), the Court emphasized that the legal profession is sui generis (unique) and cannot be measured alongside commercial services. The independence of the Bar is an essential pillar of the rule of law and is protected by the principle of self-regulation.

Under Sections 35 and 36 of the Advocates Act, 1961, the legislature established a comprehensive statutory mechanism where peers regulate peers. The Court cited Supreme Court Bar Association v. Union of India (1998) and Bar Council of Maharashtra v. M.V. Dabholkar (1975) to rule that the power to judge professional conduct and impose penalties like blacklisting rests exclusively with the State Bar Councils and the BCI. External executive or financial entities are barred from operating parallel disciplinary systems.

4. Structural Directions and Institutional Reforms

While defending the autonomy of the Bar, the Supreme Court stressed that self-regulation demands a high standard of public accountability, ordering the following structural measures:

A. Disciplinary Performance Audit

Recognizing valid systemic concerns regarding delays and backlogs within the current disciplinary setup, the Court directed the BCI to establish an independent committee. This committee must feature a diverse group of stakeholders to conduct an objective performance audit of all State Bar Councils and the BCI itself. The audit must systematically evaluate:

  • Annual complaint intake and absolute disposal numbers.
  • Average and median disposal times alongside age-weighted pendency metrics.
  • Overall compliance parameters with statutory timelines, staffing limits, and transparency measures.

B. Continuing Legal Education (CLE) & National Legal Academy (NLA)

The Court highlighted a significant structural gap in post-enrolment professional training for lawyers. Drawing inspiration from international frameworks (such as the US MCLE and UK competency systems), the Court directed the BCI to build a framework for Continuing Legal Education (CLE) to ensure technological adaptability and updated ethical standards.

Furthermore, the BCI was directed to form a specialized team of junior and senior advocates, alongside academic institution experts, to develop a proposal for a full-time National Legal Academy (NLA) for lawyers, mirroring the operational structure of the National Judicial Academy for judges.

5. Final Order and Operational Directives

  • Appeal Allowed: The Supreme Court allowed the appeal and set aside the Allahabad High Court’s judgment.
  • Removal from Caution List: The Court declared the inclusion of the appellant’s name in the Caution List illegal and issued a consequential direction to Canara Bank and the IBA to remove his name with immediate effect.

2026 INSC 670

Ajay Vijh V. Indian Banks Association &Ors. (D.O.J. 07.07.2026)

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Supreme Court Acquits Appellant in the Absence of Corroborating Circumstances Beyond Last Seen Theory

August 5, 2026 No Comments

In this criminal appeal, the Supreme Court addressed whether a conviction for murder can be sustained solely on the basis of a weak “last seen” theory without any other corroborating incriminating circumstances. The appellant, who was the son-in-law of PW1, was convicted alongside other co-accused based on testimonies of witnesses including PWs 1 to 4, some of whom were initially declared hostile before turning to implicate the accused. Although the appellant had already been released on remission, he pursued the appeal seeking a clean acquittal. The Supreme Court allowed the appeal and set aside the conviction, holding that the testimonies regarding the last seen theory did not inspire confidence and that a conviction cannot rest merely on the last seen theory in the complete absence of other incriminating evidence.

  • Unreliable Testimony: The testimonies of witnesses (PW1 to PW4), some of whom were initially declared hostile before alleging assault by PW1’s husband and the appellant, failed to inspire judicial confidence.
  • Limitation of the Last Seen Theory: A conviction cannot be based solely on the last seen theory without any other supporting incriminating circumstances.
  • Acquittal Granted: The Supreme Court set aside the judgments of the lower courts and granted a clear acquittal to the appellant, directing the cancellation of any bonds executed for earlier remission releases.

2026 INSC 780

Munu Sen v. The State of Chhattisgarh (D.O.J. 29.07.2026)

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Proving Adultery at the Threshold: Supreme Court Rules on Interim Maintenance and Private Investigation Evidence

August 5, 2026 No Comments

In this criminal appeal, the Supreme Court examined whether a husband’s application under Section 125(4) of the Code of Criminal Procedure, 1973 (CrPC) alleging adultery by the wife can be deferred until the final adjudication of the main maintenance proceedings, or if it must be considered at the threshold when determining interim maintenance. The appellant-husband had opposed interim maintenance by presenting electronic evidence (photographs and videos) indicating an adulterous relationship, but the lower courts dismissed his application on the grounds that such allegations could only be proved during final trial. The Supreme Court allowed the appeal, set aside the High Court’s order, and remanded the matter to the Trial Court. The Court held that if a husband presents clear, cogent, and ex-facie evidence at the threshold establishing adultery, interim maintenance can be barred or suspended, and such applications cannot be routinely postponed to the final judgment. Additionally, the Supreme Court highlighted the legal lacuna surrounding unregulated private detective agencies and directed that a copy of the judgment be forwarded to the Ministry of Law and Justice and the Law Commission of India for appropriate legislative consideration.

  • Nature and Object of Section 125 CrPC: Proceedings under Section 125 CrPC are summary and civil in nature, designed to prevent vagrancy, destitution, and neglect by ensuring a dignified life for dependents through social justice.
  • Bar Under Section 125(4) CrPC: Section 125(4) acts as an exception, explicitly barring a wife from receiving maintenance (interim or final) if she is living in adultery, refuses to live with her husband without sufficient reason, or lives separately by mutual consent.
  • Timing of Section 125(4) Adjudication: An application under Section 125(4) does not have to wait until the final conclusion of the main petition. If the husband produces ex-facie, clear evidence establishing adultery or mutual consent at the threshold, interim maintenance is impacted; if evidence requires formal proof, interim maintenance continues in the interregnum until the Section 125(4) application is decided.
  • Evidentiary Standard for Electronic Records: Evidence procured through private investigators (such as digital photographs and videos) must satisfy strict admissibility and verification standards, including compliance with Section 65B of the Indian Evidence Act / Bharatiya Sakshya Adhiniyam (BSA) and the foundational tests of relevancy and accuracy.
  • Need for Regulation of Private Investigators: Acknowledging the absence of statutory regulation for private detective agencies in India, the Supreme Court directed the Ministry of Law and Justice and the Law Commission of India to examine the framework for regulating private investigators, balancing evidence collection with privacy and data protection rights.

2026 INSC 778

Himanshu Chordia v. State of Rajasthan & Anr. (D.O.J. 31.07.2026)

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Supreme Court Bars Late-Stage Counter-Claim Court Fee Deposit After Conclusion of Evidence

August 5, 2026 No Comments

In this civil appeal, the Supreme Court examined the legality of an order permitting a defendant to pay court fees on a counter-claim with a delay of four years, specifically after the entire evidence in the suit had been closed. When the written statement and counter-claim were initially filed, the defendant did not pay the required court fees due to financial constraints, and only the written statement was taken on record, leaving the counter-claim non-existent. Years later, after the plaintiff’s evidence and the cross-examination of PW1 concluded, the trial court permitted the defendant to deposit the court fees and prosecute the counter-claim. The Supreme Court allowed the appeal and set aside the orders of the High Court and Trial Court, holding that since the counter-claim was never formally on record and the trial had already concluded, introducing it at that belated stage violated the strict parameters of Order VI Rule 17 of the Civil Procedure Code, 1908 (CPC), as no due diligence or foundational grounds were established.

  • Non-Existence of Counter-Claim Without Court Fees/Taking on Record: Where a defendant fails to pay court fees upon raising a counter-claim and explicitly requests the court to take only the written statement on record due to lack of financial capacity, the counter-claim does not legally exist on record.
  • Limits of Section 149 CPC: While Section 149 CPC grants courts the discretionary authority to allow the payment of deficient court fees at any stage of the suit, it presupposes that the pleading or claim itself is validly and properly on record.
  • Application of Order VI Rule 17 CPC Post-Trial: Introducing a counter-claim after the conclusion of trial amounts to an amendment of the pleadings. Under the proviso to Order VI Rule 17 CPC, such amendments post-commencement of trial are barred unless the party proves that, despite due diligence, they could not have raised the matter earlier.
  • Prejudice to the Plaintiff: Permitting a counter-claim after the entire evidence is closed causes severe prejudice, as the plaintiff has had no opportunity to adduce evidence to controvert the new claims.
  • Final Direction of the Supreme Court: The Supreme Court allowed the appeal, set aside the High Court’s affirmation of the trial court’s order, and directed that the suit shall proceed and be adjudicated strictly without the counter-claim.

2026 INSC 777

IJM Corporation Berhad v. M/s Lakshmi Sai Constructions Company and Anr. (D.O.J. 28.07.2026)

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Navigating Discretionary Equity: Supreme Court Restores Trial Court Decree Denying Specific Performance

August 5, 2026 No Comments

In this civil appeal arising from a property transaction spanning over two decades, the Supreme Court examined the limits of appellate interference with the discretionary and equitable relief of specific performance under Section 20 of the Specific Relief Act, 1963. The sole appellant (original defendant) had entered into an agreement to sell a property in Udhagamandalam for ₹2,25,00,000, but the transaction collapsed amid allegations of bounced cheques, mutual lack of candor, inconsistent pleadings, and criminal complaints. While the trial court decreed only a refund of the advance amount of ₹85,00,000 with interest, the High Court reversed it and granted specific performance. The Supreme Court allowed the appeals, set aside the High Court’s judgment, and restored the trial court’s decree. It held that the plaintiffs failed to prove continuous readiness and willingness, approached the court with unclean hands due to retaliatory criminal proceedings, took contradictory stances regarding property assignment, and that the long passage of time combined with the advanced age of the appellant rendered specific performance inequitable.

  • Scope of Order XLI Rule 22 CPC: A respondent supporting a decree can impugn an adverse finding without filing cross-objections, provided they seek no relief beyond what the decree already grants.
  • Maintainability Without Declaration: Where an agreement does not confer a contractual right of unilateral termination, such termination amounts to repudiation, and the aggrieved party may sue for specific performance without seeking a separate declaratory relief as to the invalidity of the cancellation.
  • Continuous Readiness and Willingness: The plaintiff in a specific performance suit must prove continuous readiness and availability of funds from the date of the agreement up to the date of the decree. Dishonour of advance cheques and absence of concrete fund-raising material at the time of the suit demonstrate a lack of continuous financial readiness.
  • Conduct and “Clean Hands” Principle: Specific performance is an equitable and discretionary remedy. Plaintiffs who adopt contradictory stands across litigation (such as blowing hot and cold regarding assignment of rights) and file retaliatory criminal complaints seeking recovery of money rather than upholding the contract are not entitled to equitable relief.
  • Hardship and Delay: An inordinate lapse of time (over two decades), coupled with the advanced age of the vendor and the death of a key plaintiff, constitutes severe hardship and makes specific performance inequitable, warranting the restoration of the trial court’s alternative remedy of refund with interest.

2026 INSC 776

V.N.A.S. Chandran v. S. Venila and Others (D.O.J. 31.07.2026)

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