Daijiworld Media Network - Mumbai

Mumbai, Jun 20: In a significant move to uphold legal ethics and statutory protections, the Enforcement Directorate (ED) has issued a new directive barring the summoning of advocates under Section 132 of the Bhartiya Sakshya Adhiniyam (BSA), 2023, except in rare, legally defined circumstances.

The circular, sent to all ED field offices, makes it clear that no advocate can be compelled to disclose privileged communication with clients unless specific exceptions outlined in the law apply. Even in such cases, summons can only be issued after prior approval from the Director of Enforcement.

The directive comes days after controversy erupted over the ED summoning Senior Advocate and Supreme Court lawyer Pratap Venugopal in connection with an ongoing probe into alleged irregularities in the issuance of Employee Stock Ownership Plans (ESOPs) by Care Health Insurance Ltd (CHIL). Venugopal, who serves as an Independent Director on CHIL’s board, was summoned by the ED’s Mumbai Zonal Office—a move that sparked concerns over breach of legal privilege.

Following backlash from the legal community and scrutiny over the legality of the summons, the ED withdrew the notice and clarified that any required documents from Venugopal would be sought via email in his capacity as a board member, not as a legal advisor.

Section 132 of the BSA safeguards the confidentiality of communications between lawyers and their clients. The ED’s latest directive is seen as a course correction aimed at avoiding similar violations and reinforcing the sanctity of legal counsel.

The ESOP-related probe into CHIL continues, with the Insurance Regulatory and Development Authority of India (IRDAI) having already imposed a Rs 1 cr penalty on the company and ordered the revocation of unallotted shares after rejecting the issuance proposal.

The ED’s circular is being viewed as a positive step in striking a balance between effective investigation and respect for legal safeguards.