Latest news with #EmployeeStockOptionPlans


Indian Express
27-06-2025
- Politics
- Indian Express
Investigative agencies summoning lawyers violates the lawyer-client privilege
Written by Shailee Basu The Supreme Court's initiation of suo motu proceedings concerning investigating agencies directly summoning lawyers marks a critical juncture in the ongoing tension between investigative autonomy and the independence of the legal profession. This development, prompted by the Gujarat Police summoning a lawyer representing a client, follows another controversial incident: The Enforcement Directorate (ED)'s summons issued to Senior Advocates Arvind Datar and Pratap Venugopal, relating to their advisory services on Employee Stock Option Plans (ESOPs) of Care Health Insurance. The SC's cognisance of these incidents underscores a growing concern. Unchecked investigative authority risks compromising judicial fairness and undermining fundamental principles of criminal justice. Lawyer-Client privilege: A constitutional safeguard This issue raises many questions about lawyer-client privilege and the independence of legal counsel that underpin fair trial rights and are embedded within Article 22(1) of the Constitution. The SC, recognising the gravity of the issue, observed that allowing agencies to directly summon defence counsel or legal advisors merely for rendering professional services would 'seriously undermine the autonomy of the legal profession' and pose a threat to 'the independence of the administration of justice.' Lawyer-client privilege is neither novel nor peculiar to Indian jurisprudence. It is a universally accepted safeguard embedded in common law traditions. In India, it is statutorily codified in Section 132 of the Bharatiya Sakshya Adhiniyam, 2023 (BSA), the successor to Section 126 of the Indian Evidence Act, 1872. This provision unequivocally protects confidential communications between lawyers and clients from compelled disclosure without the client's consent. In State of Punjab vs Sodhi Sukhdev Singh (1961), the SC affirmed the sanctity of this privilege, holding that confidentiality between a lawyer and client is essential to effective legal representation and the fair administration of justice. Breaching this confidentiality undermines not only professional integrity but also erodes public confidence in the impartiality of the legal system. Investigative powers and statutory limits Investigating agencies, empowered under various statutes, do possess broad discretionary powers. However, these powers must be exercised within clearly defined legal and constitutional limits. The ED's summons, withdrawn after strong objections from Bar associations across the country, highlighted the dangers of unconstrained investigative discretion. The agency subsequently issued a circular advising its officers not to issue summons in violation of Section 132 of the BSA, implicitly acknowledging the earlier overreach. It is essential to distinguish between legitimate legal representation and active complicity in criminal conduct. To collapse this distinction would impact the willingness of lawyers to represent clients in politically sensitive and high-stakes matters, thereby impairing access to justice. The imperative for judicial oversight In this context, the SC's intervention is both necessary and timely. Investigations that seek to implicate lawyers beyond their professional roles must be subjected to judicial oversight. Such oversight, ideally at the level of a magistrate or special judge, must require a detailed, reasoned order that explains why legal privilege does not apply, as and when a lawyer is summoned. Additionally, notifying the relevant Bar Council or association would provide an institutional safeguard, consistent with international best practices. Global jurisprudence strongly supports such oversight. In the United Kingdom, investigative actions involving lawyers, such as searches and seizures, require prior judicial authorisation under Section 8 of the Police and Criminal Evidence Act 1984 (PACE). Likewise, the European Court of Human Rights in Niemietz vs Germany (1992) held that law offices are entitled to heightened protection, adding that unrestricted searches threaten both legal professional privilege and the integrity of the justice system. Rule of law and fair trial The risk of investigative excess is especially acute in politically charged or complex corporate matters. The recent episodes involving Senior Advocates Datar and Venugopal illustrate how easily legal advice can be misconstrued as complicity, thereby turning investigative mechanisms into tools for intimidation or retribution. When the state's investigative powers operate without clearly articulated limits, they risk becoming instruments of coercion rather than instruments of justice. Lawyers, like all citizens, are not above the law. But accountability must be balanced by institutional safeguards that protect the lawyer's role as a facilitator of justice. The SC's intervention is not simply about defending a professional class; it is about reaffirming the constitutional architecture of legal representation: Rule of law and a fair trial. The writer is a lawyer and Research Fellow with the Crime & Punishment team at Vidhi Centre for Legal Policy. Views are personal


Indian Express
26-06-2025
- Indian Express
Why investigators cannot summon lawyers
The Supreme Court on Wednesday observed that police or prosecuting agencies summoning legal professionals for advising their clients infringed on the rights of advocates and threatened the legal profession's autonomy. 'Counsel who are engaged in their legal practice have certain rights and privileges guaranteed because of the fact that they are legal professionals, and also due to statutory provisions,' the apex court said. It made the observations during a hearing involving a Gujarat-based lawyer, who was summoned by police for securing bail for his client in a loan dispute case. This came days after the Supreme Court Bar Association condemned the summons issued by the Enforcement Directorate (ED) to two senior advocates of the top court, Arvind Datar and Pratap Venugopal, on June 12 and June 18 respectively. The lawyers were summoned in connection with the agency's probe into the allotment of Employee Stock Option Plans (ESOPs) by Care Health Insurance Ltd to Rashmi Saluja, former chairperson of Religare Enterprises. Is attorney-client communication privileged? Under the Bharatiya Sakshya Adhiniyam (BSA), 2023, which replaced the Indian Evidence Act, 1872, communications between legal advisers and their clients are privileged, meaning they cannot be disclosed to a third party. Section 132 of the BSA states that an advocate is not allowed to disclose any communication, even after employment has ceased, except in three circumstances: if the client consents to it; the communication pertains to illegal purposes; and the advocate observes criminal activity being carried out during the employment. A lawyer is also exempted from testifying or revealing conversations with their client, whether made in oral, written, or electronic form. No other professionals, including chartered accountants, company secretaries, and cost accountants, have this privilege. What have courts said on such summons to lawyers? Over the years, courts have asserted that police or prosecution agencies cannot issue summons to lawyers for advising their clients. In A.V. Pavithran v. CBI (2024), the Bombay High Court quashed summons issued by the Inspector General (IG) of the Central Bureau of Investigation (CBI) in Goa to Advocate A V Pavithran. The summons required Pavithran to appear before the IG as the agency wanted to question him in connection with a case registered under the Prevention of Corruption Act, 1988, involving his client whose bank accounts had been frozen by the CBI. In its order, the court noted that any legal advice rendered is not subject to disclosure under Section 126 of the Indian Evidence Act (now Section 132 of the BSA). 'The rule is 'once privileged, always privileged'. Under Section 126, an Advocate is not permitted to state the contents or condition of any document with which he has become acquainted in the course and for the purpose of his professional employment,' the court said. In Praram Infra v. State of M.P., the Madhya Pradesh High Court, in March 2025, quashed summons issued by Indore's Deputy Commissioner of Police (DCP) to Advocate Rahul Maheshwari, who represented the petitioner in the case. In this instance also, the court cited Section 126 of the Indian Evidence Act in its order as the reason for quashing the summons. The High Court said that such summons should not be issued, especially when the advocate is neither an accused nor a witness.


Hindustan Times
21-06-2025
- Politics
- Hindustan Times
ED withdraws summons to senior advocate amid row
The Enforcement Directorate (ED) on Friday withdrew its summons to senior advocate Pratap Venugopal, hours after the Supreme Court Advocates-on-Record Association (SCAORA) urged Chief Justice of India (CJI) Bhushan R Gavai to take suo motu cognisance of the agency's move, calling it a grave infringement on the independence of the legal profession and the sanctity of lawyer-client privilege. The summons pertained to the ongoing investigation into the allotment of Employee Stock Option Plans (ESOPs) by Care Health Insurance. (HT photo) Venugopal, summoned on June 19 to appear before the ED on June 24 under Section 50 of the Prevention of Money Laundering Act (PMLA), 2002, received a text message from the agency on Friday afternoon informing him that the notice 'stands withdrawn with immediate effect.' The summons pertained to the ongoing investigation into the allotment of Employee Stock Option Plans (ESOPs) by Care Health Insurance to former Religare Enterprises Chairperson Rashmi Saluja. Venugopal was the Advocate-on-Record (AoR) for a legal opinion rendered by senior counsel Arvind Datar in the matter. ED had earlier summoned Datar as well, but that notice too was rescinded following backlash from the legal fraternity. In a letter dated June 20, SCAORA President Vipin Nair described the summons to Venugopal as 'a deeply disquieting development,' and warned that coercive measures against lawyers for professional legal opinions strike at the heart of legal privilege and the fundamental tenets of the rule of law. SCAORA asserted that such actions represent an 'impermissible transgression' into the constitutionally protected sphere of legal advice. 'The role of an advocate in offering legal advice is both privileged and protected. Interference by investigative agencies, particularly in respect of opinions rendered in a professional capacity—strikes at the core of the rule of law,' the letter stated. SCAORA urged the Supreme Court to examine the legality and propriety of summoning advocates for professional opinions and called for the framing of clear guidelines to insulate the legal profession from similar overreach in the future. This is the second time in recent days that the Association has stepped in to defend the autonomy of the Bar. On June 16, SCAORA issued a public statement condemning the ED's notice to Datar as 'unwarranted' and a manifestation of growing investigative overreach. Similar concerns have echoed across the legal landscape. On June 17, the Delhi High Court Bar Association passed a resolution criticising the ED's actions, warning of a direct threat to the constitutional right to legal representation and fair trial. The Gujarat High Court Advocates Association also convened an emergency meeting, with its president Brijesh Trivedi calling for urgent government action to protect lawyer-client privilege through amendments to the Indian Evidence Act, 1872, and the Bharatiya Sakshya Adhiniyam, 2023. While ED has not formally disclosed reasons for withdrawing the summons to Venugopal, senior members of the Bar see the move as an implicit recognition of the serious constitutional and professional issues flagged by the legal community.

Mint
09-06-2025
- Business
- Mint
Looking at HDFC Bank CEO Sashidhar Jagdishan's annual payout as lender faces trust fund fraud claims
India's largest private bank's Chief Executive Officer (CEO), Sashidhar Jagdishan, takes home a hefty multi-crore salary every year, according to HDFC Bank's annual report for the financial year ended 2023-24. Let's take a look at how much the executive earns per year amid the financial fraud allegations from Lilavati Kirtilal Mehta Medical Trust. The Lilavati trust is owned and controlled by the Mehta family. On Sunday, 8 June 2025, the trust which oversees Lilavati Hospital in Mumbai called upon the board of directors of HDFC Bank, seeking the suspension and legal prosecution of the CEO over an alleged involvement in a financial fraud and fund corruption case related to the trust. The Mehta family also lodged an FIR against the HDFC Bank CEO on Sunday after the Lilavati Trust allegations. Along with the CEO, the Trust accused eight individuals, including former bank employees, of financial fraud and misappropriation of the trust's funds. The Mehta family-owned 'Splendour Gems Ltd' defaulted on its loans from HDFC Bank and other consortium banks in 2001. The loans were granted to the entity in 1995. HDFC Bank CEO Sashidhar Jagdishan earns around ₹ 10.76 crore annually as of the financial year ended 2023-24, according to the annual report of the private lender. Jagdishan's salary breakup consists of ₹ 2,94,35,661 or over ₹ 2.94 crore as a basic salary, ₹ 3,32,10,228 or more than ₹ 3.32 crore as allowances and perquisites, ₹ 35,32,285 or over ₹ 35 lakh in provident fund, ₹ 44,15,352 or more than ₹ 44 lakh in superannuation, and ₹ 3,71,20,846 or over ₹ 3.74 crore in performance bonus, according to the company filing. The CEO was granted a total of 2,09,131 ESOPs (Employee Stock Option Plans), and the ratio of Jagdishan's salary to the median employee salary was at 167.70:1 for FY2023-24. According to the filing data, Sashidhar Jagdishan received a cash variable pay of ₹ 5 crore for his performance in the year 2022-23, paid in FY2023-24. However, this was not included in the variable pay component of the 2024 fiscal. HDFC Bank CEO Sashidhar Jagdishan also received ₹ 2.90 crore as dividend from the institutional lender for all the equity shares he owns in the company. Jagdishan holds 17,09,143 equity shares in HDFC Bank as of the year ended 31 March 2024. Sashidhar Jagdishan was reappointed as the MD and CEO of HDFC Bank for a period of three years from 27 October 2023 to 26 October 2026, with both days included in his term.


Mint
28-05-2025
- Business
- Mint
Primer: Can dissenters aid shareholder democracy?
In Nifty 500 companies, even when a majority of public shareholders oppose a resolution, it's not enough to stop it from being approved, a report by Institutional Investor Advisory Services (IiAS), a proxy advisory firm, found. Mint explains this anomaly. How do no-votes get bypassed? According to IiAS's review, most shareholder resolutions of Nifty 500 companies pass because the promoters hold the majority 51% of shares. Their holdings are significant. Public shareholders, including institutional investors, big money managers like mutual funds, insurance firms, pension funds and foreign portfolio investors, make up about 27% of ownership. Then, there are 'others' —a mix of retail investors, HNIs, family offices and private equity players. These groups do not have a majority and have lower voter participation. So even when many of them vote against a proposal, they can be ignored. Do investors show a voting pattern? In 2024, institutional investors held over a quarter of shares in Nifty 500 companies and voted on nearly 80% of the proposals. Of 4,840 resolutions put before shareholders during the year, only 24 were rejected, meaning 99.5% were approved, underlining promoter dominance. Resolutions on pay packets were opposed. Adani Ports and Special Economic Zone Ltd saw 46.91% institutions vote against a compensation proposal, yet it passed. Similarly, 45.26% opposed a resolution at Persistent Systems Ltd but it passed. Employee Stock Option Plans faced the most dissent from institutional investors. What does the report say on types of resolutions? Those on owner-manager remuneration are classified as 'ordinary' and need a simple majority. Since promoters vote on these, they always get approved. The report suggests reclassifying these to 'majority-of-minority', requiring more votes and stopping promoters from voting on their compensation. This could result in greater accountability and fairness. Do retail and small investors have a say? They have very little say in company decisions. In calendar year 2024, retail investors owned 22% of the shares in Nifty 500 companies, but only 19% of them exercised their voting rights. Even when they did vote, fewer than 1% voted against. In contrast, promoters who owned more than 51% of the shares voted on the majority of their holdings, giving them higher influence. Because of this imbalance, even if small investors disagree with a decision, it rarely changes the outcome. Their voices often go unheard. How can the dissent mechanism improve? IiAS proposes a dissent review mechanism, where more than 10% of votes against a resolution would trigger a formal response from the company. After engaging with dissenting shareholders, the board would disclose any action taken, such as amendments made to the resolution. This is inspired by the Indian Constitution, which allows the President to return a bill to Parliament for reconsideration. Translated for resolutions with more than 10% dissent it means fewer than one in ten resolutions will need to be revisited.