What the Court Held
1. Two different sections of the BSA matter
Section 132 protects communications with advocates.
Section 134 protects communications with legal advisors.
The Court said that even though in-house counsel are qualified advocates, they are not “practising advocates” under the Advocates Act, 1961.
So:
- They cannot use Section 132.
- They only get the more limited protection under Section 134.
2. The problem with this interpretation
The Court treated in-house counsel as neither full “advocates” nor fully recognised “legal advisors.” This creates a confusing gap.
In reality, in-house counsel regularly give legal advice. The judgment does not fully acknowledge this, which makes their professional status unclear.
Salary has nothing to do with confidentiality
The Court suggested that because in-house counsel are salaried employees, their legal independence may be weaker.
This logic has problems:
- Getting a salary does not reduce professional ethics.
- Independence comes from integrity and duty to the law, not from who pays the lawyer.
- Many countries treat in-house counsel as fully independent legal advisors regardless of employment.
- Linking employment to weaker confidentiality could even harm corporate governance, since companies rely heavily on internal legal teams for compliance and risk management.
The Court borrowed reasoning from Europe, but India follows common law
The Court relied on a European case, Akzo Nobel, which denies privilege to in-house counsel on the ground that they lack independence.
The issue is that:
- Europe follows civil law, which sees in-house lawyers differently.
- India follows common law, where courts typically grant full privilege to in-house lawyers.
- Common law courts in the US, UK, Australia, and Singapore all protect the confidentiality of in-house counsel when they are giving legal advice, regardless of whether they are salaried employees.
Privilege should depend on the lawyer’s role, not their job title
If we read the BSA with purpose in mind:
- Section 132 protects the client.
- Section 134 protects the legal advisor.
Both sections are meant to work together. The Court’s reasoning weakens this system by focusing too much on employment status.
Modern in-house lawyers do far more than traditional legal clerks. They handle corporate governance, compliance, ethics, ESG rules, digital and data protection issues, etc. Given their critical role, privilege should depend on the function they perform, not whether they work inside a company or at a law firm. Global practice is moving toward this view:
"What matters is whether the lawyer is giving legal advice, not who pays them."
A step forward, but not the final answer
Despite its shortcomings, the judgment marks progress. It officially acknowledges in-house counsel in the debate on privilege for the first time.
Going forward, Indian privilege law will likely evolve to:
- align with global standards
- recognise that confidentiality and independence shouldn’t depend on employment labels
- treat in-house lawyers as genuine legal professionals whose advice deserves protection
This ruling is best seen as the beginning of a modern, updated understanding of attorney–client privilege, not the final word.
