In-House Counsel not Entitled to Legal Privilege U/s 132 of BNS

 

Why in News? In a landmark judgment clarifying the scope of legal privilege under the Bhartiya Sakshya Adhiniyam, 2023 (BSA), the Supreme Court of India has held that in-house counsel are not entitled to the protection of privilege under Section 132 of the BSA, as they do not qualify as “Advocates practicing in Courts” within the meaning of the law.

The decision was rendered by a three-judge Bench comprising Chief Justice of India (CJI) B.R. Gavai, Justice K. Vinod Chandran, and Justice N.V. Anjaria, in a suo motu case arising from a reference made by a two-judge Bench during the hearing of a Special Leave Petition (SLP) related to a notice issued under Section 179 of the BSA.

Background of the Case:

• The issue arose in a suo motumatter after a summons was issued to an advocate under Section 179 of the Bhartiya Sakshya Adhiniyam, compelling disclosure of client-related communications.
• The Supreme Court took cognizance and examined whether in-house counsel and practicing advocates are equally entitled to privilege under the new BSA framework, which replaced the Indian Evidence Act, 1872.
• The Bench noted that a society titled General Counsels Association of India, comprising legal heads of major corporations, intervened, claiming that in-house counsel perform the same advisory functions as external advocatesand should thus receive identical legal privilege under Sections 132 and 134 of the BSA.
• However, the Court dismissed this argument, relying on Rule 49 of Chapter 2, Part VI of the Bar Council of India Rules, which prohibits advocates in full-time employment from practicing law in courts.

Supreme Court’s Observations:

• The Bench drew parallels with Section 126 of the Indian Evidence Act, 1872, which granted privilege to “barristers, attorneys, pleaders, or vakils.”Post-enactment of the Advocates Act, 1961, the term “Advocate” now refers specifically to those enrolled with the Bar Council and engaged in legal practice.

The Court clarified:

“The fact of their regular employment with full salaries takes them away from the definition of an Advocate as defined under the Advocates Act, 1961, which has been incorporated in Section 132 of the BSA.”

• Therefore, a full-time, salaried in-house counsel cannot claim the same legal privilegeas a practicing advocate for communications with their employer. However, they remain protected under Section 134, which safeguards communications made to a legal advisor by their employer.
• Setting aside the impugned summons, the Bench ruled that any summons to an advocate for documents relating to a client must be issued only for production before a court, not before investigating officers. The court alone must determine the admissibility and privilege of such communications under Section 132.

The judgment concluded:

“We find the summons issued in the instant case to be illegal and against the provisions of Section 132. The High Court, exercising jurisdiction under Section 528 of the BNSS, erred in refusing to interfere with the same.”

The Court cautioned investigating officers (IOs) to respect the limits of privilege and confidentiality accorded to advocates and disposed of the suo motu proceedings.

The Supreme Court’s conclusions were both clear and measured.

It held that:

• No investigating agency can summon a lawyer simply because they represented an accused or gave legal advice. Doing so is illegal and amounts to interference with justice.
• If there is specific evidence that a lawyer has crossed the line and participated in a crime, they can be summoned, but only with written approval from a senior officer (not below the rank of Superintendent of Police) and with clear reasons recorded.
• The privilege of client-lawyer communication is not the lawyer’s personal right; it belongs to the client and cannot be violated except in very limited circumstances.

Highlights of the Judgment

This ruling draws a clear distinction between practicing advocates and in-house counsel, reinforcing the professional boundaries set by the Advocates Act, 1961, and the Bar Council of India Rules.

Key highlights include:

• In-house counsel are not “Advocates”for Section 132 BSA.
• Privilege does not extendto communications between an employer and in-house counsel.
• Protection under Section 134applies only to communications made to the employer’s legal advisor.
• Investigating agenciescannot compel lawyers to disclose client communications without court oversight.