Raid on law firm linked to ‘bank-scam jeweller’ raises questions
CBI raid on offices of a Mumbai firm that previously advised Nirav Modi, the gem retailer at the center of the huge PNB fraud, has stirred concern on whether the lawyer-client privilege was violated
Officers from India’s top enforcement agency the Central Bureau of Investigation (CBI) raided the Mumbai offices of a law firm on Sunday that previously represented Nirav Modi, the founder of a jewelry house who is a key figure in an unprecedented $1.77 billion bank scam.
The raid on Cyril Amarchand Mangaldas (CAM), one of India’s leading law firms, has raised concerns about attorney-client privilege.
The law firm is said to have fully co-operated with the CBI and handed over documents related to banking transactions they were advising Modi’s company on.
The move stirred consternation because some senior lawyers and others believe the firm has been illegally hounded in total disregard of the protected attorney-client privilege.
The reason for such difference in opinion is the law on attorney-client privilege and protected communication has not been comprehensively articulated in India. The available caselaw is centered mostly on lawyers breaching their clients’ confidentiality by divulging information. There is also considerable dedate over how far a lawyer or legal firm can go to protect a client and his (or her) interests.
The CBI raid raised questions over what documents the firm handed over to investigators, and whether they did so voluntarily or were coerced. If the action was voluntary, CAM could have violated legal provisions – Sections 126-128 of the Indian Evidence Act, which prohibits the disclosure of confidential communication under attorney-client privilege. If the disclosure resulted from any overt or covert pressure, the CBI could have broken the law.
Sanjay Hegde, a senior advocate in the Supreme Court, said the CBI raid was not an unprecedented incident, as lawyers representing people accused of giant scams or frauds had been pursued by investigating agencies previously. So, it would be wrong to presume the CBI had abused its power at this stage.
Speaking to Asia Times on condition of anonymity, a partner from a top-tier law firm in Mumbai said if staff at Cyril Amarchand Mangaldas had disclosed information to the CBI without being asked to do so, they could face charges of committing an ethical violation. But it was up to the Bar Council, the body which governs the legal profession in India, to take a position on the matter, he said.
A ‘marquee client’
Another senior lawyer in Mumbai, not associated with Modi in any way, told LegallyIndia, that Nirav Modi would have been a “marquee client” for many top lawyers and law firms. Apart from CAM, firms such as DSK Legal and Luthra & Luthra have advised Nirav Modi on matters in the past, and if the CBI started targeting their offices too, it could be a tactic that discourages other lawyers and law firms from representing him, if they fear official retribution, harassment or loss of reputation.
There is also the question of whether law firms knew that Modi was about to commit crimes or fraud. Section 129 of India’s Evidence Act grants protected status to all communication exchanged confidentially between a client and his lawyer, and no one can compel the disclosure of such information, unless the lawyer volunteers to be a witness. It is not a blanket privilege, however. A proviso called the “crime-fraud exception” dictates that a client’s communication to his attorney is not privileged if conducted with the intention of committing or covering up a crime or fraud.
This applies only in a situation where the lawyer advised or assisted a wrongdoer before he committed the crime. It would not apply to cases where a lawyer takes up the case of a person being prosecuted for an offense and represents him in court.
A senior criminal lawyer, mostly practicing in the Supreme Court and Delhi High Court, told Asia Times that CAM advised Modi only on a banking transaction and did not advise or help him in any way to defraud the bank. The firm could not have known Modi’s intentions at the time it gave advice, so it would not be fair to pin any blame on it, he said. The CBI raid was an investigative procedure, not an adversarial move — where a court issues subpoenas to compel disclosure. So, it would be wrong to say the attorney-client privilege had been breached.
Cyril Amarchand Mangaldas has said it withdrew from Modi’s case, and stopped all dealings with him immediately after it learnt about the Punjab National Bank fraud on February 18. A spokesperson for the firm declined to comment or say anything about the documents handed over to the CBI, or if it faced any pressure from investigators to do that.