Delhi High Court questions BCI Rules levying major penalties on foreign law firms

The Delhi High Court on Thursday questioned the newly amended Bar Council of India (BCI) Rules that lay down “drastic penalties” such as suspending the registration of foreign law firms based solely on a preliminary inquiry [Avimukt Dar and Ors v. Bar Council of India and Anr]. .A Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela expressed a prima facie opinion that either the BCI would have to amend the provisions or the Court would read them down. “Kisne banaya ye Rule? (Who made this Rule)...What kind of Rules are they? We expect you to do something about it. Prima facie, you are imposing a major penalty. Either they [BCI] need to change it or we will read it down,” the Court remarked. .The Bench specifically called into question Rule 10 of the Bar Council of India Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022. It provides for disciplinary action against foreign law firms for professional misconduct or for violating the Rules.It noted that the Rules only provide for a preliminary inquiry, unlike the usual practice of a preliminary probe followed by a detailed investigation. “Prima facie, it is beyond comprehension that in case the purpose of conducting the preliminary inquiry is to assess the merits of the allegations alone, then without any further inquiry, how a penalty like suspension of registration can be imposed. In case the Rules envisage only one inquiry which is termed as preliminary inquiry in that eventuality, the foreign lawyer of a foreign firm needs to be given an opportunity of hearing and producing evidence and responding to the allegations. Such opportunity would necessarily include providing documents based on which the inquiry has been initiated,” the Court said in its order. .The Court made these observations while hearing a plea filed by IndusLaw and four lawyers belonging to the firm seeking directions to the BCI to provide them with details based on which the Council issued a notice to the firm.The BCI had issued a show-cause notice to IndusLaw and Dentons Link Legal in August in relation to the alleged unauthorised collaborations or combinations between Indian and foreign law firms in violation of the BCI Rules. The Council asked them to reply to the notice and provide a set of documents. .Senior Advocate Amit Sibal appeared for the law firm today and argued that the BCI notice refers to certain statements allegedly made by the firm. However, no such statement has ever been made by its office bearers, Sibal said. He argued that his clients replied to the BCI notice and asked for details about the basis on which proceedings have been initiated against them; however, the BCI has not provided them with anything, it was claimed. Sibal added that earlier this month, the BCI issued a notice to his clients, requiring their personal appearance before the bar body on November 16.While questioning the BCI Rules, the senior counsel also expressed an apprehension over the fact that the Rules regarding the regulation of foreign law firms may not have the approval of the Chief Justice of India (CJI) and the Central government, as mandated by law. .After considering the case, the Court said that the principles of natural justice warrant that if these proceedings are the only inquiry, the firm must be provided with the material relied upon by the BCI. Ultimately, the Bench granted the BCI counsel time to obtain instructions. The Court also asked the counsel to inform it whether the Rules have been promulgated with the approval of CJI and the Central government.Further, the Court directed BCI to defer its proceedings against the firm, initially scheduled for November 16. Meanwhile, the Court also ordered the petitioners to provide BCI with the documents sought by the Council in its August notice. The case will be heard next week. .Advocates Saket Sikri, Raghavv Sabharwal, Harsh Vardhan Singh, Ajay Pal Singh Khullar and Ayush Srivastava also appeared for the petitioners. .Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.