INDIA Law and Practice Contributed by: Vijayendra Pratap Singh, Asif Ahmed, Bhanu Jindal and Jitesh Lakra, AZB & Partners
whose statement is recorded under the PMLA, since the nature of proceedings conducted by the ED under the Act is that of “inquiry” and not investigation per se. However, such right will be available once a person is arrested for the offence of money laundering under the PMLA. Civil Proceedings In civil proceedings, the right against self-incrimi - nation does not apply in the same manner. Conse - quently, courts may draw adverse inferences where a party fails to produce evidence or refuses to testify in defence of their case, consistent with Section 119 of the BSA. 6.2 Undermining the Privilege Over Communications Exempt From Discovery In India, privilege from disclosing communications between a lawyer and their client is statutorily rec - ognised under Sections 132 (1), 132 (3) and 133 of the BSA, respectively, and under Section 227 of the Companies Act, protecting communication between a client and lawyer even after the relationship ends. However, privilege does not apply where: • communication is made in furtherance of any illegal purpose; or • any fact observed by any lawyer, in the course of their employment as such, shows that any crime or fraud has been committed since the commence - ment of their employment. Privilege may also be waived where a client expressly waives their privilege or adduces evidence and offers themselves as a witness, in which case they may be compelled to disclose any communication, which, in the opinion of the court, is necessary in order to explain any evidence they have led, and no other. This has to be read in the context of Section 133 of the BSA wherein, by merely volunteering to give evi - dence, such a privilege is not waived. The Section also contemplates that, if a party calls in their lawyer as a witness, they may be deemed to have consented to such disclosure only if they question their lawyer on fact, which otherwise would have been protected from disclosure under Section 132 (1) of the BSA.
Although Section 132 (1) of the BSA refers to “bar - rister, attorney, pleader or vakil”, the same distinction is not visible in the Advocates Act, 1961 (the “Advo - cates Act”), wherein only an “advocate” is permitted to practise the “profession of law” in India. While the Advocates Act does not make a distinction between different types of legal professionals, the intent of the legislature is clear and intended to use an inclusive definition. Further, the language in Section 134 of the BSA uses an even wider connotation of “legal pro - fessional adviser”, which has not been defined in the Advocates Act. However, it is to be noted that, under the Bar Council of India Rules (the “BCI Rules”), when a lawyer joins a company under full-time employment, they are under an obligation by such rules to surrender their registra - tion as an advocate. This conundrum creates a com - plexity in recognising privilege of communication with “in-house” legal counsels in India. There have been instances where the High Courts have considered the nature of advice or the scope of work of an in-house legal counsel to extend legal privilege to communications with in-house counsels or departmental lawyers engaged in government employment. However, some High Courts have taken the view that an in-house counsel cannot claim to be an “advocate” under the Advocates Act, and hence the legal privilege enshrined under the Evidence Act (now BSA) would not be available to such lawyers. In a recent significant ruling, the Supreme Court of India has held that compelling lawyers to disclose cli - ent communications undermines constitutional pro - tections, including the right to legal representation and the right against self-incrimination under Article 20 (3). The Court observed that summoning an advocate without proper basis reflects investigative overreach. The Court therefore laid down a two-fold test for the rare circumstances in which an advocate may be sum - moned: • explicit reasons must be stated in the summons explaining why the statutory exception applies, subject to judicial review; and
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