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SILF vs Audit firms: SILF alleges “unauthorised practice of law” by Big 4; BCD issues notice

SILF vs Audit firms: SILF alleges “unauthorised practice of law” by Big 4; BCD issues notice

Pallavi Saluja

A new fight is brewing between the Society of Indian Law Firms (SILF) and multinational audit firms.

SILF has filed complaints (copies of which are with Bar & Bench) against the ‘Big four’ audit firms for engaging in the unauthorised practice of the profession of law.

The Bar Council of Delhi (BCD) issued notice to PWC, E&Y, Deloitte and KPMG, seeking replies on or before August 7. The BCD has also directed the firms’ representatives to be present in person on August 7, failing which ex-parte orders will be passed, as first reported by ET.

SILF, through its President Lalit Bhasin, has alleged that these firms are engaging in both litigious and non-litigious practice of law and are in clear violation of the Advocates Act, 1961 (the Act) by engaging in unauthorised practice of law.

The complaint alleges that the accounting firms are advising clients on FDI policy, exchange control regulations, corporate laws, competition law and industry sectoral regulations. SILF has also alleged that the firms are involved in preparing cases and representing clients before appellate authorities and are also involved in providing legal, contractual and regulatory services.

According to the complaint,

“…the firms by engaging in the unauthorised practise of the profession, have acted in violation of Sections 29 of the Act and are, therefore, liable to be punished with 6 months imprisonment for unauthorised practise of the profession of law liable under Section 45 of the Act.”

In the complaint, it is argued that under the Advocates Act, there is only one class of persons entitled to practice the profession of law – Advocates who are enrolled in the rolls of the State Bar Councils.

The complaint also refers to the Madras High Court decision in AK Balaji case, where the court had expressed concern that many accountancy and management firms are employing law graduates and are rendering legal services contrary to the provisions of the Act.

SILF has also relied on the Supreme Court’s Madras Bar Association decision, in which it was held that Chartered Accountants and Company Secretaries would, at best, be specialists in understanding and explaining issues pertaining to accounts. In effect, the judgment struck down the provision allowing Company Secretaries and Chartered Accountants to appear on behalf of a party before the National Tax Tribunal.

This is the first time SILF (or anybody for that matter) has initiated a complaint against the accounting firms. Interestingly, this complaint comes at a time when the Government is considering the option of allowing foreign law firms to enter Indian legal market.