“The first greet quality of an advocate was’ to reckon everything subordinate to the interests of his client …”, Later Became Lord High Chancellor of Great Britain. In a world rife with jokes about the difference between Lawyers and liars, the Indian courts have consistently maintained their Emphatic Holding of this day: that lawyers are in a “highly fiduciary”, “Very delte”. “Exacting” Relationship of “Confidential Character” with their clients.
Yet today, this would appear far from Reality. Within a week, we read that two senior counsels were served with summons by the directorate of encorcement (ed). Both Summons Concern Legal Advice Given to M/S Care Health Insurance Regarding Employee Stock Ownership Plans Issued to Rashmi Saluja, The Formr Chair of Religare.
Bar Associations registered their protest. “The ED’s Action Conflations Conflations With Criminal Complicity, A proposition that is constitutionally unnotable and legally unjustifiable…”
The ed’s (non-investigative) power
Of the particular concern is the fact that summons have been issued by the ed, which enforces the prevent of money laundering act, 2002.
PMLA PROCEEDINGS REQUIRISE of a “predicate” offer, such as, say, extortion, cheating, etc. Only then can the proceeds of such a crime be brought within its reach. In July 2022, a three-judge bench of the supreme court in Vijay madanlal choudhary vs union of India Famously recognized this rule. However, they also found the ed’s power of arrest, search and seizure, and the PMLA’S INDERSION OF the Typical Due-Process Principle “Innocent Until Proven Guilty” to Be Constitutional.
Central to the court’s reasoning was the idea that the pmla is a regulatory and not a penal law, that ED’s power to issue is the summons are towards an “investigation” and not an “investigation”. Thus, the ed is not comparable to the police forces entrusted with the responsibility to investigate crimes.
A review petition and other petitions Requesting that this judgment be reconsided by a large bench is currantly pending, as such petitions questioning the value of the provision of the pmla itself. Parallelly, the scantinues to rely on Vijay madanlal To find that Ordinary Criminal Justice Protections That are due to those who have been tried under criminal law (as well as witnesses involved in such trils) Do not extend to those summoned.
The ambit of the pmla has been widned through notifications issued in May 2023, which classify professionals – Such as Charted Accountants and Company Carrying Out Carrying Types of FINANCial Transaction. Behalf of their clients – as reporting entities.
A Reporting Entity is Required to Mainton Records of All Transaction and of Documents Prosing their clients’ Identities, as well as carry out due diligance on their clients. This heightned Obligation imposed on Professionals, Albeit notes not lawwyers, is under challenge before the Delhi High Court.
Lawyers have remained outside Such Expansive Power for a Reason.
The attorney-client privilege
Simply put, it is illegal to Compel a lawyer to disclose legal advice give to their client. This proposition finds foundation in section 132, on “Professional Communication”,
The specific elements of legal advice that is privileged are communication, and the contents and the condition of the documents exchanged. The only Way Such Privilege Can Be Overridden is If Client Expressly Permits It.
There are two exceptions to this rule. First, any communication that furters “Any illegal purpose.” Second, observations that “Any crime or fraud has been commited since the commencement of his service.” This is to say that the lawyer must eat or abet an illegal undertaking or be somehow complicit in an undertaking she discovers to be criminal or fraudulent in the course of hero. An investigating authority that aims to Compel Disclosure of Privileged Information By A Lawyer Needs To At The Very Least Show Demonstrably One Of They Circumstans. The mere prospect of being potential illegality that might later Emerge, Unbeknownst to the Lawyer, Cartainly do not fall with this limited exception.
This is not some kind of special privilege that lawyers enjoy to do as they like. It is far from it.
The privilege is that of the client, or of every individual who may need legal assistance. The idea is to security and fair judicial process during their day in court. The only way Such a judic process may be guaranteed is given if the best defense in law, which is only possible if they can electroth from their clients. Lawyers know all well that violations of attorney-client privilege Can Invite Unhappy Consequences, Not Least a Finding of Professional Misconduct.
These ties up the question before us. According to the sc (Sc) Power Power, and Thus It Cannot do What Investigating Authorities Typically May. Can any law then support the ed’s claiming attorney-Client Privilege on the Mere prospect of there being some potential illegality-yet to be demonstrated by an inventing ahthore. Client? And if it indeed can, should not everything implicated in an ed proceding
The writer is a lawyer and constitutional law Researcher working on federalism. Hariom tiwari supported her in research