The Supreme Court on Tuesday held that the Indian Banks’ Association (IBA) has no authority to publicly declare that an advocate has acted improperly by including the lawyer’s name in a caution list circulated among banks and financial institutions, ruling that such declarations are “unsustainable in law” and encroach upon the exclusive disciplinary domain of the Bar Council.The Supreme Court said the IBA’s powers do not extend to assessing the professional competence or negligence of advocates.A bench of justices PS Narasimha and Alok Aradhe clarified that while banks and financial institutions remain free to discontinue the services of panel advocates, the IBA cannot assume the role of adjudicating allegations of professional misconduct by publicly blacklisting lawyers.“No public declaration regarding the conduct of an advocate can be made by the IBA, even as they are free to remove a lawyer from their service,” said Justice Narasimha while reading out the operative portion of the judgment.The court held that although the IBA can frame measures to safeguard the banking system against fraud and dishonesty, those powers do not extend to assessing the professional competence or negligence of advocates.“The IBA can take actions in matters of fraud, dishonesty and matters affecting the banking framework, but the power is not to address cases relating to professional judgment and negligence of lawyers,” it held.Declaring the practice illegal, the court ruled: “The caution list is therefore unsustainable in law.”The judgment arose from a petition filed by an advocate challenging the inclusion of his name in an IBA caution list dated February 5, 2020, which was circulated among banks and financial institutions where he was empanelled.The dispute originated from allegations made by the erstwhile Syndicate Bank, now Canara Bank, that the advocate, while issuing a search and title report for a property offered as security for a loan, failed to disclose that a portion of the property had already been sold. According to the bank, the omission resulted in an erroneous legal opinion that exposed it to financial risk and facilitated fraud by the borrower.The advocate challenged the caution listing, contending that the IBA had acted without issuing him prior notice, granting him a hearing, or following the Reserve Bank of India’s 2009 procedural guidelines governing reporting of third parties involved in bank frauds. He argued that the listing led several banks to terminate his empanelment, causing severe reputational and financial harm.The Allahabad High Court had declined to entertain his writ petition after the IBA questioned its maintainability, prompting the advocate to approach the Supreme Court.During the hearing, senior advocate Maninder Singh, appearing as amicus curiae, argued that the IBA’s action directly infringed an advocate’s fundamental right to practise the profession and that only the Bar Council of India and state bar councils possess statutory authority under the Advocates Act to inquire into allegations of professional misconduct. The Bar Council of India and the Union law ministry had supported this position.Beyond deciding the dispute, the Supreme Court also turned the spotlight on the functioning of the legal profession’s regulatory framework. Expressing concern over the effectiveness of disciplinary mechanisms under the Advocates Act, the bench directed the Bar Council of India to undertake a comprehensive review of its disciplinary system. “The Bar Council should conduct a performance audit of the effectiveness of its disciplinary mechanism,” the court directed.The bench suggested that the Bar Council establish a dedicated institution for continuing legal education on the lines of the National Judicial Academy. ‘The Bar Council may also consider setting up a National Legal Academy for its members like the National Judicial Academy,” it observed.It also directed the Bar Council of India to submit a report before the Supreme Court on the steps taken pursuant to the directions and suggestions contained in the judgment.