Advocacy in the Age of AI: Courts Define Privilege, Executive Tests Legislative Boundaries

In a legal landscape grappling with the dual pressures of corporate integration and technological disruption, two significant developments have brought the fundamental principles of Indian law into sharp focus. The Supreme Court has unequivocally reinforced the traditional boundaries of legal practice by denying attorney-client privilege to in-house counsel, while the executive branch is testing the constitutional limits of its own power with proposed amendments to technology regulations aimed at combating AI-generated misinformation. Together, these events create a compelling narrative about the evolving roles and responsibilities within India's legal and regulatory framework, questioning who holds privilege and who holds power.

The Advocate's Privilege: Supreme Court Draws a Bright Line for In-House Counsel

In a landmark suo motu judgment, the Supreme Court has decisively settled a long-debated issue: not every lawyer is an advocate, and crucially, only advocates are entitled to statutory attorney-client privilege. A Bench led by Chief Justice BR Gavai and authored by Justice K Vinod Chandran clarified that salaried in-house counsel, while legally qualified, do not qualify as "advocates" under the Bharatiya Sakshya Adhiniyam (BSA) and are therefore not shielded by the privilege that protects communications with external legal counsel.

The ruling hinges on a foundational distinction embedded within the Advocates Act, 1961. The Court emphasized that the status of an "advocate" is conferred not by a law degree, but by enrolment with a State Bar Council and the active practice of law. This practice is governed by the Bar Council of India Rules, specifically Rule 49, which prohibits a full-time salaried employee from practising as an advocate.

"The fact of their regular employment with full salaries takes them away from the definition of an Advocate as defined under the Advocates Act, 1961,” the Court stated, grounding its decision in the nature of the professional relationship. An advocate's primary duty is to the court and the law, a role that demands absolute independence. An in-house counsel, by contrast, operates within a master-servant relationship, their allegiance primarily owed to their employer.

Independence as the Litmus Test

The judgment identifies professional independence as the core attribute separating a lawyer from an advocate. The Court drew parallels with international jurisprudence, citing the European Court of Justice’s decision in Akzo Nobel Ltd. v. European Commission (2010) , which held that an in-house lawyer lacks the “same degree of independence” as an external one. The Supreme Court adopted this reasoning, observing:

"An in-house counsel, though engaged in the job of advising his employer on questions of law, would even then be influenced by the commercial and business strategies pursued by his employer and would always be beholden to his employer and obliged to protect their interest."

This lack of independence, the Court reasoned, is precisely why the privilege under Section 132 of the BSA cannot extend to them. The privilege is not merely a client's right but a cornerstone of the justice system, designed to encourage candid communication with an independent professional who acts as an officer of the court. Consequently, the Court held, “In-house counsel will not be entitled to the privilege under Section 132 since they are not advocates practising in courts as spoken of in the BSA.”

While their communications are not privileged, they may find limited protection under Section 134 of the BSA, which covers confidential communications with a legal adviser. However, this distinction between statutory privilege and general confidentiality has profound implications for corporate India, potentially exposing internal legal advice to disclosure during investigations and litigation.

The Executive's Reach: IT Rules Amendments Challenge Delegated Power

While the judiciary clarified the limits of professional status, the executive is simultaneously pushing the boundaries of its rule-making authority. The Ministry of Electronics and Information Technology (MEITY) has proposed sweeping amendments to the Information Technology Rules, 2021, aimed at tackling the proliferation of AI-generated deepfakes and misinformation. While the objective is laudable, legal experts argue the proposed method dangerously oversteps the executive’s constitutional mandate.

The draft amendments, open for public comment until November 6, 2025, seek to impose substantive new obligations on social media intermediaries. These include a duty to ensure synthetically generated content is labeled, to verify user declarations about such content, and to disable access if these conditions are not met. Critics, including legal scholars Sidharth Chopra and Surabhi Pande, argue that these changes fundamentally alter the legal framework established by Parliament in the Information Technology Act, 2000.

Substantive Law vs. Procedural Rules

At the heart of the debate is the distinction between delegated legislation and substantive lawmaking. Section 87 of the IT Act empowers the government to make rules to implement the Act, not to rewrite its core principles. The Act’s Section 79 provides intermediaries with "safe harbour" from liability for third-party content, provided they remain neutral platforms and do not initiate, select, or modify the information transmitted.

The proposed amendments directly challenge this principle. By mandating intermediaries to verify and label content pre-publication, they are no longer neutral conduits but active moderators and gatekeepers. The draft attempts a legislative sleight of hand by including a proviso stating that such actions "shall not amount to a violation" of the neutrality conditions in Section 79. This, critics contend, is an impermissible attempt by the executive to redefine a term—"modification"—that has a clear statutory meaning given by Parliament. A delegated rule cannot override the parent Act it is meant to serve.

Constitutional Hierarchy and Pre-Censorship

This move raises deep constitutional questions. The power to create new legal obligations and alter liability frameworks is vested solely in the legislature, which is subject to public debate and democratic accountability. Allowing the executive to introduce such substantive changes through administrative rules circumvents this process, inverting the constitutional hierarchy of lawmaking.

Furthermore, the requirement for Significant Social Media Intermediaries (SSMIs) to verify content before it is displayed effectively establishes a system of pre-censorship. This form of prior restraint on speech is constitutionally suspect under Article 19(1)(a). Any restriction on free expression must be imposed "by law" enacted by Parliament, not by executive fiat. Imposing an ex-ante verification duty on private platforms, transforming them into adjudicators of content authenticity, goes far beyond the post-facto diligence regime envisioned by the IT Act.

A Tale of Two Powers: Judicial Restraint and Executive Assertion

These parallel developments offer a stark contrast in legal philosophy. The Supreme Court's judgment on in-house counsel is an act of judicial clarification, restoring a long-standing statutory distinction that had blurred over time. It reinforces the unique duties and privileges that come with the independent practice of law, reminding the corporate world that legal advice generated internally does not carry the same sacrosanct protection as that from an external advocate.

Conversely, the proposed IT Rules amendments represent an act of executive assertion, where a legitimate policy goal—fighting misinformation—is pursued through means that challenge the separation of powers. By attempting to legislate new duties under the guise of rule-making, the executive risks creating a framework that is not only ultra vires the parent Act but also constitutionally vulnerable.

For legal professionals, the implications are twofold. The Court's ruling demands a strategic reassessment of how corporate legal departments manage sensitive communications and when to engage external counsel to ensure privilege. Simultaneously, the debate over the IT Rules highlights the critical role of the legal community in defending constitutional boundaries against executive overreach, ensuring that the response to technological challenges remains anchored in the rule of law and legislative supremacy. As India navigates the complexities of the 21st century, the clear demarcation of roles—advocate and lawyer, executive and legislature—remains more critical than ever.