The Enforcement Directorate (ED) halts advocate summons without prior approval, citing Section 132 of the Bhartiya Sakshya Adhiniyam, 2023, amidst a money laundering investigation into CHIL’s undervalued ESOPs.

ED Restricts Summons to Advocates Under Bhartiya Sakshya Adhiniyam, 2023

On June 21, 2025, the Enforcement Directorate (ED) issued a circular instructing all field units to refrain from summoning any advocate in violation of Section 132 of the Bhartiya Sakshya Adhiniyam, 2023. This legal provision ensures the confidentiality of client-attorney communication, stating that advocates cannot be compelled to disclose client information without explicit consent.

Director’s Approval Now Mandatory for Legal Exceptions

The ED’s directive clarifies that any exception to Section 132 must receive prior approval from the Director of the Enforcement Directorate. This policy change underscores a commitment to uphold legal rights during investigations, especially involving legal professionals.

CHIL Under ED Investigation for Undervalued ESOPs

This procedural update comes amidst an ongoing probe into Care Health Insurance Ltd (CHIL) for alleged money laundering. The case concerns the issuance of Employee Stock Options (ESOPs) on May 1, 2022, which were reportedly offered at prices far below their fair market value.

IRDAI Rejected ESOP Proposal Before Alleged Issuance

Despite a prior rejection from the Insurance Regulatory and Development Authority of India (IRDAI), CHIL allegedly proceeded with the ESOP allocation. This raises concerns regarding compliance and corporate governance.

Senior Advocate Pratap Venugopal Summons Withdrawn

As part of the investigation, the ED had summoned Pratap Venugopal, a senior advocate and independent director at CHIL. However, following the enforcement of the new circular, the summons was withdrawn. The ED has confirmed that any required documentation will be requested via email, respecting the legal confidentiality guaranteed to advocates.

Regulatory Action and Financial Penalties Imposed by IRDAI

Previously, on July 23, 2024, IRDAI had instructed CHIL to annul any unallocated ESOPs and imposed a financial penalty of ₹1 crore for non-compliance with its regulatory directives. This further adds to the mounting pressure on CHIL regarding transparency and corporate accountability.