TaxTMI 
TaxTMI 
2026 (8) TMI 90
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....21 VII. Duty of BCI to undertake performance audit of its disciplinary jurisdiction to ensure accountability 29 VIII. Continuing Legal Education (CLE) for Lawyers: A Necessity for Strengthening Justice Delivery 35 IX. Conclusions 40 Judgment 1. Delay condoned. Leave granted. (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 o....
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....ial measures as may be found necessary. 2.5 Further, in order to maintain the highest standards of professional competence, legal knowledge, advocacy skills, and ethical conduct expected from members of this noble profession, we have directed the Bar Council of India to initiate and institutionalise the discipline and culture of Continuing Legal Education (CLE). We have also suggested that the Bar Council of India may consider establishing a National Legal Academy (NLA) for members, like how the National Judicial Academy (NJA) was established for Judges. There is both a need and a promise in a successful collaboration among these Academies. II. Factual Background. 3. The appellant, an advocate by profession, was enrolled in 1998 and had been on the panel of several banks and financial institutions for rendering legal advisory services. He claims to have been on the panel of the respondent Bank from September 2010, and to have continued to provide professional services. The dispute traces its origin to a communication dated 27.07.2018 issued by the regional manager of the Bank, in which it was alleged that a legal opinion furnished by the appellant on 08.08.2015 regarding c....
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....r commission are perceived to have exposed banks to fraud or financial risk. The object underlying the maintenance and dissemination of information through such a list is to enable banks to exercise due caution while engaging or dealing with such entities in future transactions. 7. It is the appellant's case that the adverse consequence of such inclusion in the Caution List was not merely confined to the respondent bank, but had a cascading effect on his professional engagements, resulting in termination of his empanelment with other banking institutions, seriously denting his honour and reputation. The appellant claims to have become aware of his inclusion in the Caution List only much later, as there was no intimation of such inclusion. Immediately upon learning the same, he filed a writ petition before the High Court challenging the said action. 8. The High Court, however, declined to entertain the writ petition, holding that a writ petition under Article 226 of the Constitution is not maintainable against the respondents and proceeded to dismiss the same without entering into the merits of the dispute. It is against this order that the present appeal is pressed on the fol....
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.... the Constitution depended primarily upon who the respondent was. The focus has gradually shifted from the formal character of the body against whom relief is sought to the nature of the function performed, the source of power exercised, and the effect of the impugned action on legally protected rights. (Kaushal Kishor v. State of U.P, (2023) 4 SCC 1. Held: "Once upon a time, the maintainability of a petition under Articles 32/226 depended upon "who the respondent was". Later, the focus shifted to "the nature of the duties/functions performed" by the respondent, for finding out his amenability to the jurisdiction under Article 226)." Article 226 is not confined merely to statutory authorities or instrumentalities of the State falling within Article 12. The expression "any person or authority" occurring in Article 226 has consistently received a wider and more liberal interpretation. 13. In Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust v. V.R. Rudani (1989) 2 SCC 691., this Court authoritatively held that the power under Article 226 extends even to bodies discharging public duties, irrespective of whether such duties arise from statute or ot....
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....emain amenable to judicial review under Article 226. 15. More recently, in S. Shobha v. Muthoot Finance Ltd. 2025 SCC OnLine SC 177. It was also observed: "8. A body, public or private, should not be categorized as "amenable" or "not amenable" to writ jurisdiction. The most important and vital consideration should be the "function" test as regards the maintainability of a writ application. If a public duty or public function is involved, any body, public or private, concerned or connection with that duty or function, and limited to that, would be subject to judicial scrutiny under the extraordinary writ jurisdiction of Article 226 of the Constitution of India.", this Court reiterated that where the action complained of possesses a public law character and materially affects legal rights, the remedy under Article 226 cannot be denied merely because the authority concerned is not "State" within Article 12. Relevant observations of this Court are as follows; "9. (7) If a private body is discharging a public function and the denial of any rights is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public bod....
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....e action of IBA in maintaining and operating such a Caution List possesses sufficient public law character to render it amenable to judicial review. The contrary view adopted by the High Court in the present case, solely on the basis that IBA may not strictly answer the description of "State" under Article 12, cannot therefore be sustained. This issue is answered by holding the writ petition is maintainable. V. Scope and object of Caution List as per RBI Guidelines: Re: Issue No. 2: Whether the inclusion of an advocate's name in the Caution List maintained by banks and financial institutions is merely an administrative measure confined to the contractual relationship between the bank and its panel advocate, or whether such inclusion has a bearing on legal and constitutional rights of the parties? 20. Having held that the writ petition was maintainable, we must now proceed to examine the true nature and legal effect of the impugned action which is whether the inclusion of an advocate's name in the Caution List maintained by the IBA is merely an internal administrative measure confined to the banking sector, or whether such inclusion travels beyond the realm of contractual and ....
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....her the measures contemplated in the circulars, when applied to advocates rendering professional services, amounts to disciplinary action based on their professional conduct. 23. The respondents have sought to justify the inclusion of the appellant's name in the Caution List by placing reliance upon the regulatory framework evolved by the RBI concerning the reporting of third-party entities involved in banking frauds. Reference in this regard has been made to the Circular dated 16.03.2009. It is necessary to refer to this Circular to examine whether it is confined to the detection of fraud or extends to matters concerning negligence or professional incompetence. Circular dated 16.03.2009 is as follows: "Circulation of the names of third parties involved in frauds As you are aware, Reserve Bank of India has been cautioning/alerting banks about unscrupulous borrowers who have defrauded banks. RBI has also been advising the banks to exercise due diligence while appraising the credit, needs of such borrower companies; partnership concerns, proprietorship concerns, directors, partners and proprietors, etc. as also their associates in case they approach any bank for ....
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....esult of pure negligence or even malafide actions. In return, the third parties could draw financial gains by way of disproportionate fees collected from the borrowers. Even after being instrumental in perpetration of frauds, these professionals continue to be on the panel of other banks and continue to provide or certify incorrect information/take documents and provide legal opinion on the properties etc. taken as security by the banks.... 5. It is therefore necessary that the banks build up internal database on such third parties in a systematic manner and resort to mutual exchange of those data on an ongoing basis. Banks mat, hereafter, report to Indian Banks Association (IBA) the details of such third parties, including professionals involved in frauds...." (emphasis supplied) It is evident from the above that the 2009 Circular deals only with fraud and has no bearing on professional advice of a lawyer. 24. Learned amicus as well as Mr. Rajesh Kumar Gautam, learned counsel for the Bank, have brought to our notice subsequent circulars issued by RBI being; (1) Reserve Bank of India (Frauds Classification and Reporting by Commercial Banks and Select FIs) Directio....
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....ll the banking institutions operates as a declaration about (in)competence, as well as the negative character of the advocate, having serious implications on his right to practice his profession. In the present case, a careful scrutiny of the record, particularly the communication dated 27.07.2018 issued by respondent no. 2, reveals that the allegation against the appellant is not one of fraud, collusion, or deliberate wrongdoing, but something relatable to negligence in rendering a title verification opinion. 27. Fraud, by its very nature, imports an element of mens rea and deliberate intention and design to defraud. An erroneous legal opinion or an omission in the course of due diligence, absent any allegation of dishonest intent or deliberate facilitation of illegality, cannot be elevated to the level of fraud. Had appellant been alleged to have committed fraud and subjected to criminal prosecution, entirely different considerations would arise. That, however, is not even the case with the respondents. Their stated object is to caution member banks regarding the alleged inefficiency or professional negligence of the appellant. 28. In our considered opinion, the circulars i....
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....is. Lawyers frequently operate in environments where control over outcomes is elusive and where professional obligations are regulated not merely by contractual duties, but also by ethical obligations towards the Court, the client, the opponent and the justice delivery system itself. The relevant portion of the judgment is as follows: "34. It is thus well recognised in a catena of decisions that the legal profession cannot be equated with any other traditional professions. It is not commercial in nature but is essentially a service oriented, noble profession. It cannot be gainsaid that the role of advocates is indispensable in the justice delivery system. An evolution of jurisprudence to keep our Constitution vibrant is possible only with the positive contribution of the advocates. The advocates are expected to be fearless and independent for protecting the rights of citizens, for upholding the Rule of Law and also for protecting the independence of judiciary. People repose immense faith in the judiciary, and the Bar being an integral part of the judicial system has been assigned a very crucial role for preserving the independence of the judiciary, and in turn the very dem....
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....dermine the independence of the Bar. 32. The Advocates Act, 1961, comprehensively deals with enrolment, right to practise, standards of professional conduct, disciplinary control and institutional supervision of advocates. The statutory scheme clearly evidences legislative intention to confer professional autonomy through self-regulation and also subjects it to structured disciplinary oversight through professional bodies, namely the State Bar Councils and the Bar Council of India. The Parliament has thus attempted to strike a balance between the independence of the profession with accountability. Chapter II of the Act deals with Bar Councils, namely the State Bar Councils and the Bar Council of India. Sections 35 and 36 vest disciplinary jurisdiction in the respective State Bar Councils and the Bar Council of India. The scheme of the Act contemplates a structured adjudicatory mechanism involving notice, framing of charges, recording of evidence and appellate remedies. The provision not only identifies the competent authority empowered to examine allegations against advocates, but also prescribes the procedure to be followed, including the issuance of a notice, an opportunity of....
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....sh an advocate by suspending his licence or by removal of his name from the roll of the State Bar Council for proven professional misconduct vests exclusively in the statutory authorities created under the Advocates Act, 1961, while the jurisdiction to punish him for committing contempt of court vests exclusively in the courts. 58. After the coming into force of the Advocates Act, 1961, exclusive power for punishing an advocate for "professional misconduct" has been conferred on the State Bar Council concerned and the Bar Council of India. That Act contains a detailed and complete mechanism for suspending or revoking the licence of an advocate for his "professional misconduct". Since the suspension or revocation of licence of an advocate has not only civil consequences but also penal consequences, the punishment being in the nature of penalty, the provisions have to be strictly construed. Punishment by way of suspending the licence of an advocate can only be imposed by the competent statutory body after the charge is established against the advocate in a manner prescribed by the Act and the Rules framed thereunder. 71. Thus, after the coming into force of the Advo....
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.... A most significant feature is that no litigant and no member of the public can straightaway commence disciplinary proceedings against an advocate. It is the Bar Council of a State which initiates the disciplinary proceedings." 35. Reverting to the facts of present case, the inclusion of the appellant's name in the Caution List, coupled with remarks imputing negligence and wrongful legal opinion, undeniably carried serious consequences, apart from affecting appellant's fundamental right to practice the profession. Such action effectively amounted to professional blacklisting, adversely affecting the appellant's standing and future professional engagements with other banks. 36. If the Bank is of the opinion that the appellant is guilty of professional negligence or misconduct in discharge of legal duties as an advocate, the appropriate remedy is to place the relevant material before the competent State Bar Council to take necessary action under the Advocates Act, 1961. Matters concerning the professional conduct of an advocate are within the exclusive province of the disciplinary authorities contemplated under the Advocates Act. The mechanism envisaged in the Caution List unde....
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....he responsibility of regulating the legal profession primarily to the State Bar Councils and the Bar Council of India. Among their most important statutory functions is the consideration and disposal of complaints relating to professional misconduct by advocates. Sections 35, 36, 36B and related provisions of the Act contemplate an institutional framework through which allegations of misconduct are investigated and adjudicated. 41. The statutory scheme recognises that professional discipline is an indispensable component of self-regulation. The authority conferred upon Bar Councils is accompanied by a corresponding duty to ensure that complaints are examined promptly, fairly and effectively. Delay in disciplinary proceedings undermines both accountability and fairness. It erodes public confidence in the profession, causes hardship to complainants, and leaves advocates facing unresolved allegations under prolonged uncertainty. 42. Over the years, concerns have repeatedly been expressed regarding pendency, procedural delays, lack of uniformity in practices across councils, limited availability of information regarding the progress and outcome of disciplinary proceedings. While ....
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....s in recognition of this obligation of the executive government that the constitutional courts have directed Governments to carry performance audit of statutes. 58. Four aspects for achieving justice are well founded and articulated as : (i) distribution of advantages and disadvantages of society, (ii) curbing the abuse of power and liberty, (iii) deciding disputes, and (iv) adapting to change. Adapting to change is important for achieving justice, as failure to adapt produces injustice and is, in a sense, an abuse of power. Thus, failure to use power to adapt to change is in its own way an abuse of power. In fact, the issue is not one of change or not to change, but of the direction and the speed of change and such a change may come in various ways, and most effectively through legislation. Legal reform through legislative correction improves the legal system and it would require assessment of the working of the law, its accessibility, utility and abuse as well. 59. The Executive branch has a constitutional duty to ensure that the purpose and object of a statute is accomplished while implementing it. It has the additional duty to closely monitor the working of a ....
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....untability. There is no reason why the disciplinary framework governing advocates should remain exempt from similar scrutiny. 50. In view of the above discussion and having regard to the importance of maintaining public confidence in the institution of lawyers, it is desirable that the Bar Council of India undertakes a comprehensive performance audit of the disciplinary mechanisms administered by it and the State Bar Councils under the Advocates Act, 1961. We direct the Bar Council of India to constitute a committee and seek an objective assessment of its duties of self-regulation of professional conduct and discipline, consider the report and file an affidavit of the action proposed/taken. VIII. Continuing Legal Education (CLE) for Lawyers: A Necessity for Strengthening Justice Delivery. 51. The maintenance of professional competence, ethical standards, and public confidence requires much more than laying down the rules and regulations for conduct and also consequences for misconduct of lawyers by laying down the procedures of enquiry, adjudication and determination by regulatory authorities. 52. In India, the statutory responsibility for maintaining standards of profe....
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....ter alia, promotion of continuing education in specialised fields of law, practical training for advocates and institutional mechanisms for raising standards of legal education and professional competence. The Advocates (Amendment) Bill, 2003, proposed amendments to Section 7 of the Advocates Act to specifically promote continuing legal education, specialised training and awareness regarding developments in law and legal education. Though the proposed statutory amendments did not ultimately materialise, the underlying concerns reflected therein continue to retain considerable significance. 56. Indian Lawyers can and must develop their own model, a pedagogy that is suitable for the profession and practice of law. Continuing Legal Education should not be viewed as a mere regulatory requirement, but as a professional commitment to excellence and service. Such programmes can also bridge the knowledge gap between urban and rural practitioners, ensuring that lawyers across the country have access to developments in law, technology, advocacy skills, and professional ethics. 57. An important objective of continuing education is in transmission of the profession's unwritten traditions....
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....ing, enhance professional competence, ethical awareness, technological adaptability, and long-term planning and corroboration. Bar Council of India must invest its time and energy in institutionalising this body. 60. There is no dearth of expertise, experience, vision and wisdom amongst members of the Bar. All that is required is to bring them together and enable the idea to take shape. We direct the Bar Council of India to constitute a team of senior and junior lawyers as well as experts in the field of establishing academic institutions for considering, discussing and evolving the idea of establishing National Legal Academy. We hope and trust the BCI will rise to the occasion and reflect on all these issues and inform the Court of its decision. List this appeal for further directions on 31.08.2026. IX. Conclusions. 61. For the reasons stated above, we allow the appeal, set aside the judgment and order passed by the High Court of Judicature at Allahabad. We declare that inclusion of appellant's name in Caution List is impermissible and without jurisdiction. There shall be a consequential direction to the respondents to remove the name of the appellant from the Caution Lis....