The Supreme Court on Wednesday restrained Reserve Bank of India (RBI) from granting licences to foreign law firms to practise in India.
Acting on an appeal by Bar Council of India (BCI), a bench of justice RM Lodha and AR Dave, also issued notices to 31 law firms in the country which are running in collaboration with foreign firms.
The BCI has challenged Madras high court judgment that permitted foreign lawyers “flying in” and “flying out” to advise their Indian clients here. Amongst a slew of directions, the HC had also allowed foreign law firms’ assistance to BPOs.
The SC direction comes after BCI counsel MN Krishnamani sought a clarification on the issue as Madras high court's February 21, 2012, judgment is contrary to an earlier ruling of the Bombay High Court debarring entry of foreign lawyers in India. Krishnamani said as there was no appeal against the Bombay HC verdict, it had attained finality. However, the Madras verdict had created confusion, he said.
Noting that the issue raised important question of law, the SC ordered: “… the RBI shall not give license or permission to foreign law firms to practise in India.” It also clarified that the term “practice” would include not only litigious practise but also non-litigious practise, like consultation, legal drafting, etc. A division bench of the Bombay high court had in December 16, 2009, held that the RBI was not justified in granting permission to the foreign law firms to open the liaison offices in India.