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Issues: (i) Whether permission granted by the Reserve Bank of India to foreign law firms to establish liaison offices in India under section 29 of the Foreign Exchange Regulation Act, 1973 was valid. (ii) Whether carrying on non-litigious legal work in India amounts to practising the profession of law under the Advocates Act, 1961 and requires enrolment as an advocate.
Issue (i): Whether permission granted by the Reserve Bank of India to foreign law firms to establish liaison offices in India under section 29 of the Foreign Exchange Regulation Act, 1973 was valid.
Analysis: Section 29 of the Foreign Exchange Regulation Act, 1973 was held to govern establishment of a branch office or place of business for trading, commercial or industrial activity. The liaison functions disclosed by the foreign law firms were linked to legal services and professional work, not to trading or commercial activity. Permission under that provision could not be used to regularise professional legal practice in India.
Conclusion: The permission granted by the Reserve Bank of India was not valid.
Issue (ii): Whether carrying on non-litigious legal work in India amounts to practising the profession of law under the Advocates Act, 1961 and requires enrolment as an advocate.
Analysis: The expression "to practise the profession of law" was construed broadly to include both litigious and non-litigious work. The scheme of the Advocates Act, 1961, including the common roll of advocates, the right to practise, the bar on appearance without enrolment, and the disciplinary provisions, showed that the Act regulates the profession as a whole and not merely court appearance. Chamber practice, drafting, advice and opinion work were treated as part of legal practice.
Conclusion: Non-litigious legal practice is covered by the Advocates Act, 1961 and enrolment as an advocate is required.
Final Conclusion: Foreign law firms could not carry on legal practice in India through liaison offices without complying with the Advocates Act, 1961, and the Reserve Bank of India lacked authority to grant the impugned permission under the Foreign Exchange Regulation Act, 1973.
Ratio Decidendi: The profession of law includes non-litigious legal work, and a foreign entity cannot use a liaison-office permission meant for business activity to engage in legal practice in India without being governed by the Advocates Act, 1961.
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