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Decoding latest salvo in Nirav Modi privilege battle: CAM had no privilege, claims CBI

Nirav Modi privilege debate likely is far from over...Nirav Modi privilege debate likely is far from over...

After an unnamed Central Bureau of Investigation (CBI) source had told the Times of India in April that the agency might file a case against Cyril Amarchand Mangaldas (CAM) over Nirav Modi files it had held, Reuters has today run a follow-up scoop that has been widely picked up by nearly all Indian media.

Ironically, despite Reuters’ headline today of “Exclusive: Indian police scrutinize major law firm in PNB fraud probe after documents moved”, the substance of the headline was not much of a scoop, but was nearly identical to the April Times of India headline of “CBI lens on top law firm in PNB scam”.

Indeed, much of the story was similar. Reuters today had led with: “India’s largest law firm, Cyril Amarchand Mangaldas (CAM), is being scrutinized by federal agents after they seized documents related to the $2 billion fraud at state-run Punjab National Bank”; the April Times story had led with: “CBI is exploring the option of naming a top law firm either as a conspirator or registering a fresh case - for possession of stolen property...”

While the Times of India in April did not name CAM (though we did in our coverage), today the Economic Times republished the Reuters story and went with: “Law firm, Cyril Amarchand Mangaldas, under scanner in PNB fraud probe”.

Zee Business was even bolder (and likely more reckless, seeing as the article has since been taken offline), asking in its headline (despite no evidence of fraud in the Reuters story): “Did India’s largest law firm Cyril Amarchand commit fraud? CBI hot on trail”.

(For the avoidance of doubt, the answer to that question, as dictated by Betteridge’s law of headlines and according to the facts currently available, has to be ‘no’).

Where’s the news?

But let’s put media over-excitement about anything Nirav Modi aside and take a step back and figure out what’s new, exactly.

As we see it, there are at most three new developments in today’s Reuters story.

First, Reuters has a named source to support its lead, rather than only an unnamed CBI source that the original Times of India story had.

Second, the Reuters story and CBI sources also go into privilege, which is probably the crux of the issue, as we had predicted in March, as later supported by the CBI court submissions.

And third, thanks to Reuters, we now know how many Modi documents were allegedly in CAM’s possession: “The documents were moved in a mini-truck in 50-60 cartons to the law firm, according to two witness testimonies seen by Reuters.”

However, according to Reuters today, citing CBI counsel K Raghavacharyulu and one unnamed CBI source, the agency is still considering whether to file charges against the law firm, with Raghavacharyulu reportedly saying: “Who told you we are not going to charge them? The possibility of naming CAM in the next Nirav Modi case charge sheet has not been ruled out.”

Since the CBI were considering that same option back in April and they are still apparently considering that option five months later, this begs the question: what exactly is taking them so long? Furthermore, Reuters reported today:

Since then, Raghavacharyulu said, police have not interviewed any CAM official in the case, though one CBI source said that before filing the first charge sheet, police summoned, questioned and recorded the statement of at least one junior CAM lawyer.

Surely, if the CBI had a solid case against CAM, they would have interviewed a few more people and managed to file charges already?

Much of the subtext between the lines of these reports point towards the CBI indulging in some sabre rattling, but what is particularly interesting is why the CBI feels that it needs to rattle any sabres at all?

Why the sharp words?

We had first broken on 26 February 2018 that CAM had been raided by the CBI and had cooperated, handing over documents relating to the scam probe into Nirav Modi, who had purportedly been a client of the firm on a matter that was not directly related to the fraud.

As we had argued in March 2018, however, the raid and possible cooperation by CAM with the CBI may face several problems with respect to lawyer-client privilege.

Particularly, as implied in a Mumbai special court application by the CBI in late March, the letter of undertaking (LOU) that it had recovered from CAM’s premises could be critical to a future prosecution of Nirav Modi and his associates.

If this document was potentially covered by lawyer-client privilege, Modi could try to invoke privilege in his defence in order for the evidence not to be admissable, which would require the CBI to rebut Modi’s privilege assertion (whether any of his co-accused associates could also rely on this is a different question).

However, according to Reuters’ report of today, prosecution counsel K Raghavacharyulu said: “CAM was not their attorney in the PNB fraud case, 100 percent sure ... that’s why they could not cite attorney-client privilege.” According to Reuters, Raghavacharyulu based his statement on “regular briefings” from CBI investigating officers.

It is reasonable that the CBI is hoping that the privilege question will just magically go away, especially before any potential trial.

But despite Raghavacharyulu - who has a colourful history having in 2014 himself faced CBI raids relating to the Karnataka mining scandal - apparently being “100 percent sure” about the privilege question, it’s unlikely to be as cut and dry.

How the privilege cookie crumbles (or not)

For one, it is highly unlikely Modi would have parked allegedly detrimental documents with CAM without having been a CAM client at least on paper, presumably wanting to take advantage of lawyer-client privilege (as seems to be implied in the narrative of the entire affair). Otherwise, Modi could have just dumped the documents in a warehouse, a basement, with a chartered accountant or in a fire, rather than with a law firm.

Alternatively, there is the ‘document storage’ theory, as had been speculatively put forward by lawyer Lalit Bhasin, which would imply that any lawyer-client relationship between Modi and CAM was a mere figleaf and the documents were completely unrelated to the actual instruction for legal work.

In such a case, this could mean that privilege does not apply, though, according to our March report even that is not a certainty:

One senior counsel, who deals in criminal matters and PILs but declined to be identified, disagrees that there was even a document storage exemption. “It’s kept for a client, not for the purposes of storage, because the lawyer wants to keep it,” he says simply.

After all, if a client asks a lawyer to represent them and then sends you a bunch of documents they claim are related, who is a lawyer to decide whether those documents are relevant or not (the large quantity of documents, 50-60 cartons in this case, could work for or against CAM and privilege in this respect, depending on what the instruction was).

But even if the factual situation is clear-cut, the CBI’s problem will be that there is not a lot of Indian case law (or statute) around privilege, as we had reported in March, and if the LOU is crucial to the prosecution (and if Modi ever faces the courts), whether privilege exists or not could end up being a hard-fought point by Modi’s lawyers.

Another way to nix privilege would be the fraud exemption, under section of the Indian Evidence Act 1872 under which the lawyer must have taken part or assisted in a fraud willingly and knowingly.

Seeing as there is currently no evidence of fraud committed by CAM and as the CBI does not seem to have alleged any fraud by CAM either so far, either on- or off-the-record, all that remains is an implied threat to CAM.

Of course, CAM too finds itself between a rock and a hard place: if the documents do indeed turn out to have been potentially privileged, then it doesn’t look great that CAM surrendered them in a CBI raid so quickly (with theoretical but unspecified damages against CAM available to Modi).

On the other hand, if the documents are not at all privileged, then the question arises of what CAM was doing with the documents in the first place (again, the quantity of 50-60 cartons could potentially work in their favour or against them). At that point, CAM might also be called upon to assert that it had taken receipt of the documents in good faith from Modi (though that could be very hard for the CBI to disprove in reality).

While, frustratingly for the CBI, it has not made much headway in apprehending Modi, it’s also remains likely that the legal side of the story will only really begin once they do.

Until then, there are sabres to rattle.

CAM declined to comment and did not respond to requests for comment by us, though it did to Reuters:

CAM declined to comment on its relationship with Modi, who is on the run overseas. Its spokeswoman, Madhumita Paul, said the firm “strictly follows the legal best practices and does not comment on matters that are sub-judice or are under investigation”.

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By reading the comments you agree that they are the (often anonymous) personal views and opinions of readers, which may be biased and unreliable, and for which Legally India therefore has no liability. If you believe a comment is inappropriate, please click 'Report to LI' below the comment and we will review it as soon as practicable.
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Like +8 Object -3 NLU Stud 20 Sep 18, 00:49  interesting
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Like +16 Object -20 Managed piece 20 Sep 18, 01:36  controversial
Wow Kian! What a managed piece!!

Kian Ganz is going so soft on something so explosive? Why Kian? Why? The nation wants to know.

CAM is a very powerful firm with powerful friends. So many people in power have talked of how CBI is a politically controlled body, it’s no surprise then that they may have gone soft on CAM. But why you Kian?

Given your resources and reach, I am sure you know the real story. Which may be very shocking and demonstrates how greed can make people go crazy!

100 years of values? Humbug.

This couples with the case against him brought by Shardul in the High Court really demonstrates how the mighty have fallen.

Sad day.
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Like +22 Object -0 kianganz 20 Sep 18, 01:41 LI subscriber  interesting  top rated
Nice try, but I fear you may not have read the article? :)

But that's ok... While I don't doubt CAM is powerful and has powerful friends, from what is known so far, the situation is probably more nuanced than what you're imagining...
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Like +24 Object -3 571 20 Sep 18, 04:13  interesting  top rated
I for one, enjoyed the piece. A balanced and well researched piece that doesn't make any hasty and rash assumptions or declarations.

Just as it should be. One wants the news plain and unvarnished along with a bit of pukka/solid research if the news involves a niche area of knowledge. That's it. No puffery and fluff.

It is most refreshing to read a piece devoid of histrionics, which takes ethics in journalism seriously (The Betterdige thingy) despite being ever so readable.

This article wasn't devoid of humour. The remark about Reuters and its headline does make one chuckle.

Good work legally India.
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Like +5 Object -0 kianganz 20 Sep 18, 11:44 LI subscriber  interesting
Thanks, glad you enjoyed it.
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Like +11 Object -0 571 20 Sep 18, 04:22  interesting
I ain't a shill but the world has gone to hell in a hand basket because of this nation wants to know nonsense. Arnab has caused more damage then Kasab. We howl and hoot like a bunch of apes instead of engaging in calm rational discussion.

Ever since the internet became cheap 24x7 news has turned most of us into a bunch of oiks and dullards.

No one reads and analyses news. Maybe even re read it to fully grasp the meaning conveyed.

Nah, masala articles with limited vocabulary and rash/sensational themes is what the nation wants.
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Like +1 Object -0 571 21 Sep 18, 03:31
*than not then.
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Like +1 Object -0 Power Play 20 Sep 18, 09:27
Who knows whose power is in play?
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Like +4 Object -3 Managed piece 20 Sep 18, 02:21
Pray disclose what you know.... since you haven’t set it out in the article by your own admission.... would love to understand the nuances you refer to....

How to 50-60 boxes of documents go through the Peninsula Corporate Park offices and get stored in one of their posh conference room where normally a posh partner is offering supari and paan to clients?
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Like +5 Object -0 kianganz 20 Sep 18, 11:33 LI subscriber  interesting
Haha, such conspiracy theorists :) What's in this article is pretty much all I know that can be confirmed and that's relevant, unless you'd prefer for me to share gossip and conjecture?
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Like +3 Object -0 Bollywood Friday’s 20 Sep 18, 02:24
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Like +4 Object -7 Eeee 20 Sep 18, 08:35
This does look like paid promotion. I actually double checked for the sponsored tag.

While you have quoted your articles covering the investigation, TBH, this is the sort of article which is written for the sake of propoganda.
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Like +14 Object -0 Prosecution 20 Sep 18, 08:52  interesting  top rated
Raghavacharyulu having “colourful” antecedents is an understatement - these unnamed CBI sources are probably the friends who propped up his career in the first place. Completely motivated story by the Not So Powerful, post the explosion of the Claw Back policy.
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Like +8 Object -7 Guest 20 Sep 18, 09:59  controversial
Total fake news by paid media, spread by a rival law firm.
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Like +25 Object -3 Guest 20 Sep 18, 12:25  interesting  top rated
Honest question. Does anyone understand the point of Bar & Bench? Their pandering law firm coverage is half-baked and awful, Livelaw does litigation better than they do most of the time, and their paywall is idiotic.
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Like +1 Object -0 lmao 20 Sep 18, 14:23
You underestimate the market value of pandering law firm coverage
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Like +2 Object -0 Explosive stuff 20 Sep 18, 10:04
CBI says CAM wasn’t Nirav Modi’s lawyer

CAM gave documents when CBI raided them. Didn’t resist on the grounds of attorney-client privilege. Nor did they go to any court to suggest that the seizure of documents was illegal.

Therefore, it would be logical to conclude that CAM was in possession of documents of Nirav Modi which implicate Nirav Modi/suggest he committed a crime. It may also be logical to conclude that the documents were hidden using a law firm as a front!

If this is true, unless political pressure is applies, they are up SHO- creek!!
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Like +3 Object -0 kianganz 20 Sep 18, 11:48 LI subscriber
Presumably the key question is whether CAM knew that Modi was (allegedly) using the law firm as a front to hide documents. If they accepted the documents in good faith on the basis of their instruction, then they wouldn't be in any trouble.

However, this wouldn't mean that Modi wouldn't eventually try to argue that privilege applies anyway, since the law in this area is rather vague...
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Like +3 Object -2 Inhouse guy 20 Sep 18, 11:26
These guys should watch Better Call Saul seriously what kind of lawyers are these. Neither know the law nor have balls
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Like +0 Object -4 Spokeswoman? 20 Sep 18, 11:31
What Spokeswoman??? Isn't it spokesperson? whether its a man or woman..
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Like +6 Object -0 Theybies 20 Sep 18, 12:31  interesting
Kian, please ignore these theybies.
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Like +4 Object -1 Manwhohasitall 20 Sep 18, 15:10
Spokeswoman is a gender neutral term, encompassing both women and men. I don’t see the problem with it.
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Like +3 Object -0 571 20 Sep 18, 16:40
What's wrong with spokeswoman ? Let the people be free. It's 2018 !

Why must one be gender neutral if one's confident about one's gender.

Glad to see this spokesperson nonsense is being put to rest.
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Like +7 Object -0 kianganz 20 Sep 18, 16:48  interesting
Take it up with the Reuters styleguide, y'all ;)
spokesman, spokeswoman

not spokesperson. If the sex of the person is not known, use representative.
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Like +2 Object -2 571 20 Sep 18, 17:56
Thank God Reuters ain't falling for this PC nonsense which doesn't even make sense.
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Like +24 Object -2 First floor Okhla 20 Sep 18, 12:15  interesting  top rated
Heard my managing partner was busy the entire day yesterday sending this news item to everyone on his phone list. Busy days in my firm indeed.
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Like +3 Object -1 Okhla client 20 Sep 18, 13:50
MP or someone who MP does not get along with in his house. Because this is exactly the kind of thing what that immature kid would do out of spite and for lack of anything better to do than to fan the flames.
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Like +2 Object -1 Lol 20 Sep 18, 15:11
MP is a she, not a he, unless you’re the other firm in Okhla
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Like +4 Object -0 First floor Okhla 20 Sep 18, 16:55
So you think, Duhling. Wheels within wheels.
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Like +0 Object -0 Ummm 23 Sep 18, 23:14
Isn’t the Okhla managing partner Pallavi?

Presumably either you make for a shitty associate or worse someone with a vested interest.

Why do I say so — ‘his phone list’....
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Like +19 Object -1 Proliteriat 20 Sep 18, 16:48  interesting  top rated
In all this, I am sure that there is going to be some unlucky associate who is going to be caught in this (for accepting delivery of documents and stuff) who is going to pay the price for their boss's connivance.

My prayers are with them.
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Like +4 Object -2 Guest 20 Sep 18, 17:27
Modi and Adani connection means nothing will happen.
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Like +16 Object -2 Guest 20 Sep 18, 18:20  interesting  top rated

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Like +3 Object -9 CAM is innocent 21 Sep 18, 12:14
Paid news and presstitutes in the media are trying to defame CAM for no reason with provocative headlines. The Dirty Tricks Department of Congress party is provoking it. It is Congress that is responsible for Nirav Modi, Vijay Mallya and other scams. Furthermore, Shehzad Poonawalla has gone on record saying Rahul Gandhi met Nirav Modi is a hotel room. So who is doing the fraud here?
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Like +3 Object -5 571 21 Sep 18, 14:36
In 2016, a whistle blower writes a letter in which he details the PNB scam, BJP ignores it.

Mallya meets Hon'ble FM before leaving for London. His look out notice is diluted. FM sits around and doesn't tell anyone.

And yet you lot blame others. That's your game isn't it ?

Blame Britishers,thousand year old kings and everyone else for the fact that you lot are inferior beings with feeble minds who'd have been sterilised when Eugenics was all the rage.

Why do you bhakts hate women, bring up the world's oldest profession or attack a woman's character ?

Are you incels overcompensating for the fact that your mothers flattened a fair bit of grass in their time , meaning you lot are of dubious parentage and thus are unsure about which surname to use if any ?
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Like +1 Object -3 Goofball 24 Sep 18, 15:48
Are you ok?
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Like +2 Object -0 Guest 04 Oct 18, 10:57
How did CAM not have privilege? Weren't they appointed as the IPO Counsels to Nirav Modi?
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Like +2 Object -1 Going soft again?? 28 Oct 18, 02:13
My dear Kian,
Not reporting the about turn made by CAM on the Chanda Kochhar report? I thought you would provide an insightful piece on the subject!
Crony capitalism at its best!
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