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Foreign law firms cannot practice in India


Hon’ble Adarsh Kumar Goel and Uday Umesh Lalit,JJ., have held that in the facts of the present case, the RBI was not justified in granting permission to the foreign law firms to open liaison offices in India under section 29 of the 1973 Act. We further hold that the expressions to practice the profession of law’ in section 29 of the 1961 Act is wide enough to cover the persons practicing in litigious matters as well as persons practicing in non-litigious matters and, there for, to practice in non-litigious matters in India, the respondent Nos. 12 to 14 were bound to follow the provisions contained in the 1961 Act. The petition is disposed of accordingly with no order as to costs.

The Madras High Court agreed with the above view as follows:

“44. As noticed above, the facts of the case before the Bombay High Court were that the respondents which were foreign law firms practicing the profession of law in US/UK sought permission to open their liaison office in India and render legal assistance to another person in all litigious and non-litigious matters. The Bombay High Court, therefore, rightly held that establishing liaison office in India by the foreign law firm and rendering liaisoning activities in all forms cannot be permitted since such activities are opposed to the provisions of the Advocates Act and Bar Council of India Rules. We do not differ from the view taken by the Bombay High Court on this aspect.”

The Madras High Court after above observation proceeded to consider the matter as follows:

“45. However, the issue which falls for consideration before this Court is as to whether a foreign law firm, without establishing any liaison office in India visiting India for the purpose of offering legal advice to their clients in India on foreign law, is prohibited under the provisions of the Advocates Act. In other words, the question here is, whether a foreign lawyer visiting India for a temporary period to advice his client on foreign law can be barred under the provisions of the Advocates Act. This issue was neither raised nor answered by the Bombay High Court in the aforesaid judgment.”

In view of above, the Court upheld the view of the Bombay High Court and Madras High Court in para 63 (i) of the judgment to the effect that foreign law firms/companies or foreign lawyers cannot practice profession of law in India either in the litigation or in non-litigation side. We, however, modify the direction of the Madras High court in para 63 (ii) that there was no bar for the foreign law firms or foreign lawyers to visit India for a temporary period on a “fly in and fly out” basis for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues. We hold that the expression “fly in and fly out” will only cover a casual visit not amounting to “practice”. In case of a dispute whether a foreign lawyer was limiting himself to “fly in and fly out” on casual basis for the purpose of giving legal advice to their clients in India regarding foreign law or their own system of law and on diverse international legal issues or whether in substance he was doing practice which is prohibited can be determined by the Bar Council of India. However, the Bar Council of India or Union of India will be at liberty to make appropriate Rules in this regard including extending Code of Ethics being applicable even to such cases.

Court also modified the direction in Para 63 (iii) that foreign lawyers cannot be debarred from coming to India to conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration. We hold that there is no absolute right of the foreign lawyer to conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration. If the Rules of Institutional Arbitration apply or the matter is covered by the provisions of the Arbitration proceedings arising out of international commercial arbitration in view of sections 32 and 33 of the Advocates Act. However, they will be governed by code of conduct applicable to the legal profession in India. Bar Council of India or the Union of India are at liberty to frame rules in this regard.

Court also modified the direction of the Madras High Court in Para 63 (iv) that the B.P.O. Companies providing wide range of customized and integrated services and functions to its customers like word processing, secretarial support, transcription services, proof reading services, travel desk support services, etc. do not come within the purview of the Advocates Act, 1961 or the Bar Council of India Rules. We hold that mere label of such services cannot be treated as conclusive. If in pith and substance the service amount to practice of law, the provisions of the Advocates Act will apply and foreign law firms or foreign lawyers will not be allowed to do so.
Bar Council of India v. A.K. Balaji, 2018 (184) AIC 1 SC


BUILDERS CAN RECOVER CONSIDERaTIONS PAID TO LAND HOLDERS


Hon’ble A.K. Goel and U.U. Lalit, JJ., have held that on one hand, the real and substantial relief to be granted in the matter would be not just restoring the status ante and invalidating of the transactions but the relief ought to be that the process of acquisition is taken to its logical end and the objective that said acquisition was to achieve must be sub-served. On the other hand, even while passing appropriate directions in the nature that there was a deemed Award, the interest of those land-holders who had not parted with their holdings and had faced the acquisition and had not participated in the proceedings ought to be secured. Further, the interest of purchasers of individual apartments is also required to be protected. It is axiomatic that wherever a superior Court finds that the exercise of power by the executive was mala fide or that there was fraud of power, the full and substantial relief must be granted.

All transactions entered into during the period from 24.08.2007 till 29.01.2010, pursuant to which the original landholders transferred their holdings in favour of builders/private entities or third parties shall be subject to and the interest of the respective parties shall be governed by the directions issued hereafter.

Consistent with directions issued in Para 33 of Uddar Gagan (suora), the builders/private entities will not be entitled to recover the consideration paid by them to the land-holders. The sale consideration paid by the builders/private entities to the landholders shall be treated towards compensation under the award and the landholders will not be required to refund any amount to such builders/private entities. The landholders will be at liberty to prefer Reference under section 18 of the Act within a period of three months from today. For the purposes of maintaining such Reference the reasoning that weighed while passing Awards dated 09.03.2006 and 24.02.2007 shall be the basis. If the Reference Court were to enhance the compensation, the amounts received by the landholders by way of consideration from the builders/private entities shall be appropriated towards such sum awarded by the Reference Court. If the landholders are still entitled to something more than what they had received from the builders/private entities, the differential sum shall be made over to them by the State of Haryana towards acquisition of their interest in the lands in question, if however, what the landholders had received towards consideration from the builders/private entities is found to be in excess of what is awarded by the Reference Court, the remainder shall not be recovered from them.

Consistent with the directions issued by this Court in Paragraphs 33.6 and 33.7 in Uddar Gagan (supra), the builders/private entities will be entitiled to refund/reimbursement of any payment made to the landholders or the amounts that had been spent on development of the land, such payments shall be made by HUDA or HSIDC on being satisfied about the extent of actual expenditure not exceeding HUDA or HSIDC norms on the subject as the case may be. Refund will however be in respect of amount at which the landholders old the land and not of subsequent sales. As regards subsequent transactions, the subsequent purchasers will have remedies against their respective vendors. Claims of builders/private entities entitled to refund will be taken up after settling claims of third parties from whom the builders/private entities had collected monies. No interests will be payable on such amounts.
Rameshwar v. State of Haryana 2018 (184) AIC 37 SC

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