Law firm in tainted land deal: Supreme Court refuses to stay police summons but protects lawyer from arrest

The Supreme Court on Tuesday refused to interfere with Madras High Court orders against a law firm accused of receiving nearly ₹7 crore through its bank account from sale proceeds for an allegedly fraud-tainted land deal [Legal Attorneys and Barristers v. Phoenix ARC]..A Bench of Chief Justice of India Surya Kant and Justice V Mohana refused to quash police summons issued to the firm, but granted a two-week protection from any coercive action against a lawyer associated with the firm. The Court has granted this limited protection to Hussain Mueen Farooq, a representative of the law firm, Legal Attorneys and Barristers..The case is tied to the sale of some land belonging to a charitable trust to Chennai Metro Rail Limited (CMRL). The land deal was later suspected to be tainted by fraud and alleged to be an attempt to defeat a charge created on the said land by an asset reconstruction company, Phoenix ARC Limited.Earlier this year, Phoenix ARC filed a contempt of court case in the matter before the Madras High Court. It alleged a wilful and deliberate disobedience of the High Court’s earlier orders in the matter. In its earlier orders, the High Court had found that the land transaction was part of a fraudulent scheme to defeat Phoenix ARC’s secured debt.In the contempt case, a Division Bench of the High Court noted that ₹13.18 crore of the sale consideration was credited to the Samarpana Charitable Trust’s account. However, the Court later found that ₹6.81 crore of this amount was withdrawn and had flown to the account of The Legal Attorneys and Barristers. In view of this, the High Court on June 3 impleaded the law firm as a party to Phoenix's contempt case.On June 5, the Court also ordered a freeze on the bank account through which the ₹6.81 crore payment was received, apart from two other accounts belonging to the charitable trust.The Central Crime Branch was also directed to investigate the flow of funds to the law firm. This was challenged by the law firm before the Supreme Court. .The law firm's counsel argued that the money received by it was towards professional work done for the charitable trust across multiple proceedings. The firm had represented the trust in 69 cases and had 627 appearances, the counsel argued.The Supreme Court, however, said that this explanation can be placed before the Madras High Court.“Go and explain this thing to the High Court. High Court has merely issued a notice to you (in the contempt of court case),” the Court said..The firm then raised concerns about a police summons issued to them. It argued that attorney-client privilege protects information that the police may seek. The Court, however, asked why the law firm could not appear before the police. The Bench said that the firm could still maintain the confidentiality of its professional relationship with its client (trust) and decline to disclose privileged material..The top court also briefly commented on the allegations against the law firm. It noted that the High Court had already found the underlying land transaction to be fraudulent and that a substantial part of the sale proceeds had gone into various accounts, including that of the law firm.“In fact, your conduct is under scanner before the High Court. There are very doubtful transactions, ₹7 crore almost you have taken,” the Court remarked..The Court said that while it was not inclined to interfere with the High Court orders, it would grant limited protection to the law firm's representative.“We do not find any ground to interfere with the orders passed by the High Court, orders dated 3rd June 2026 and 5th June 2026 passed by the Division Bench of the High Court,” the Court ordered.The Court has granted liberty to the law firm to appear before the High Court and submit its explanation in the contempt of court proceedings.As regards the police summons, the Court directed that if Farooq appears before the police authority and submits his explanation, no coercive action shall be taken against him for two weeks..The law firm was represented by Senior Advocate Meenakshi Arora.