The Supreme Court of India, in a judgment delivered on October 31, 2025, has explained that full-time salaried “In-house counsel” of a corporate entity are not “Advocates” for the purpose of claiming advocate-client privilege under Section 132 of the Bhartiya Sakshya Adhiniyam, 2023 (BSA).
A three-judge bench comprising Chief Justice B. R. Gavai, Justice K. Vinod Chandran, and Justice N.V. Anjaria held that the “fact of their regular employment with full salaries takes them away from the definition of an Advocate.” The Court reasoned that an in-house lawyer’s “economic dependence” and “close ties with his employer” means they do not possess the “professional independence” comparable to that of an external lawyer, which is a prerequisite for the privilege.
The explanation came while the Court was deciding an ancillary issue in Suo Motu Writ Petition (Crl.) No. 2 of 2025, a case primarily concerning the power of investigating agencies to summon advocates. The judgment was authored by Justice K. Vinod Chandran.
The Intervention by General Counsels
The question arose from an intervention application filed by the General Counsels Association of India. The Association argued that its members, who are General Counsels and Legal Advisors for various companies, should be covered by the privilege.
- The Association contended that although BCI Rules restrict them from pleading in courts, they perform all other duties of legal advisors and should be protected under Sections 132 and 134 of the BSA.
- At first blush, the Court noted, “the contention seems attractive.”
The Supreme Court’s Explanation
The Court, however, rejected the Association’s contention, providing a detailed explanation for why in-house counsel are in a “fundamentally different position” from external advocates.
1. The Definition of ‘Advocate’ The Court’s analysis began with the statutory text. It observed that while the old Section 126 of the Evidence Act, 1872, referred to “barrister, attorney, pleader or vakil,” the new Section 132 of the BSA uses only the term “Advocate.”
The Court explained that “Advocate” is defined by the Advocates Act, 1961. Section 2(a) of that Act defines an “Advocate” as one entered on the rolls, and Section 29 states that advocates are the “only one class of persons entitled to practise law.”
2. The Bar on Employment (BCI Rule 49) The Court emphasized that this right to practice is regulated by the Bar Council of India Rules. It cited Rule 49 (‘Standards of Professional Conduct and Etiquette’), which mandates that a person on the rolls of the Bar Council who takes up “regular employment” as a “full-time salaried employee” must intimate the Bar Council and “shall thereupon cease to practise as an advocate so long as he continues in such employment.”
Citing its own Constitution Bench decision in Rejanish K.V. v. K. Deepa (2025 SCC OnLine SC 2196), the Court affirmed: “As of now, an employee cannot get enrolled in the rolls of the State Bar Council without giving up his employment.”
3. The Lack of ‘Professional Independence’ The Court’s explanation centered on the concept of “independence.” It expressed “respectful agreement” with the reasoning of the European Court of Justice (Grand Chamber) in Akzo Noble Limited v. European Commission.
- The Supreme Court adopted the Akzo Noble finding that legal privilege is subject to “two cumulative conditions”: the communication must relate to the client’s defence, and it “must emanate from independent lawyers, that is to say, lawyers who are not bound to the client by a relationship of employment.”
- The judgment explained that an in-house lawyer “does not enjoy the same degree of independence of his employer as a lawyer working in an external law firm does in relation to his client.”
- The Court stated that an in-house lawyer’s “economic dependence” and “close ties with his employer” means “he does not enjoy a level of professional independence comparable to that of an external lawyer.”
- This employment relationship, the Court found, “by its very nature, does not allow him to ignore the commercial strategies pursued by his employer, and thereby affects his ability to exercise professional independence.”
The Final Decision
Based on this explanation, the Supreme Court issued a final, binding direction on the matter:
- Direction 4: “In-house counsel will not be entitled to the privilege under Section 132 since they are not Advocates practicing in Courts as spoken of in the BSA.”
The Court did, however, provide a separate protection. It clarified in Direction 4.1 that in-house counsel are entitled to protection under Section 134 of the BSA. This section protects a client’s “confidential communication with his legal adviser.”
The Court explained this means that “communications between the employer and the In-house counsel” are not privileged, but communications made by the in-house counsel (acting on behalf of the employer) to an external legal advisor would be protected.
