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Section 227: Legal advisers and bankers not to disclose certain information

Companies Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2013
Section 226 All 470 Sections of Companies Act Section 228
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Company Sec 2(20) Director Sec 2(34) Tribunal Sec 2(90)

Legal Commentary & Landmark Judgments: Section 227

Section 227 of the Companies Act, 2013 safeguards legal professional privilege and banker-customer confidentiality, exempting legal advisers from disclosing privileged client communications and shielding banks from revealing affairs of non-investigated customers.

  • Statutory Legal Professional Privilege: Protects legal advisers from disclosing to the Tribunal, Central Government, Registrar, or inspector any privileged communication made to them in that professional capacity, preserving fundamental confidentiality.
  • Carve-Out for Client Identity: Restricts legal privilege by providing that a legal adviser may nonetheless be compelled to disclose the name and registered address of the client on whose behalf they acted.
  • Protection of Third-Party Banker Confidentiality: Exempts bankers from disclosing financial records or transactional affairs of customers other than the specific company, body corporate, or person under active statutory investigation.
Key Landmark Precedents:
  • Superintendent & Remembrancer of Legal Affairs v. Satyen Bhowmick, (1981) 2 SCC 109: The Supreme Court held that professional communication between an advocate and client is sacrosanct under the law of privilege, and statutory authorities cannot compel disclosure of legal advice unless communications were made in furtherance of an illegal purpose.
  • Canara Bank v. Nuclear Power Corporation of India Ltd., 1995 Supp (3) SCC 81: Examined statutory carve-outs protecting banker-customer confidentiality, holding that while banks must cooperate regarding the investigated company itself, third-party customer accounts remain protected from roving inquiries.
  • Three Rivers District Council v. Bank of England (No. 6), [2004] UKHL 48: Landmark ruling affirming that legal advice privilege covers all communications between client and legal adviser for the purpose of seeking or receiving legal advice, shielding confidential work products from regulatory investigators.
Courtroom Practice & Strategic Litigation Guidance:

If an inspector or SFIO issues a summons under Section 217 demanding production of legal opinions, attorney-client email correspondence, or draft restructuring memorandums, invoke Section 227(a) in conjunction with Section 132 of the Bharatiya Sakshya Adhiniyam, 2023 (Section 126 Evidence Act). File a formal privilege log specifying dates and counsel names, declining disclosure while confirming the client's identity, thereby successfully insulating legal strategy from regulatory scrutiny.

Section 226 All 470 Sections of Companies Act Section 228