The Supreme Court Advocates-on-Record Association Today (June 16) criticized ED’s now-withdrawn summons to senior lawyer Arvind Datar, calling it harmful to legal independence and citizens’ rights.
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NEW DELHI: The Supreme Court Advocates-on-Record Association (SCAORA) strongly criticised the Enforcement Directorate (ED) for sending a summons to Senior Advocate Arvind Datar.
The association warned that this action is a dangerous signal for all lawyers and can hurt how justice works in India.
In its statement, signed by Honorary Secretary Nikhil Jain, SCAORA said the ED’s action was “unwarranted”.
The group also mentioned that there is a growing trend of “investigative overreach” that is making it difficult for lawyers to work freely and fairly.
The association praised Arvind Datar, saying:
“Mr. Datar is a respected Senior Advocate of unimpeachable integrity, who has consistently upheld the highest standards of professional conduct and legal ethics.”
SCAORA said that ED wrongly mixed up legal help with crime.
They added:
“conflates legal advice with criminal complicity,” and called this method “constitutionally untenable and legally unjustifiable.”
They warned that if this continues, many lawyers may stop taking important cases out of fear, and that would hurt people’s rights.
As the statement said:
“This move sends a chilling message to the legal community at large and threatens the foundational right of every citizen to receive independent legal counsel without fear or intimidation.”
The association explained how important lawyers are in Indian democracy.
They said:
“The independence of the judiciary and the independence of the Bar are twin pillars of our constitutional democracy. The effective functioning of courts is impossible without fearless and independent advocates.”
Although the ED later took back the summons, SCAORA made it clear that the agency’s action was wrong and dangerous.
They said they-
“lodge their strong protest against the arbitrary exercise of executive power by the agencies.”
The ED had sent the summons to Arvind Datar because of a legal opinion he gave about Employee Stock Option Plan (ESOP) given by Care Health Insurance to Rashmi Saluja, who used to be the chairperson of Religare Enterprises.
The legal opinion supported giving over 22.7 million ESOPs, which were worth more than Rs 250 crore, to Saluja. Now, both the ED and the Insurance Regulatory and Development Authority of India (IRDAI) are checking whether this move followed the law or if there was any misuse of money.
Later, ED dropped the summons. As per reports, Datar told ED that lawyers cannot be summoned when they are advising their clients. He also explained that lawyers are not allowed to share any legal advice given to their clients, because of professional privilege.
ED EARLIER ACTIONS
The Enforcement Directorate (ED) on 14th June took back the summons it had earlier sent to Senior Advocate Arvind Datar. This was related to the investigation into the Employee Stock Option Plan (ESOP) given by Care Health Insurance to Rashmi Saluja, the former chairperson of Religare Enterprises.
As per news sources, Arvind Datar, who is a very senior and well-known lawyer and has even represented SEBI in big cases like the Sahara fundraising matter, told the ED that:
“Lawyers cannot be summoned for investigations involving their clients.”
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He also explained that:
“Under legal rules, lawyers are prohibited from disclosing legal advice given to their clients.”
The ED had earlier summoned Datar because he gave a legal opinion that supported the ESOP granted to Rashmi Saluja. This ESOP grant has been under review by regulators and investigative bodies. But now, ED has officially told Datar that he does not need to appear anymore. This means the ED has withdrawn the summons.
The ESOPs in question were more than 2.27 crore stock options, worth over Rs 250 crore. These were granted to Rashmi Saluja by Care Health, a company fully owned by Religare Enterprises.
In November 2023, the Insurance Regulatory and Development Authority of India (IRDAI) said that the ESOP grant broke industry rules. According to those rules, companies cannot give more than Rs 10 lakh in compensation to non-executive directors without prior approval.
IRDAI ordered Care Health to cancel all unexercised options and also buy back the shares that were already given.
After IRDAI passed its order, the ED started a money laundering investigation based on a complaint made by the Mumbai Police Economic Offences Wing. As part of its probe, ED searched offices in August 2024 and also froze the ESOP shares that were given to Rashmi Saluja and other top executives of Care Health.
The summons to Arvind Datar was part of a bigger investigation. ED was looking into the legal and structural details behind how the ESOPs were given. Now that the summons is withdrawn, it is not clear if the ED will still keep looking into the role of legal advisors involved in this matter.
In a separate legal battle, Rashmi Saluja has also gone to the Delhi High Court. She is trying to stop the Burman family’s takeover of Religare Enterprises. Saluja claims that the takeover breaks rules under SEBI’s takeover code, and she has asked the court to stop them from using voting rights on shares they got through an open offer.
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