1 Judgment – W.P.1526/1995 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1526 OF 1995 LAWYERS COLLECTIVE, a Society registered under the Societies Registration Act and under the Bombay Public Trusts Act, having its office at 4th Floor, Jalaram Jyot, 63, Janmabhoomi Marg, Fort, Bombay – 400 001 (India) ......Petitioners V/s. 1. Bar Council of India, established under the provisions of the Advocates Act 1961, and having its office at 21 Rouse Avenue, Deendayal Upadhyaya Marg, New Delhi – 110 002/ 2. Bar Council of the State of Maharashtra and Goa having its Office at High Court Extension, Bombay – 400 032. 3. Bar Council of the State of Delhi, having its address at High Court Building, New Delhi – 110 003. 4. Bombay Incorporated Law Society, having its office at High Court New Building, North Wing, Bombay – 400 001. 5. Bar Association of the Supreme Court of India, having its office at Supreme Court 2 Judgment – W.P.1526/1995 of India, Tilak Marg, New Delhi – 110 001. 6. Bar Association of India, having its office at 93, Lawyers Chambers, Supreme Court of India, Tilak Marg, New Delhi – 110 001. 7. Union of India, 8. Reserve Bank of India, being a body constituted under the provisions of the Reserve Bank Act, 1934 having its principal office at Horniman Circle, Bombay – 400 023. 9. Directorate of Enforcement, Reserve Bank of India, having its office at Janmabhoomi Chambers, New Marine Lines, Bombay. 10. Central Board of Direct Taxes, Ministry of Finance, North Block, New Delhi. 11. Chief Commissioner of Income Tax, Aaykar Bhavan, New Marine Lines, Bombayز 12. White & Case, a firm of lawyers having its head office at 1155 Avenue of the Americans, New York, New York 10036, United States of America and with offices at the Nirmal Building, Nariman Point, Mumbai – 400 021. 13. Chadbourne & Parke, a law firm having its head office at Rockefeller Plaza, New York, New York 11012-0127, United States of America and with offices at Hotel Maurya Sheraton, new Delhi and/or at A-168, 3 Judgment – W.P.1526/1995 Anand Niketan, New Delhi – 110 021. 14. Ashurst Morris Crisp having its principal office at Broadwalla House, 5, Apollo Street, London EC 2A- 2HA and with offices at 6, Aurangazeb Road, D-202 Chanakyapuri, New Delhi – 110 011 India 15. Society of India Law Firms, S-454, Greater Kailash, Part – II, New Delhi 11- 048 ......Respondents. Mr.Chander Uday Singh, Senior Advocate with Mr.Anand Grover with Ms.Firdaus Moosa for the petitioner. Mr.A.G. Damle for Respondent No.2. Mr.P.A. Jani i/by Vigil Juris for Respondent No.4. Mr.S.U. Kamdar, Senior Advocate with Mr.Sandeep Mahadik i/by M/s.Bhasin & Co., for Respondent No.6. Mr.Rajinder Singh, Senior Advocate, Mr.Deobia, Senior Advocate, Mr.R.V. Desai, Senior Advocate, Mr.M.I. Sethna, Senior Advocate with Mr.A.M. Sethna and Mr.Vinod Joshi for respondent No.7,9, 10 and 11. Mr. A.Y. Sakhare, Senior Advocate with Mr. N.H. Munjjee & Mr.Rajesh Talekar i/by M/s.K. Ashar & Co. for respondent No.8. Mr. N.H. Seervai, senior Advocate with Mr. Firdosh Pooniwala i/by M/s. Little & Co. for respondent No.12. Mr.Shiraz Rustomji with Anil Agarwal for respondent No.13. Mr.I.M. Chagla and Mr.D.H. Khambata, Senior Advocates with Mr.Simil Purohit i/by M/s.Kanga & Co. for respondent No.14. Mr.S.N. Fadia i/by Mr.Naresh Fadia for Respondent No.15. Mr.Venkatesh Dhond with Mr.Prashant Beri i/by M/s.Beri & Co. for Applicants (Intervenors) 4 Judgment – W.P.1526/1995 CORAM : SWATANTER KUMAR, C.J. & J.P. DEVADHAR, J. Judgment reserved On : 4TH DECEMBER, 2009 Judgment delivered On : 16TH DECEMBER, 2009 ORAL JUDGMENT (Per J.P. Devadhar, J.) 1. Basically two questions are raised in this petition. They are, firstly, whether the permissions granted by the Reserve Bank of India to the respondent Nos.12 to 14 foreign law firms to establish their place of business in India (liaison office) under Section 29 of the Foreign Exchange Regulation Act, 1973 are legal and valid ? Secondly, assuming such permissions are valid, whether these foreign law firms could carry on their liaison activities in India only on being enrolled as advocates under the Advocates Act, 1961 ? To be specific, the question is, whether practising in non litigious matters amounts to ‘practising the profession of law’ under section 29 of the Advocates Act, 1961 ? 2. The Parliament has enacted the Advocates Act, 1961 (‘1961 Act’ for short) to regulate the persons practising the profession of law. To ensure the dignity and purity of the noble profession of law, the 1961 Act provides for establishment of the State Bar Councils and the Bar Council of India. The Bar Councils have been created at the State level as also at the Central level not only to protect the rights, interests and privileges of its members but also to protect the interest of the general public by ensuring them that the professionals rendering the legal services maintain high and noble traditions of the profession. 5 Judgment – W.P.1526/1995 3. A person can be said to be practising in litigious matters when he renders legal assistance by acting, appearing and pleading on behalf of another person before any Court or authority. Similarly, a person can be said to be practising in non litigious matters, when he represents to be an expert in the field of law and renders legal assistance to another person by drafting documents, advising clients, giving opinions, etc. There is no dispute that for a person to practise in litigious matters, he has to be enrolled as an advocate under the 1961 Act. However, the dispute is, where a person wants to practise in non litigious matters, whether, he should be enrolled as an advocate under the 1961 Act ? 4. This writ petition is filed by a society which is duly registered under the Societies Registration Act, 1860 as well as under the Bombay Public Trust Act, 1960. The members of the petitioner – society are Advocates enrolled on the rolls of various Bar Council in India and also law students. The petitioner has filed the present writ petition in public interest as according to them, the permission granted by the Reserve Bank of India (`RBI’ for short) to the foreign law firms, namely respondents No.12 to 14 to open liaison offices in India is totally illegal and in gross violation of the provisions of the 1961 Act. Since the petitioner is concerned with the practice of legal profession and particularly concerned in ensuring that the ethical practise prevail in the legal profession in India, the petitioner seeks declaration that the permission granted by RBI to the respondents No.12 to 14 is bad in law and that the respondents No.12 to 14 cannot be permitted to carry on their activities in India unless they are enrolled as advocates under the 1961 Act. 6 Judgment – W.P.1526/1995 5. Respondents No.12 to 14 who are the foreign law firms practising the profession of law in U.K. / U.S.A. and having branch offices in different parts of the world had applied to the RBI during the period 1993 to 1995 seeking permission to open their liaison offices in India. In the application filed by respondent No.12, it was stated that the activities to be carried on by the liaison offices were :- “A. To act as a coordination and communications channel between the White & Case head office and other White & Case offices and its clients in and outside India; B. To coordinate and liaise with the various Government agencies and bodies, including Reserve Bank of India; C. To act as a coordination and communication channel between offices of While & Case and Indian legal advisors assisting such offices or other clients; D. To collect information and data in respect of clients and prospective clients and furnish the same to the head office and other White & Case offices; E. To establish business contacts and act as a listening post between the head office and the Indian entities; F. To explore and promote the possibility of foreign investments and technical and financial collaborations in India with clients and prospective clients; G. To provide information regarding While & Case to clients and other interested parties; and H. To provide administrative, secretarial and other support services to visiting While & Case personnel.” Similar applications were also made by respondents No.13 and 14 to the RBI. 6. On processing the applications made by respondents No.12 to 7 Judgment – W.P.1526/1995 14, the RBI granted them permission to open their respective liaison offices in India, subject to the conditions set out therein. The conditions imposed by the RBI were :- “(i) Except the proposed liaison work, representative will not undertake any other activity of a trading commercial or industrial nature nor shall he enter into any business contracts in his own name without our prior permission. (ii) No commission fees will be charged or any other remuneration received / income earned by the representative for the liaison activities / services rendered by the representative or otherwise in India. (iii) The entire expenses of the representative office will be met exclusively out of the funds received from abroad through normal banking channels. (iv) The representative shall not borrow or lend any money from / to any person in India without our prior permission. (v) The representative shall not acquire, hold (otherwise than by way of lease for a period not exceeding five years) transfer or dispose of any immovable property in India without obtaining prior permission of the Reserve Bank of India under Section 31 of the Foreign Exchange Regulation Act, 1973. (vi) The representative will furnish to us (on a yearly basis) : (a) a certificate from the auditors to the effect that during the year no income was earned by/or accrued to the office in India. (b) details of remittances received from abroad duly support by bank certificates; (c) certified copy of the audited final accounts of the office in India; and (d) annual report of the work done by the office in India, stating therein the details of actual export or import, if any, effected during period in respect of which the office had rendered liaison services. (vii) The representative in India will not have signing / commitment powers except than those which are required for normal functioning of representative office 8 Judgment – W.P.1526/1995 on behalf of the Head Office.” 7. In the permission letter, it was, however, specifically stated that the permission granted to the respondents No.12 to 14 is limited for the purpose of Section 29 of the Foreign Exchange Regulation Act, 1973 (`1973 Act’ for short) and that the said permission should not be construed in any way regularizing, condoning or in any manner validating any irregularities, contraventions or other lapses if any under the provisions of any other law for the time-being in force. 8. Mr.C.U. Singh, learned Senior Advocate appearing on behalf of the petitioner submitted that the permission granted by RBI to respondents No.12 to 14 under Section 29 of the 1973 Act is bad in law, because, firstly, nationals of foreign states intending to practice any profession in India can be granted permission under Section 30 and not under Section 29 of the 1973 Act. Secondly, to carry on the profession of law even in non-litigious matters, enrollment as advocates under the 1961 Act was mandatory. Since the foreign law firms were not enrolled as advocates under the 1961 Act, the RBI could not have granted permission to the respondents No.12 to 14 to open their liaison offices in India under Section 29 of the 1973 Act. 9. Mr.Singh further submitted that the 1961 Act is a complete code for regulating the practice of law in India. He submitted that as per Section 24 read with Section 29 of the 1961 Act, any person intending to practise the profession of law must be enrolled as an advocate on any State Bar Council established under the 1961 Act. Since the expression `to 9 Judgment – W.P.1526/1995 practice the profession of law’ includes both practise in litigious matters as well as non-litigious mattes, Mr.Singh submitted that the foreign law firms namely respondents No.12 to 14 could not have carried on practise in non- litigious matters without being enrolled as advocates under the 1961 Act. 10. Mr.Singh further submitted that the right to practise the profession of law cannot be said to be confined to physical appearances in Courts / Tribunals / other authorities, but the right to practise the profession of law necessarily includes giving legal advise to a client, drafting and providing any other form of legal assistance. Mr.Singh submitted that the petitioner is not aversed to the foreign law firms practising the profession of law in India, however, the grievance of the petitioner is that the foreign law firms cannot be permitted to practise the profession of law even in non- litigious matters without being enrolled as advocates under the 1961 Act. 11. In support of his argument that the right to practise the profession of law includes both, practising in litigious matters as well as the practise in non-litigious matters, Mr.Singh relied upon various decisions, relevant portions of the said judgments are extracted herein below. 12. The Court of Appeals of New York in the matter of New York County Lawyers Association (Roel) reported in 3 N.Y. 2D 224, inter alia held thus :- “..........................Whether a person gives advice as to New York law, Federal law, the law of a sister State, or the law of a foreign country, he is giving legal advice. Likewise, when legal documents are prepared for a layman by a person in the 10 Judgment – W.P.1526/1995 business of preparing such documents, that person is practicing law whether the documents be prepared in conformity with law of New York or any other law. To hold otherwise would be to state that a member of the New York Bar only practices law when he deals with local law, a manifestly anomalous statement. .............................. As heretofore pointed out, the public is as liable to injury when an unlicensed person gives advice to an individual as to his legal rights under foreign law as it is with respect to his rights under domestic law. The State need not have separate examinations for those who will specialize in real estate law, patent law, mining law, foreign law, or any other law. There are many branches of the law that a Bar examination does not reach, but the test is a general one which all qualified applicants are required to take. And so all are equally subject to the same character qualifications. Thus it is not unreasonable to require that a person desiring to engage in the practice of foreign law be admitted to the Bar here and be subject to the same rules as every other member of the Bar of this State.” (emphasis supplied) 13. The Supreme Court of South Carolina in its opinion No.25757 reported in 2003 S.C. Lexis 293, inter alia held thus :- “Based on the foregoing analysis, we hold that when nonlawyer title abstractors examine public records and then render an opinion as to the content of those records, they are engaged in the unauthorized practice of law. But if a licensed attorney reviews the title abstractor’s report and vouches for its legal sufficiency by signing the report, title abstractors would not be engaged in the unauthorized practice of law.” (emphasis supplied) 14. In the case of Legal Practice Board V/s. Wilhelmus Van Der Zwaan reported in (2002) WASC 133, the Supreme Court of Western Australia, has held thus :- “The expression “administration of law” in s 77 is to be read as meaning “the practice of law” or “the practice of the law”. The practice of the law includes the giving of legal advice and counsel to others as to their rights and obligations under the law, and the preparation of legal instruments by which legal 11 Judgment – W.P.1526/1995 rights are either obtained, secured or given away, although such matters may not then, or ever, be the subject of proceedings in a court. If the giving of such advice and performance of such services affect important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the person giving such advise possess legal skill and a knowledge of the law greater than that possessed by the average citizen, then the giving of such advice and the performance of such services by one for another as a course of conduct, constitutes the practice of the law. Where an instrument is to be shaped from a mass of facts and conditions, the legal effect of which must be carefully determined by a mind trained in the existing laws in order to ensure a specific result and to guard against others, more than the knowledge of the layman is required. A charge for such service brings it within the term “practice of the law”.” (emphasis supplied) 0 15. The Apex Court in the case of Ex. Capt Harish Uppal V/s. Union of India reported in (2003) 2 Supreme Court Cases 45, has held thus :- “34. .................... The right of the advocate to practise envelopes a lot of acts to be performed by him in discharge of his professional duties. Apart from appearing in the courts he can be consulted by his clients, he can give his legal opinion whenever sought for, he can draft instruments, pleadings, affidavits or any other documents, he can participate in any conference involving legal discussions, he can work in any office or firm as a legal officer, he can appear for clients before an arbitrator or arbitrators etc. Such a rule would have nothing to do with all the acts done by an advocate during his practice. He may even file vakalat on behalf of a client even though his appearance inside the court is not permitted. Conduct in court is a matter concerning the court and hence the Bar Council cannot claim that what should happen inside the court could also be regulated by them in exercise of their disciplinary powers. The right to practise, no doubt, is the genus of which the right to appear and conduct cases in the court may be a specie. But the right to appear and conduct cases in the court is a matter on which the court must and does have major supervisory and controlling power. Hence, courts cannot be and are not divested of control or supervision of conduct in court merely because it may involve the right of an advocate. ................................” (emphasis supplied) 12 Judgment – W.P.1526/1995 16. In the case of Supreme Court Bar Association V/s. Union of India reported in (1998) 4 Supreme Court Cases 409, the Apex Court has held thus :- “58. After the coming into force of the Advocates Act, 1961, exclusive power for punishing an advocate for “professional misconduct” has been conferred on the State Bar Council concerned and the Bar Council of India. That act contains a detailed and complete mechanism for suspending or revoking the licence of an advocate for his “professional misconduct”. Since the suspension or revocation of licence of an advocate has not only civil consequences but also penal consequences, the punishment being in the nature of penalty, the provisions have to be strictly construed. Punishment by way of suspending the licence of an advocate can only be imposed by the competent statutory body after the charge is established against the advocate in a manner prescribed by the Act and the Rules framed thereunder. 71. Thus, after the coming force of the Advocates Act, 1961 with effect from 19-5-1961, matters connected with the enrolment of advocates as also their punishment for professional misconduct is governed by the provisions of that Act only. Since, the jurisdiction to grant licence to a law graduate to practise as an advocate vests exclusively in the Bar Council of the State concerned, the jurisdiction to suspend his licence for a specified term or to revoke it also vests in the same body.” (emphasis supplied) 17. In the case of Pravin C. Shah V/s. K.A. Mohd Ali reported in (2001) 8 Supreme Court Cases 650, the Apex Court has held thus :- “16. ..................... The right of the advocate to practise envelops a lot of acts to be performed by him in discharge of his professional duties. Apart from appearing in the courts he can be consulted by his clients, he can give his legal opinion whenever sought for, he can draft instruments, pleadings, affidavits or any other documents, he can participate in any conference involving legal discussions etc. ...................” (emphasis supplied) 13 Judgment – W.P.1526/1995 18. In the light of the aforesaid decisions, Mr.Singh submitted that the lawyers practising in litigious as well as non-litigious matters are governed by the 1961 Act and bound by the rules framed by the regulatory body, namely, the Bar Council of India. He submitted that the Bar Council is constituted with a view to keep check on the lawyers who render services to their clients in litigious as well as non-litigious matters. He submitted that no country in the world permits unregulated practise of law and, therefore, the permission granted by the RBI to the respondents No.12 to 14, under Section 29 of the 1973 Act to open a liaison office in India amounts to permitting the foreign law firms to open their branch offices in India and practise the profession of law without being enrolled as advocates under the 1961 Act. He submitted that in view of the permission granted by RBI, the foreign law firms, namely respondents No.12 to 14 have an unfair advantage over the advocates practising the profession of law in India, because, Indian advocates practising in non litigious matters are subjected to the provisions of the 1961 Act and the rules framed by the Bar Council, whereas, the foreign law firms like respondents No.12 to 14 are neither subjected to the 1961 Act nor the rules framed by the Bar Council. Accordingly, Mr.Singh submitted that the permission granted by RBI being in gross violation of the provisions contained in the 1973 Act as well as the 1961 Act, the said permission must be declared to be illegal and contrary to law. 19. Counsel for the Bar Council of India and Bar Council of Maharashtra & Goa have adopted the arguments advanced by the counsel 14 Judgment – W.P.1526/1995 for the petitioner. 20. Mr.Rajinder Singh, Senior Advocate appearing on behalf of the Union of India submitted that there is no proposal, as of now, to allow foreign lawyers to practice Indian law in Indian Courts. He submitted that the Government is still in the process of consulting all the stake holders and any decision on the issue will be taken after considering the views of all the stake holders. However, Counsel for the Union of India submitted that for drafting legal documents or giving opinion on aspects of foreign or international law, one need not be on the roll of the Bar Council. He further submitted that if the contention of the petitioner is accepted then, no bureaucrat will be able to draft or given opinion. He submitted that reading various provisions of the 1961 Act particularly Section 24, 29 and 45 of the 1961 Act, it becomes clear that the 1961 Act prescribes the mode and the manner of enrolling advocates who want to practice the profession of law before Courts, Tribunals and other authorities and provide for punitive action against advocates who have violated the provisions contained in the 1961 Act and the rules framed by the Bar Council. Counsel for the Union of India further submitted that the fact that the 1961 Act contains penal provisions in respect of persons illegally practicing in Courts and other authorities, and does not provide any penal provisions for the breaches committed by persons practicing in non-litigious matters clearly shows that persons