Supreme Court Refuses To Interfere With Police Summons To Law Firm, Stays Arrest

The Supreme Court on Tuesday refused to interfere with a police summons to a law firm in connection with an investigation, though it stayed the arrest of the advocate of the firm for two weeks. The firm has been directed to appear before the police and give their explanation.

They were also granted liberty to take steps to challenge the summons before the High Court.

The Court also refused to interfere with a Madras High Court order impleading the law firm in a contempt proceeding.

A bench comprising Chief Justice of India Surya Kant and Justice V Mohana was hearing a special leave petition filed by law firm 'The Legal Attorneys and Barristers' challenging the Madras High Court's orders impleading them as a respondent in a contempt petition.

Background

The contempt petition was filed by Phoenix ARC Private Limited, an asset reconstruction company, in pursuance of an earlier judgment of the High Court setting aside the sale of the properties of Samarpana Charitable Trust to the Chennai Metro Rail Ltd. The High Court, after finding that Phoenix ARC had prior charge over the trust properties, had set aside the trust's sale to the CMRL as fraudulent. The judgment further revealed that CMRL had paid approximately ₹13.30 crore to the trust as compensation for the acquired property. The court directed CMRL to take all available legal measures to recover the amount. Expressing concern over the possible diversion of public funds, the Bench ordered the Chennai Central Crime Branch to immediately investigate complaints filed by Phoenix ARC.

In the contempt proceedings, the High Court, after noting that about Rs 6.8 crores have been transferred to 'The Legal Attorneys and Barristers', impleaded the law firm as a party respondent. The Chennai Central Crime Branch also issued a summons to them in connection with the investigation.

Arguments in the Supreme Court

Senior Advocate Meenakshi Arora, appearing for the law firm, argued that the police summons to them is barred in view of the Supreme Court's judgment pertaining to summoning advocates. She also raised objection to the High Court adding them in the contempt proceedings

The bench however expressed reluctance to interfere, with the CJI saying that the firm's conduct required scrutiny.

"Why can't you be called? Your conduct is under scanner before the High Court. There are doubtful transactions. 7 crores! It is a case of complete fraud played by the party on the judicial system. The High Court is rightly taking action," CJI Surya Kant said.

The CJI said that the High Court had found the trust's sale to be dubious, and a substantial portion of the sale proceeds were diverted to the firm's account. Arora submitted that there were 69 cases of the trust in which the firm appeared over 600 times. The bench said that the statements of accounts can be shown to the High Court to convince it that the amounts received were for legal representation.

When Arora submitted that the issue of "client-attorney privilege" was involved, the CJI observed that it was a "very good ground" to raise before the High Court.

The CJI further said that the summons ought to be separately challenged before the High Court. Arora raised apprehensions about the police arresting the partners in the meantime. The bench said that it will protect them from arrest.

"While we don't find any ground to interfere with the orders passed by the High Court, we grant liberty to the petitioner to appear and submit their explanation in the contempt proceedings. As regards the notice issued by the State Police, it is directed that the petitioner appear before the police authorities and submit their explanation, but no coercive action shall be taken against Adv Hussain Moeen Farooq for a period of two weeks. Meanwhile, he shall at liberty to approach the High Court for necessary protection," the Court observed in the order.

Though Arora requested that the accounts of the petitioner be unfrozen, the bench refused.

Case : THE LEGAL ATTORNEYS AND BARRISTERS Vs PHOENIX ARC PVT. LTD. | D No. 36138/2026