The Supreme Court on Thursday called for the record of a review petition challenging its earlier judgment on attorney-client privilege, particularly the scope of protection available to communications involving in-house counsel and legal advisers, in the suo motu proceedings concerning the summoning of advocates who provide legal opinions or represent parties during investigations. The matter was heard by Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice V Mohana.
Senior Advocate Mukul Rohatgi, appearing in the matter, submitted that the judgment does not sufficiently discuss Section 134, except in its operative portion, and highlighted the practical difficulties arising from its interpretation for in-house counsel.
Justice Joymalya Bagchi, however, orally remarked that “What we will appreciate is that an in-house council has an employer-employee relationship and not an agent relationship of a professional contract.”
The Bench then examined the distinction between communications made by an in-house counsel and those involving an external legal adviser. Justice Bagchi observed that the judgment provides protection under Section 134 for communications made to the legal adviser of the employer, while such protection cannot be claimed for communications between the employer and its in-house counsel.
He illustrated the issue through a tax-related example, that a discussion between a company and its in-house counsel about parking money in an account to avoid tax would not be protected. However, if the company thereafter approached an external lawyer who advised that the arrangement amounted to tax avoidance rather than tax planning, that communication would be protected.
Mr Rohatgi submitted that the judgment does not address lawyers who advise companies independently without being employed as in-house counsel. Rohatgi further informed the Court that the General Counsel’s Association has filed a review petition against the main judgment and requested that its record be called for. The Court thereafter called for the record.