Sunday, June 1, 2014


SIT’s first meeting on black money to be held on June 2

PTI | May 30, 2014, 20.05 pm IST
New Delhi: The first high-level meeting of the Special Investigation Team (SIT) on the issue of black money and special probe into cases of unaccounted funds stashed away abroad by Indians has been advanced and will now be held on June 2.
Officials said the Department of Revenue under the Finance Ministry has finalised the date after rescheduling it from the earlier date of June 4 and invites have been sent to all the11 members of the SIT after obtaining the consent of the Chairman and retired Supreme Court judge M B Shah and Vice Chairman Justice (retd) Arijit Pasayat.
"The date of the meeting has been advanced to June 2. It will be held under the chairmanship of Justice Shah," a source privy to the development said.
The government had notified the creation of SIT on May 27 after the Supreme Court had last week granted it one week to constitute the high profile team comprising top bosses of the country's premier investigation, enforcement and intelligence agencies.
The meeting, sources said, is expected to discuss the policy matters on combating the menace of black money and the status of ongoing probes and available inputs with all the departments in this regard.
The officers who would form part of the SIT include Secretary of the Department of Revenue under the Ministry of Finance, a Deputy Governor of RBI, Intelligence Bureau Director, Director of Enforcement Directorate, Director CBI, CBDT Chairman and Director General Narcotics Control Bureau.
DG Directorate of Revenue Intelligence, Director Financial Intelligence Unit, Secretary Research and Analysis Wing and Joint Secretary (Foreign Tax and Tax Research) in the Finance Ministry will be its other members.
The terms of reference for the SIT stipulate that it "shall have jurisdiction over all the cases, where investigation has already commenced or pending or awaiting to be initiated or have completed" with regard to instances of black money and illicit funds generated and sent to overseas destination and tax haven nations.
The SIT, the terms of reference said, "Shall report to the court and shall inform the court of all major developments by filing periodic status reports from time to time and for this purpose, the Union of India shall accord all the necessary financial material, legal, diplomatic resources both inside and outside the country to the SIT."
Judgement of Supreme Court 4 July 2011 on Indian Black Money supremecourt/imgst.aspx? filename=38154



            WRIT PETITION (CIVIL) NO. 176  OF 2009

RAM JETHMALANI & ORS.                                        ...PETITIONERS


UNION OF INDIA & ORS.                               ...RESPONDENTS


                             I.A.NO.1  OF 2009

                           O R D E R


      "Follow   the   money"   was   the   short   and   simple   advice

given   by   the   secret   informant,   within   the   American

Government,   to   Bob   Woodward,   the   journalist   from

Washington   Post,   in   aid   of   his   investigations   of   the

Watergate Hotel break in. Money has often been claimed, by

economists, to only be a veil that covers the real value and

the economy. As a medium of exchange, money is vital for

the   smooth   functioning   of   exchange   in   the   market   place.


However, increasing monetization of most social transactions

has   been   viewed   as   potentially   problematic   for   the   social

order, in as much as it signifies a move to evaluating value,

and   ethical   desirability,   of   most   areas   of   social   interaction

only in terms of price obtained in the market place.

2. Price   based   notions   of   value   and   values,   as   propounded

   by   some   extreme   neo-liberal   doctrines,   implies   that   the

   values   that   ought   to   be   promoted,   in   societies,   are   the

   ones   for   which   people   are   willing   to   pay   a   price   for.

   Values, and social actions, for which an effective demand

   is not expressed in the market, are neglected, even if lip

   service is paid to their essentiality. However, it cannot be

   denied that not everything that can be, and is transacted,

   in   the   market   for   a   price   is   necessarily   good,   and

   enhances  social  welfare.  Moreover,  some  activities,  even

   if costly and without being directly measurable in terms of

   exchange value, are to be rightly viewed as essential. It is

   a well established proposition, of political economy, and of

   statecraft,   that   the   State   has   a   necessary   interest   in

   determining,   and   influencing,   the   kinds   of   transactions,

   and  social  actions,   that   occur  within  a   legal   order.   From

   prevention of certain kinds of harmful activities, that may

   range   from   outright   crimes,   to   regulating   or   controlling,

   and   consequently   mitigating,   socially   harmful   modes   of

   social and economic production, to promotion of activities


   that   are   deemed   to   be   of   higher   priority,   than   other

   activities   which   may   have   a   lower   priority,   howsoever

   evaluated   in   terms   of   social   utility,   are   all   the

   responsibilities   of   the   State.   Whether   such   activities   by

   the State result  in directly  measurable  benefits  or  not is

   often   not   the  most   important   factor   in  determining   their

   desirability;   their   absence,   or   their   substantial

   evisceration, are to be viewed as socially destructive.

3. The   scrutiny,   and   control,   of   activities,   whether   in   the

   economic, social or political contexts, by the State, in the

   public interest as posited by modern constitutionalism, is

   substantially   effectuated   by   the   State   "following   the

   money." In modern societies very little gets accomplished

   without transfer of money. The incidence of crime, petty

   and   grand,   like   any   other   social   phenomena   is   often

   linked   to   transfers   of   monies,   small   or   large.   Money,   in

   that   sense,   can   both   power,   and   also   reward,   crime.   As

   noted by many scholars, with increasing globalization, an

   ideological   and   social   construct,   in   which   transactions

   across   borders   are  accomplished   with  little  or   no   control

   over   the   quantum,   and   mode   of   transfers   of   money   in

   exchange   for   various   services   and   value   rendered,   both

   legal   and   illegal,   nation-states   also   have   begun   to

   confront   complex   problems   of   cross-border   crimes   of   all

   kinds.   Whether   this   complex   web   of   flows   of   funds,


  instantaneously, and  in  large sums  is good or bad, from

  the perspective of lawful and desired transactions is not at

  issue in the context of the matters before this Court.

4. The worries of this Court that arise, in the context of the

  matters placed before us, are with respect to transfers of

  monies,   and   accumulation   of   monies,   which   are

  unaccounted   for   by   many   individuals   and   other   legal

  entities   in   the   country,   in   foreign   banks.   The   worries   of

  this   Court   relate   not   merely   to   the   quantum   of   monies

  said   to   have   been   secreted   away   in   foreign   banks,   but

  also the manner in which they may have been taken away

  from   the   country,   and   with   the   nature   of   activities   that

  may  have engendered  the accumulation  of such  monies.

  The   worries   of   this   Court   are   also   with   regard   to   the

  nature of activities that such monies may engender, both

  in terms of the concentration of economic power, and also

  the   fact   that   such   monies   may   be   transferred   to   groups

  and individuals who may use them for unlawful activities

  that   are   extremely   dangerous   to   the   nation,   including

  actions   against  the   State.  The   worries   of   this   Court  also

  relate   to   whether   the   activities   of   engendering   such

  unaccounted   monies,   transferring   them   abroad,   and   the

  routing them back to India may not actually be creating a

  culture   that   extols   the   virtue   of   such   cycles,   and   the

  activities   that   engender   such   cycles   are   viewed   as


  desirable   modes   of   individual   and   group   action.   The

  worries   of   this   court   also   relate   to   the   manner,   and   the

  extent to which such cycles are damaging to both national

  and   international   attempts   to   combat   the   extent,   nature

  and intensity of cross-border criminal activity. Finally, the

  worries of this Court are also with respect to the extent of

  incapacities,   system   wide,   in   terms   of   institutional

  resources,   skills,   and   knowledge,   as   well   as   about

  incapacities of ethical nature, in keeping an account of the

  monies generated by various facets of social action in the

  country, and thereby developing effective mechanisms of

  control.   These   incapacities   go   to   the   very   heart   of

  constitutional   imperatives   of   governance.   Whether   such

  incapacities are on account of not having devoted enough

  resources towards building such capacities, or on account

  of   a   broader   culture   of   venality   in   the   wider   spheres   of

  social and political action, they run afoul of constitutional


5. Large   amounts   of   unaccounted   monies,   stashed   away   in

  banks located in jurisdictions that thrive on strong privacy

  laws   protecting   bearers   of   those   accounts   to   avoid

  scrutiny,   raise   each   and   every   worry   delineated   above.

  First   and   foremost,   such   large   monies   stashed   abroad,

  and   unaccounted   for   by   individuals   and   entities   of   a

  country,   would   suggest   the   necessity   of   suspecting   that


  they   have   been   generated   in   activities   that   have   been

  deemed to be unlawful. In addition, such large amounts of

  unaccounted   monies   would   also   lead   to   a   natural

  suspicion   that   they   have   been   transferred   out   of   the

  country   in   order   to   evade   payment   of   taxes,   thereby

  depleting   the   capacity   of   the   nation   to   undertake   many

  tasks that are in public interest.

6. Many schools of thought exist with regard to the primary

  functions of the State, and the normative expectations of

  what   the   role   of   the   State   ought   to   be.   The   questions

  regarding   which   of   those   schools   provide   the   absolutely

  correct view cannot be the criteria to choose or reject any

  specific   school   of   thought   as   an   aid   in   constitutional

  adjudication. Charged with the responsibility of having to

  make   decisions   in   the   present,   within   the   constraints   of

  epistemic   frailties   of   human   knowledge,   constitutional

  adjudicators willy-nilly are compelled to choose those that

  seem to provide a reasoned basis for framing of questions

  relevant,   both   with   respect   to   law,   and   to   facts.

  Institutional economics gives one such perspective which

  may   be   a   useful   guide   for   us   here.   Viewed   from   a

  functional perspective, the State, and governments, may

  be seen as coming into existence in order to solve, what

  institutional   economists   have   come   to   refer   to   as,   the

  coordination   problems   in   providing   public   goods,   and


  prevent the disutility that emerges from the moral hazard

  of   a   short   run   utility   maximizer,   who   may   desire   the

  benefits of goods and services that are to be provided in

  common   to   the   public,   and   yet   have   the   interest   of   not

  paying for their production.

7. Security   of   the   nation,   infrastructure   of   governance,

  including those that relate to law making and law keeping

  functions,   crime   prevention,   detection   and   punishment,

  coordination of the economy, and ensuring minimal levels

  of material, and cultural goods for those who may not be

  in a position to fend for themselves or who have been left

  by   the   wayside   by   the   operation   of   the   economy   and

  society, may all be cited as some examples of the kinds of

  public goods that the State is expected to provide for, or

  enable   the   provision   of.   In   as   much   as   the   market   is

  primarily   expected   to   cater   to   purely   self   centered

  activities   of   individuals   and   groups,   markets   and   the

  domain of purely  private social action significantly  fail to

  provide   such   goods.   Consequently,   the   State,   and

  government, emerges to rectify the coordination problem,

  and provide the public goods.

8. Unaccounted   monies,   especially   large   sums   held   by

  nationals and entities with a legal presence in the nation,

  in   banks   abroad,   especially   in   tax   havens   or   in

  jurisdictions with a known history of silence about sources


of monies, clearly indicate a compromise of the ability of

the State to manage its affairs in consonance with what is

required   from   a   constitutional   perspective.   This   is   so   in

two respects. The quantum of such monies by itself, along

with the numbers of individuals or other legal entities who

hold such monies, may indicate in the first instance that a

large volume of activities, in the social and the economic

spheres within the country are unlawful and causing great

social   damage,   both   at   the   individual   and   the   collective

levels. Secondly, large quanta of monies stashed abroad,

would also indicate a substantial weakness in the capacity

of  the State  in  collection   of taxes  on   incomes  generated

by individuals and other legal entities within the country.

The generation of such revenues is essential for the State

to undertake the various public goods and services that it

is constitutionally mandated, and normatively expected by

its   citizenry,   to   provide.   A   substantial   degree   of

incapacity,   in   the   above   respect,   would   be   an   indicia   of

the degree of failure of the State; and beyond a particular

point, the State may spin into a vicious cycle of declining

moral authority, thereby causing the incidence of unlawful

activities   in   which   wealth   is   sought   to   be   generated,   as

well   as   instances   of   tax   evasion,   to   increase   in   volume

and in intensity.


9. Consequently,   the   issue   of   unaccounted   monies   held   by

  nationals, and other legal entities, in foreign banks, is of

  primordial  importance to the welfare  of the  citizens.  The

  quantum of such monies may  be rough indicators  of the

  weakness of the State, in terms of both crime prevention,

  and   also   of   tax   collection.   Depending   on   the   volume   of

  such monies, and the number of incidents through which

  such   monies   are   generated   and   secreted   away,   it   may

  very well reveal the degree of "softness of the State."

10.The concept of a "soft state" was famously articulated by

  the   Nobel   Laureate,   Gunnar   Myrdal.   It   is   a   broad   based

  assessment   of   the   degree   to   which   the   State,   and   its

  machinery, is equipped to deal with its responsibilities of

  governance.   The   more   soft   the   State   is,   greater   the

  likelihood that there is an unholy nexus between the law

  maker, the law keeper, and the law breaker.

11.When a catchall word like "crimes" is used, it is common

  for   people,   and   the   popular   culture   to   assume   that   it   is

  "petty   crime,"   or   crimes   of   passion   committed   by

  individuals. That would be a gross mischaracterization of

  the   seriousness   of   the   issues   involved.   Far   more

  dangerous are the crimes that threaten national security,

  and   national   interest.   For   instance,   with   globalization,

  nation   states   are   also   confronted   by   the   dark   worlds   of

  international   arms   dealers,   drug   peddlers,   and   various


  kinds   of   criminal   networks,   including   networks   of   terror.

  International   criminal   networks   that   extend   support   to

  home-grown   terror   or   extremist   groups,   or   those   that

  have   been   nurtured   and   sustained   in   hostile   countries,

  depend   on   networks   of   formal   and   informal,   lawful   and

  unlawful   mechanisms   of   transfer   of   monies   across

  boundaries  of nation-states.  They  work  in  the  interstices

  of   the   micro-structures   of   financial   transfers   across   the

  globe,  and  thrive  in  the   lacunae,  the gaps in  law  and  of

  effort. The loosening of control over those mechanisms of

  transfers,   guided   by   an   extreme   neo-liberal   thirst   to

  create   a  global   market   that   is   free   of   the   friction   of  law

  and   its   enforcement,   by   nation-states,   may   have   also

  contributed   to   an   increase   in   the   volume,   extent   and

  intensity   of   activities   by   criminal   and   terror   networks

  across the globe.

12.Increasingly, on account of "greed is good" culture that

  has   been   promoted   by   neo-liberal   ideologues,   many

  countries face the situation where the model of capitalism

  that the State is compelled to institute, and the markets it

  spawns,   is   predatory   in   nature.   From   mining   mafias   to

  political   operators   who,   all   too   willingly,   bend   policies   of

  the   State   to   suit   particular   individuals   or   groups   in   the

  social   and   economic   sphere,   the   raison   d'etre   for

  weakening the capacities and intent to enforce the laws is


  the  lure  of  the  lucre.   Even   as   the   State   provides  violent

  support   to   those   who   benefit   from   such   predatory

  capitalism, often violating the human rights of its citizens,

  particularly it's poor, the market begins to function like a

  bureaucratic machine dominated by big business; and the

  State begins to function like the market, where everything

  is available for sale at a price.

13.The paradigm of governance that has emerged, over the

  past three decades, prioritizes the market, and its natural

  course, over any degree of control of it by the State. The

  role   for   the   State   is   visualized   by   votaries   of   the   neo-

  liberal   paradigm   as   that   of   a   night   watchman;   and

  moreover it is also expected to take its hands out of the

  till   of   the   wealth   generating   machinery.   Based   on   the

  theories of Arthur Laffer, and pushed by the Washington

  Consensus, the prevailing wisdom of the elite, and of the

  policy   makers,   is   that   reduction   of   tax   rates,   thereby

  making   tax   regimes   regressive,   would   incentivise   the

  supposed   genius   of   entrepreneurial   souls   of   individuals,

  actuated   by   pursuit   of   self-interest   and   desire   to

  accumulate   great   economic   power.   It   was   expected   that

  this   would   enable   the   generation   of   more   wealth,   at   a

  more rapid pace, thereby enabling the State to generate

  appropriate   tax   revenues   even   with   lowered   tax   rates.

  Further, benefits were also expected in moral terms - that


  the   lowering  of   tax  rates   would   reduce  the   incentives   of

  wealth   generators   to   hide   their   monies,   thereby   saving

  them   from   the   guilt   of   tax   evasion.   Whether   that   is   an

  appropriate model of social organization or not, and from

  the   perspective   of   constitutional   adjudication,   whether   it

  meets the requirements of constitutionalism as embedded

  in the texts of various constitutions, is not a question that

  we want to enter in this matter.

14.Nevertheless, it would be necessary to note that there is

  a   fly   in   the   ointment   of   the   above   story   of   friction   free

  markets that would always clear, and always work to the

  benefit   of   the   society.   The   strength   of   tax   collection

  machinery   can,   and   ought   to   be,   expected   to   have   a

  direct bearing on the revenues  collected  by the State. If

  the   machinery   is   weak,   understaffed,   ideologically

  motivated to look the other way, or the agents motivated

  by   not   so   salubrious   motives,   the   amount   of   revenue

  collected by the State would decline, stagnate, or may not

  generate the revenue for the State that is consonant with

  its responsibilities. From within the neo-liberal paradigm,

  also   emerged   the   under-girding   current   of   thought   that

  revenues   for   the   State   implies   a   big   government,   and

  hence   a   strong   tax   collecting   machinery   itself   would   be

  undesirable. Where the elite lose out in democratic politics

  of   achieving   ever   decreasing   tax   rates,   it   would   appear


   that  state  machineries  in  the   hands  of the  executive,  all

   too   willing   to   promote   the   extreme   versions   of   the   neo-

   liberal paradigm and co-opt itself in the enterprises of the

   elite,   may   also   become   all   too   willing   to   not   develop

   substantial   capacities   to   monitor   and   follow   the   money,

   collect   the   lawfully   mandated   taxes,   and   even   look   the

   other   way.   The   results,   as   may   be   expected,   have   been

   disastrous across many nations.

15.In   addition,   it   would   also   appear   that   in   this   miasmic

   cultural   environment   in   which   greed   is   extolled,

   conspicuous   consumption   viewed   as   both   necessary   and

   socially   valuable,   and   the   wealthy   viewed   as   demi-gods,

   the agents of the State may have also succumbed to the

   notions   of   the   neo-liberal   paradigm   that   the   role   of   the

   State ought to only be an enabling one, and not exercise

   significant   control.   This   attitude  would   have   a  significant

   impact on exercise of discretion, especially in the context

   of   regulating   economic   activities,   including   keeping   an

   account   of   the   monies   generated   in   various   activities,

   both   legal   and   illegal.   Carried   away   by   the   ideology   of

   neo-liberalism, it is entirely possible that the agents of the

   State entrusted with the task of supervising the economic

   and social activities may err more on the side of extreme

   caution, whereby signals of wrong doing may be ignored

   even when they are strong. Instances of the powers that


   be ignoring publicly visible stock market scams, or turning

   a blind eye to large scale illegal mining have become all

   too familiar, and may be readily cited. That such activities

   are   allowed   to   continue   to   occur,   with   weak,   or   non-

   existent,   responses   from   the   State   may,   at   best,   be

   charitably ascribed to this broader culture of permissibility

   of all manner of private activities in search of ever more

   lucre. Ethical compromises, by the elite - those who wield

   the powers of the state, and those who fatten themselves

   in   an   ever   more   exploitative   economic   sphere-   can   be

   expected   to  thrive   in   an   environment   marked   by  such   a

   permissive attitude, of weakened laws, and of weakened

   law enforcement machineries and attitudes.

16.To   the   above,   we   must   also   add   the   fragmentation   of

   administration. Even as the range of economic, and social

   activities   have   expanded,   and   their   sophistication

   increased by leaps and bounds, the response in terms of

   administration by the State has been to create ever more

   specialized   agencies,   and   departments.   To   some   degree

   this   has   been   unavoidable.   Nevertheless,   it   would   also

   appear that there is a need to build internal capacities to

   share   information   across   such   departments,   lessen   the

   informational asymmetries between, and friction to flow of

   information   across   the   boundaries   of   departments   and

   agencies, and reduce the levels of consequent problems in


  achieving coordination. Life, and social action within which

  human life becomes possible, do not proceed on the basis

  of   specialized   fiefdoms   of   expertise.  They   cut   across  the

  boundaries   erected   as   a   consequence   of   an   inherent

  tendency   of   experts   to   specialize.   The   result,   often,   is   a

  system   wide   blindness,   while   yet   being   lured   by   the

  dazzle   of   ever   greater   specialization.   Many   dots   of

  information,   now   collected   in   ever   increasing   volume   by

  development   of   sophisticated   information   technologies,

  get   ignored   on   account   of   lack   of   coordination   across

  agencies,   and   departments,   and   tendency   within

  bureaucracy   to   jealously   guard   their   own   turfs.   In   some

  instances,   the   failure   to   properly   investigate,   or   to

  prevent,   unlawful   activities   could   be   the   result   of   such

  over-specialization, frictions in sharing of information, and

  coordination   across   departmental   and   specialized   agency


17.If the State is soft to a large extent, especially in terms

  of   the   unholy   nexus   between   the   law   makers,   the   law

  keepers,  and  the   law breakers,  the moral  authority,  and

  also the moral incentives, to exercise suitable control over

  the   economy   and   the   society   would   vanish.   Large

  unaccounted monies are generally an indication of that. In

  a recent book, Prof. Rotberg states, after evaluating many

  failed and collapsed states over the past few decades:


        "Failed   states   offer   unparalleled   economic   opportunity

        - but only for a privileged few. Those around the ruler

        or ruling oligarchy grow richer while their less fortunate

        brethren starve. Immense profits are available from an

        awareness   of   regulatory   advantages   and   currency

        speculation  and arbitrage. But the  privilege of making

        real   money   when   everything   else   is   deteriorating   is

        confined   to   clients   of   the   ruling   elite....   The   nation-

        state's   responsibility   to   maximize   the   well-being   and

        prosperity of all its citizens is conspicuously absent, if it

        ever   existed....   Corruption   flourishes   in   many   states,

        but   in   failed   states   it   often   does   so   on   an   unusually

        destructive   scale.   There   is   widespread   petty   or

        lubricating   corruption   as   a   matter   of   course,   but

        escalating   levels   of   venal   corruption   mark   failed

        states." 1

18.India finds itself in a peculiar situation. Often celebrated,

    in popular culture, as an emerging economy that is rapidly

    growing,   and   expected   to   be   a   future   economic   and

    political   giant   on   the   global   stage,   it   is   also   popularly

    perceived,  and  apparently  even  in  some  responsible  and

    scholarly   circles,   and   official   quarters,   that   some   of   its

    nationals and other legal entities have stashed the largest

    quantum   of   unaccounted   monies   in   foreign   banks,

    especially   in   tax   havens,   and   in   other   jurisdictions   with

    strong laws of secrecy. There are also apparently reports,

    and   analyses,   generated   by   Government   of   India   itself,

1  "The Failure and Collapse of Nation-States - Breakdown, Prevention and Repair" in "WHEN STATES

FAIL: CAUSES AND CONSEQUENCES", Rotberg, Robert I., Ed. Princeton University Press (2004).


  which place the amounts of such unaccounted monies at

  astronomical levels.

19.We do not wish to engage in any speculation as to what

  such   analyses,  reports,  and   factuality   imply  with  respect

  to the state of the nation. The citizens of our country can

  make,   and   ought   to   be   making,   rational   assessments   of

  the   situation.   We   fervently   hope   that   it   leads   to

  responsible,   reasoned   and   reasonable   debate,   thereby

  exerting   the   appropriate   democratic   pressure   on   the

  State, and its agents, within the constitutional framework,

  to  bring   about   the  necessary   changes   without  sacrificing

  cherished,   and   inherently   invaluable   social   goals   and

  values   enshrined   in   the   Constitution.   The   failures   are

  discernible   when   viewed   against   the   vision   of   the

  constitutional   project,   and   as   forewarned   by   Dr.

  Ambedkar, have been on account of the fact that man has

  been vile, and not the defects of a Constitution forged in

  the   fires   of   wisdom   gathered   over   eons   of   human

  experience.   If   the   politico-bureaucratic,   power   wielding,

  and   business   classes   bear   a   large   part   of   the   blame,   at

  least some part of blame ought to be apportioned to those

  portions   of   the   citizenry   that   is   well   informed,   or   is

  expected   to   be   informed.   Much   of   that   citizenry   has

  disengaged  itself  with  the  political  process,  and  with  the

  masses.   Informed   by   contempt   for   the   poor   and   the


  downtrodden,   the   elite   classes   that   have   benefited   the

  most,   or   expects   to   benefit   substantially   from   the   neo-

  liberal policies that would wish away the hordes, has also

  chosen   to   forget   that   constitutional   mandate   is   as   much

  the   responsibility   of   the   citizenry,   and   through   their

  constant   vigilance,   of   all   the   organs   of   the   state,   and

  national   institutions   including   political   parties.   To   not   be

  engaged   in   the   process,   is   to   ensure   the   evisceration   of

  constitutional content. Knee jerk reactions, and ill advised

  tinkering   with   the   constitutional   framework   are   not   the

  solutions. The road is always long, and needs the constant

  march   of   the   citizenry   on   it.   There   is   no   other   way.   To

  expect instant solutions, because this law or that body is

  formed,   without   striving   to   solve   system   wide,   and

  systemic,   problems   that   have   emerged   is   to   not

  understand   the   demands   of   a   responsible   citizenry   in

  modern constitutional republican democracies.

20.These matters before us relate to issues of large sums of

  unaccounted   monies,   allegedly   held   by   certain   named

  individuals, and loose associations of them; consequently

  we   have   to   express   our   serious   concerns   from   a

  constitutional   perspective.   The   amount   of   unaccounted

  monies,   as   alleged   by   the   Government   of   India   itself   is

  massive.   The   show   cause   notices   were   issued   a

  substantial   length   of   time   ago.   The   named   individuals


  were very much present in the country. Yet, for unknown,

  and   possibly   unknowable,   though   easily   surmisable,

  reasons the investigations into the matter proceeded at a

  laggardly   pace.   Even   the   named   individuals   had   not   yet

  been   questioned   with   any   degree   of   seriousness.   These

  are   serious   lapses,   especially   when   viewed   from   the

  perspective of larger issues of security, both internal and

  external, of the country.

21.It is in light of the above, that we heard some significant

  elements   of   the   instant   writ   petitions   filed   in   this   Court,

  and   at   this   stage   it   is   necessary   that   appropriate   orders

  be   issued.   There   are   two   issues   we   deal   with   below:   (i)

  the appointment of a Special Investigation Team; and (ii)

  disclosure, to the Petitioners, of certain documents relied

  upon by the Union of India in its response.


22.The instant writ petition was filed, in 2009, by Shri. Ram

  Jethmalani,   Shri.   Gopal   Sharman,   Smt.   Jalbala   Vaidya,

  Shri.   K.P.S.   Gill,   Prof.   B.B.   Dutta,   and   Shri.   Subhash

  Kashyap,   all   well   known   professionals,   social   activists,

  former   bureaucrats   or   those   who   have   held   responsible

  positions   in   the   society.   They   have   also   formed   an

  organization   called   Citizen   India,   the   stated   objective   of


   which is said to be to bring about changes and betterment

   in the quality of governance, and functioning of all public


23.The   Petitioners   state   that   there   have   been   a   slew   of

   reports,   in   the   media,   and   also   in   scholarly   publications

   that   various   individuals,   mostly   citizens,   but   may   also

   include   non-citizens,   and   other   entities   with   presence   in

   India, have generated, and secreted away large sums of

   monies,   through   their   activities   in   India   or   relating   to

   India, in various foreign banks, especially in tax havens,

   and   jurisdictions   that   have   strong   secrecy   laws   with

   respect   to   the   contents   of   bank   accounts   and   the

   identities   of   individuals   holding   such   accounts.   The

   Petitioners   allege   that   most   of   such   monies   are

   unaccounted,   and   in   all   probability   have  been  generated

   through   unlawful   activities,   whether   in   India   or   outside

   India,   but   relating   to   India.   Further,   the   Petitioners   also

   allege   that   a   large   part   of   such   monies   may   have   been

   generated  within  India,  and  have  been taken away  from

   India, breaking various laws, including but not limited to

   evasion of taxes.

24.The   Petitioners   contend:   (i)   that   the   sheer   volume   of

   such   monies   points   to   grave   weaknesses   in   the

   governance   of   the   nation,   because   they   indicate   a

   significant lack of control over unlawful activities through


   which such monies are generated, evasion of taxes, and

   use of unlawful means of transfer of funds; (ii) that these

   funds are then laundered and brought back into India, to

   be   used   in   both   legal   and   illegal   activities;   (iii)   that   the

   use of various unlawful modes of transfer of funds across

   borders,   gives   support   to   such   unlawful   networks   of

   international   finance;   and   (iv)   that   in   as   much   as   such

   unlawful   networks   are   widely   acknowledged   to   also

   effectuate   transfer   of   funds   across   borders   in   aid   of

   various crimes committed against persons and the State,

   including   but   not   limited   to   activities   that   may   be

   classifiable   as   terrorist,   extremist,   or   unlawful   narcotic

   trade,   the   prevailing   situation   also   has   very   serious

   connotations for the security and integrity of India.

25.The   Petitioners   also   further   contend   that   a   significant

   part of such large unaccounted monies include the monies

   of   powerful   persons   in   India,   including   leaders   of   many

   political   parties.   It   was   also   contended   that   the

   Government   of   India,   and   its   agencies,   have   been   very

   lax   in   terms   of   keeping   an   eye   on   the   various   unlawful

   activities generating unaccounted monies, the consequent

   tax   evasion;   and   that   such   laxity   extends   to   efforts   to

   curtail the flow of such funds out, and into, India. Further,

   the Petitioners also contend that the efforts to prosecute

   the   individuals,   and   other   entities,   who   have   secreted


   such   monies   in   foreign   banks,   have   been   weak   or   non-

   existent.   It   was   strongly   argued   that   the   efforts   at

   identification of such monies in various bank accounts in

   many   jurisdictions   across   the   globe,   attempts   to   bring

   back   such   monies,   and   efforts   to   strengthen   the

   governance framework to prevent further outflows of such

   funds, have been sorely lacking.

26.The   Petitioners   also   made   allegations   about   certain

   specific   incidents   and   patterns   of   dereliction   of   duty,

   wherein   the   Government   of   India,   and   its   various

   agencies, even though in possession of specific knowledge

   about   the   monies   in   certain   bank   accounts,   and   having

   estimated   that   such   monies   run   into   many   scores   of

   thousands   of   crores,   and   upon   issuance   of   show   cause

   notices   to   the   said   individual,   surprisingly   have   not

   proceeded   to   initiate,   and   carry   out   suitable

   investigations,   and   prosecute   the   individuals.   The

   individual specifically named is one Hassan Ali Khan. The

   Petitioners also contended that Kashinath Tapuria, and his

   wife   Chandrika   Tapuria,   are   also   party   to   the   illegal

   activities of Hassan Ali Khan.

27.Specifically,   it   was   alleged   that   Hassan   Ali   Khan   was

   served   with   an   income   tax   demand   for   Rs.   40,000.00

   Crores   (Rupees   Forty   Thousand   Crores),   and   that   the

   Tapurias were served an income tax demand notice of Rs.


20,580.00   Crores   (Rupees   Twenty   Thousand   and   Five

Hundred   and   Eighty   Crores).   The   Enforcement

Directorate,  in 2007, disclosed that Hassan Ali Khan had

"dealings   amounting   to   1.6   billion   US   dollars"   in   the

period 2001-2005. In January 2007, upon raiding Hassan

Ali's   residence   in   Pune,   certain   documents   and   evidence

had   been   discovered   regarding   deposits   of   8.04   billion

dollars with UBS bank in Zurich. It is the contention of the

Petitioners that, even though such evidence was secured

nearly four and half years ago, (i) a proper investigation

had   not   been   launched   to   obtain   the   right   facts   from

abroad; (ii) the individuals  concerned, though present in

India, and subject to its jurisdiction, and easily available

for   its   exercise,   had   not   even   been   interrogated

appropriately; (iii) that the Union of India, and its various

departments,   had   even   been   refusing   to   divulge   the

details and information that would reveal the actual status

of   the   investigation,   whether   in   fact   it   was   being

conducted at all, or with any degree of seriousness; (iv)

given the magnitude of amounts in question, especially of

the   demand   notice   of   income   tax,   the   laxity   of

investigation   indicates   multiple   problems   of   serious   non-

governance,   and   weaknesses   in   the   system,   including

pressure from political quarters to hinder, or scuttle, the

investigation,   prosecution,   and   ultimately   securing   the


  return of such monies; and (v) given the broadly accepted

  fact   that   within   the   political   class   corruption   is   rampant,

  ill-begotten  wealth has begun  to be amassed in massive

  quantities   by   many   members   in   that   class,   it   may   be

  reasonable   to   suspect,   or   even   conclude,   that

  investigation   was   being   deliberately   hindered   because

  Hassan   Ali   Khan,   and   the   Tapurias,   had   or   were

  continuing to handle the monies of such a class. The fact

  that   both   Income   Tax   department,   and   the   Enforcement

  Directorate  routinely,   and   with   alacrity,   seek   the   powers

  for long stretches of custodial interrogation of even those

  suspected   of   having   engaged   in   money   laundering,   or

  evaded taxes, with respect to very small amounts, ought

  to   raise   the   reasonable   suspicion   that   inaction   in   the

  matters   concerning   Hassan   Ali   Khan,   and   Tapurias,   was

  deliberately engineered, for nefarious reasons.

28.In addition, the Petitioners also state that in as much as

  the   bank   in   which   the   monies   had   been   stashed   by

  Hassan Ali Khan was UBS Zurich, the needle of suspicion

  has   to   inexorably  turn   to  high   level   political  interference

  and hindrance to the investigations. The said bank, it was

  submitted,   is   the   biggest   or   one   of   the   biggest   wealth

  management companies in the world. The Petitioners also

  narrated the mode, and the manner, in which the United

  States   had   dealt   with   UBS,   with   respect   to   monies   of


  American   citizens   secreted   away   with   the   said   bank.   It

  was   also   alleged   that   UBS   had   not   cooperated   with   the

  U.S.   authorities.   Contrasting   the   relative   alacrity,   and

  vigour,   with   which   the   United   States   government   had

  pursued the matters, the Petitioners contend the inaction

  of Union of India is shocking.

29.The Petitioners further  allege that in 2007, the Reserve

  Bank   of   India   had   obtained   some   "knowledge   of   the

  dubious character" of UBS Security India Private Limited,

  a   branch   of   UBS,   and   consequently   stopped   this   bank

  from   extending   its   business   in   India   by   refusing   to

  approve its takeover of Standard Chartered Mutual Funds

  business   in   India.   It   was  also   claimed   by  the   Petitioners

  that   the  SEBI  had  alleged  that  UBS  played  a role  in   the

  stock   market   crash   of   2004.   The   said   UBS   Bank   has

  apparently   applied   for   a   retail   banking   license   in   India,

  which was approved in principle by RBI initially. In 2008,

  this license was withheld on the ground that "investigation

  of   its   unsavoury   role   in   the   Hassan   Ali   Khan   case   was

  pending   investigation   in   the   Enforcement   Directorate."

  However,   it   seems   that   the   RBI   reversed   its   decision   in

  2009,   and   no   good   reasons   seem   to   be   forthcoming   for

  the reversal of the decision of 2008.

30.The Petitioners contend that such a reversal of decision

  could   only   have   been   accomplished   through   high   level


  intervention,   and   that   it   is   further   evidence   of   linkages

  between members of the political class, and possibly even

  members   of   the   bureaucracy,   and   such   banking

  operations,   and   the   illegal   activities   of   Hassan   Ali   Khan

  and   the   Tapurias.   Hence,   the   Petitioners   argued,   in   the

  circumstances   it  would   have  to  be   necessarily   concluded

  that the investigations into the affairs of Hassan Ali Khan,

  and  the  Tapurias,  would  be  severely   compromised  if  the

  Court   does   not   intervene,   and   monitor   the   investigative

  processes   by   appointing   a   special   investigation   team

  reporting directly to the Court.

31.The learned senior counsel for the Petitioners sought that

  this   Court   intervene,   order   proper   investigations,   and

  monitor   continuously,   the   actions   of   the   Union   of   India,

  and any and all governmental departments and agencies,

  in these matters. It was submitted that their filing of this

  Writ Petition under Article 32 is proper, as the inaction of

  the   Union   of   India,   as   described   above,   violates   the

  fundamental rights - to proper governance, in as much as

  Article  14 provides for equality before the law and equal

  protection   of   the   law,  and   Article   21   promises   dignity   of

  life to all citizens.

32.We   have   heard   the   learned   senior   counsel   for   the

  Petitioners,   Shri.   Anil   B.     Divan,   the   learned   senior

  counsel   for   interveners,   Shri.   K.K.   Venugopal,   and   the


   learned senior counsel for the petitioners in the connected

   Writ   Petition,   Shri.   Shanti   Bhushan.   We   have   also   heard

   the   learned   Solicitor   General,   Shri.   Gopal   Subramaniam,

   on behalf of the respondents.

33.Shri. Divan, specifically argued that, having regard to the

   nature of the investigation, its slow pace so far, and the

   non-seriousness on the part of the respondents, there is a

   need   to   constitute   a   Special   Investigation   Team   ("SIT")

   headed by a former judge or two of this court. However,

   this particular plea has been vociferously resisted by the

   Solicitor General. Relying on the status reports submitted

   from   time   to   time,   the   learned   Solicitor   General   stated

   that all possible steps were being taken to bring back the

   monies   stashed   in   foreign   banks,   and   that   the

   investigations   in   cases   registered   were   proceeding   in   an

   appropriate   manner.   He   expressed   his   willingness   for   a

   Court  monitored  investigation.  He  also   further  submitted

   that   the   Respondents,   in   principle,   have   no   objections

   whatsoever   against   the   main   submissions   of   the


34.The   real   point   of   controversy   is,   given   above,   as   to

   whether there is a need to constitute a SIT to be headed

   by   a   judge   or   two,   of   this   court,   to   supervise   the



35.We   must   express   our   serious   reservations   about   the

   responses   of   the   Union   of   India.   In   the   first   instance,

   during   the   earlier   phases   of   hearing   before   us,   the

   attempts were clearly evasive, confused, or originating in

   the   denial   mode.   It   was   only   upon   being   repeatedly

   pressed by us did the Union of India begin to admit that

   indeed   the   investigation   was   proceeding   very   slowly.   It

   also became clear to us that in fact the investigation had

   completely   stalled,  in   as   much  as   custodial   interrogation

   of   Hassan   Ali   Khan   had   not   even   been   sought   for,   even

   though   he   was   very   much   resident   in   India.   Further,   it

   also now appears that even though his passport had been

   impounded, he was able to secure another passport from

   the   RPO   in   Patna,   possibly   with   the   help   or   aid   of   a


36.During   the   course   of   the   hearings   the   Union   of   India

   repeatedly   insisted   that   the   matter   involves   many

   jurisdictions, across the globe, and a proper investigation

   could be accomplished only through the concerted efforts

   by   different   law   enforcement   agencies,   both   within   the

   Central Government, and also various State governments.

   However,   the   absence   of   any   satisfactory   explanation   of

   the slowness of the pace of investigation, and lack of any

   credible   answers   as   to   why   the   respondents   did   not   act

   with   respect   to   those   actions   that   were   feasible,   and


within the ambit of powers of the Enforcement Directorate

itself, such as custodial investigation, leads us to conclude

that   the   lack   of   seriousness   in   the   efforts   of   the

respondents are contrary to the requirements of laws and

constitutional obligations of the Union of India. It was only

upon the insistence and intervention of this Court has the

Enforcement   Directorate   initiated   and   secured   custodial

interrogation   over   Hassan   Ali   Khan.   The   Union   of   India

has   explicitly   acknowledged   that   there   was   much   to   be

desired   with   the   manner   in   which   the   investigation   had

proceeded prior to the intervention of this court. From the

more   recent   reports,   it   would   appear   that   the   Union   of

India, on account of its more recent efforts to conduct the

investigation with seriousness, on account of the gravitas

brought   by   this   Court,   has   led   to   the   securing   of

additional   information,   and   leads,   which   could   aid   in

further   investigation.   For   instance,   during   the  continuing

interrogation   of   Hassan   Ali   Khan   and   the   Tapurias,

undertaken for the first time at the behest of this Court,

many   names   of   important   persons,   including   leaders   of

some   corporate   giants,   politically   powerful   people,   and

international   arms   dealers   have   cropped   up.   So   far,   no

significant   attempt   has   been   made   to   investigate   and

verify   the   same.   This   is   a   further   cause   for   the   grave

concerns   of   this   Court,   and   points   to   the   need   for


  continued,  effective  and  day to day monitoring  by a SIT

  constituted   by   this   Court,   and   acting   on   behalf,   behest

  and direction of this Court.

37.In light of the fact that the issues are complex, requiring

  expertise   and   knowledge   of   different   departments,   and

  the   necessity   of   coordination   of   efforts   across   various

  agencies and departments, it was submitted to us that the

  Union   of   India   has   recently   formed   a   High   Level

  Committee,   under   the   aegis   of   the   Department   of

  Revenue   in   the   Ministry   of   Finance,   which   is   the   nodal

  agency   responsible   for   all   economic   offences.   The

  composition of the High Level Committee ("HLC") is said

  to   be   as   follows:   (i)   Secretary,   Department   of   Revenue,

  as the Chairman; (ii) Deputy Governor,  Reserve Bank of

  India;   (iii)   Director   (IB);   (iv)   Director,   Enforcement;   (v)

  Director,   CBI;   (vi)   Chairman,   CBDT;   (vii)   DG,   Narcotics

  Control   Bureau;   (vii)   DG,   Revenue   Intelligence;   (ix)

  Director, Financial Intelligence Unit; and (x) JS (FT & TR-

  I), CBDT. It was also submitted that the HLC may co-opt,

  as  necessary,  representation  not below  the  rank  of Joint

  Secretary   from   the   Home   Secretary,   Foreign   Secretary,

  Defense Secretary and the Secretary, Cabinet Secretariat.

  The   Union   of   India   claims   that   such   a   multi-disciplinary

  group and committee would now enable the conducting of

  an   efficient   and   a   systematic   investigation   into   the


  matters   concerning   allegations   against   Hassan   Ali   Khan

  and   the   Tapurias;   and   further   that   such   a   committee

  would also enable the taking of appropriate steps to bring

  back   the   monies   stashed   in   foreign   banks,   for   which

  purposes a need may arise to register further cases. The

  Union   of   India   also   claims   that   the   formation   of   such   a

  committee   indicates   the   seriousness   with   which   it   is

  viewing the entire matter.

38.While   it   would   appear,   from   the   Status   Reports

  submitted to this Court, that the Enforcement Directorate

  has   moved   in   some   small   measure,   the   actual   facts   are

  not   comforting   to   an   appropriate   extent.   In   fact   we   are

  not   convinced   that   the   situation   has   changed   to   the

  extent   that   it   ought   to   so   as   to   accept   that   the

  investigation would now be conducted with the degree of

  seriousness  that  is  warranted.  According  to the Union  of

  India the HLC was formed in order to take charge of and

  direct   the   entire   investigation,   and   subsequently,   the

  prosecution.   In   the   meanwhile   a   charge   sheet   has   been

  filed   against   Hassan   Ali   Khan.   Upon   inquiry   by   us   as   to

  whether   the   charge-sheet   had   been   vetted   by   the   HLC,

  and its inputs secured, the counsel for Union of India were

  flummoxed.   The   fact   was   that   the   charge-sheet   had   not

  been   given   even   for   the   perusal   of   the       HLC,   let   alone

  securing   its   inputs,   guidance   and   direction.   We   are   not


   satisfied by the explanation offered by the Directorate of

   Enforcement   by   way   of   affidavit   after   the   orders   were

   reserved.   Be   it   noted   that   a   nodal   agency   was   set   up,

   pursuant to directions of this Court in Vineet Narain case

   given many years ago. Yet the same was not involved and

   these matters were never placed before it. Why?

39.From   the   status   reports,   it   is   clear   that   the   problem   is

   extremely complex, and many agencies and departments

   spread   across   the   country   have   not   responded   with   the

   alacrity,   and   urgency,   that   one   would   desire.   Moreover,

   the Union of India has been unable to answer any of the

   questions   regarding   its   past   actions,   and   their

   implications, such as the slowness of the investigation, or

   about grant of license  to conduct  retail  banking  by UBS,

   by reversing the decision taken earlier to withhold such a

   license   on   the   grounds   that   the   said   bank's   credentials

   were suspect. To this latter query, the stance of the Union

   of India has been that entry of UBS would facilitate flow of

   foreign investments into India. The question that arises is

   whether   the   task   of   bringing   foreign   funds   into   India

   override all other constitutional concerns and obligations?

40.The   predominant   theme   in   the   responses   of   Union   of

   India before this court has been that it is doing all that it

   can   to   bring   back   the   unaccounted   monies   stashed   in

   various banks abroad. To this is added the qualifier that it


  is   an   extremely   complex   problem,   requiring   the

  cooperation   of   many   different   jurisdictions,   and   an

  internationally   coordinated   effort.   Indeed   they   are

  complex.   We   do   not   wish   to   go   into   the   details   of

  arguments about whether the Union of India is, or is not,

  doing necessary things to achieve such goals. That is not

  necessary for the matters at hand.

41.What is important is that the Union of India had obtained

  knowledge,   documents   and   information   that   indicated

  possible   connections   between   Hassan   Ali   Khan,   and   his

  alleged   co-conspirators   and   known   international   arms

  dealers. Further, the Union of India was also in possession

  of   information   that   suggested   that   because   the

  international arms dealing network, and a very prominent

  dealer   in   it,   could   not   open   a   bank   account   even   in   a

  jurisdiction   that   is   generally   acknowledged   to   lay   great

  emphasis on not asking sources of money being deposited

  into its banks, Hassan Ali Khan may have played a crucial

  role   in  opening   an   account   with   the   branch  of   the  same

  bank   in   another   jurisdiction.   The   volume   of   alleged

  income  taxes  owed  to  the  country,  as  demanded  by the

  Union of India itself, and the volume of monies, by some

  accounts   US   $8.04   billion,   and   some   other   accounts   in

  excess  of  Rs.  70,000   crores,  that   are  said   to  have  been

  routed through various bank accounts of Hassan Ali Khan,


  and   Tapurias.   Further,   from   all   accounts   it   has   been

  acknowledged   that   none   of   the   named   individuals   have

  any known and lawful sources for such huge quantities of

  monies.   All   of   these   factors,   either   individually   or

  combined,   ought   to   have   immediately   raised   questions

  regarding   the   sources   being   unlawful   activities,   national

  security, and transfer of funds into India for other illegal

  activities, including acts against the State. It was only at

  the   repeated   insistence   by   us   that   such   matters   have

  equal,   if  not   even   greater  importance   than   issues   of  tax

  collection, has the Union of India belatedly concluded that

  such   aspects   also   ought   to   be   investigated   with

  thoroughness.   However,   there   is   still   no   evidence   of   a

  really serious investigation into these other matters from

  the national security perspective.

42.The fact remains that the Union of India has struggled in

  conducting   a   proper   investigation   into   the   affairs   of

  Hassan Ali Khan and the Tapurias. While some individuals,

  whose names have come to the adverse knowledge of the

  Union   of   India,   through   the   more   recent   investigations,

  have   been   interrogated,   many   more   are   yet   to   be

  investigated. This highly complex investigation has in fact

  just begun. It is still too early to conclude that the Union

  of India has indeed placed all the necessary machinery to

  conduct a proper investigation. The formation of the HLC


  was a necessary step, and may even be characterized as

  a welcome step. Nevertheless, it is an insufficient step.

43.In light of the  above, we had proposed to the  Union  of

  India   that   the   same   HLC   constituted   by   it   be   converted

  into a Special Investigation Team, headed by two retired

  judges of the Supreme Court of India. The Union of India

  opposes   the   same,   but   provides   no   principle   as   to   why

  that would be undesirable, especially in light of the many

  lapses and lacunae in its actions in these matters spread

  over the past four years.

44.We   are   of   the   firm   opinion   that   in   these   matters

  fragmentation   of   government,   and   expertise   and

  knowledge,   across   many   departments,   agencies   and

  across various jurisdictions, both within the country, and

  across the globe, is a serious impediment to the conduct

  of   a   proper   investigation.   We   hold   that   it   is   in   fact

  necessary to create a body that coordinates, directs, and

  where   necessary   orders   timely   and   urgent   action   by

  various   institutions   of   the   State.   We   also   hold   that   the

  continued involvement of this Court in these matters, in a

  broad   oversight   capacity,   is   necessary   for   upholding   the

  rule   of   law,   and   achievement   of   constitutional   values.

  However,   it   would   be   impossible   for   this   Court   to   be

  involved   in   day   to   day   investigations,   or   to   constantly

  monitor each and every aspect of the investigation.


45.The   resources   of   this   court   are   scarce,   and   it   is   over-

   burdened with the task of rendering justice in well over a

   lakh   of   cases   every   year.   Nevertheless,   this   Court   is

   bound   to   uphold   the   Constitution,   and   its   own   burdens,

   excessive as they already are, cannot become an excuse

   for it to not perform that task. In a country where most of

   its   people   are   uneducated   and   illiterate,   suffering   from

   hunger   and   squalor,   the   retraction   of   the   monitoring   of

   these matters by this Court would be unconscionable.

46.The   issue   is   not   merely   whether   the   Union   of   India   is

   making   the   necessary   effort   to   bring   back   all   or   some

   significant part of the alleged monies. The fact that there

   is   some   information   and   knowledge   that   such   vast

   amounts may have been stashed away in foreign banks,

   implies   that   the   State   has   the   primordial   responsibility,

   under the Constitution, to make every effort to trace the

   sources   of   such   monies,   punish   the   guilty   where   such

   monies   have   been   generated   and/or   taken   abroad

   through   unlawful   activities,   and   bring   back   the   monies

   owed to the Country. We do recognize that the degree of

   success,   measured   in   terms   of   the   amounts   of   monies

   brought   back,   is   dependent   on   a   number   of   factors,

   including   aspects   that   relate   to   international   political

   economy and relations, which may or may not be under

   our   control.   The   fact   remains   that   with   respect   to   those


   factors that were within the powers of the Union of India,

   such as investigation of possible criminal nexus, threats to

   national security etc., were not even attempted. Fealty to

   the Constitution is not a matter of mere material success;

   but, and probably more importantly from the perspective

   of the moral authority of the State, a matter of integrity

   of effort on all the dimensions that inform a problem that

   threatens the constitutional projects. Further, the degree

   of seriousness with which efforts are made with respect to

   those   various   dimensions   can   also   be   expected   to   bear

   fruit in terms of building capacities, and the development

   of necessary attitudes to take the law enforcement part of

   accounting or following the money seriously in the future.

47.The   merits   of   vigour   of   investigations,   and   attempts   at

   law   enforcement,   cannot   be   measured   merely   on   the

   scale   of   what   we   accomplish   with   respect   to   what   has

   happened in the past. It would necessarily also have to be

   appreciated from the benefits that are likely to accrue to

   the country in preventing such activities in the future. Our

   people   may   be   poor,   and   may   be   suffering   from   all

   manner   of   deprivation.   However,   the   same   poor   and

   suffering masses are rich, morally and from a humanistic

   point of view. Their forbearance of the many foibles and

   failures of those who wield power, no less in their name

   and  behalf  than  of the rich and  the empowered, is itself


    indicative of their  great qualities,  of humanity,  trust  and

    tolerance.   That   greatness   can   only   be   matched   by

    exercise of every sinew, and every resource, in the broad

    goal of our constitutional project of bringing to their lives

    dignity. The efforts that this Court makes in this regard,

    and will make in this respect and these matters, can only

    be conceived as a small  and minor,  though nevertheless

    necessary,   part.   Ultimately   the   protection   of   the

    Constitution and striving to promote its vision and values

    is an elemental mode of service to our people.

48. We note that in many instances, in the past, when issues

    referred to the Court have been very complex in nature,

    and   yet   required   the   intervention   of   the   Court,   Special

    Investigation Teams have been ordered and constituted in

    order to enable the Court, and the Union of India and/or

    other   organs   of   the   State,   to   fulfill   their   constitutional

    obligations. The following instances may be noted: Vineet

    Narain v Union of India2, NHRC v State of Gujarat3, Sanjiv

    Kumar v State of Haryana4, and Centre for PIL v Union of


49.In light of the above we herewith order:

        (i)            That   the   High   Level   Committee   constituted   by

                       the Union of India, comprising of (i) Secretary,

2 (1996) 2 SCC 199

3 (2004) 8 SCC 610

4 (2005) 5 SCC 517

5 (2011) 1 SCC 560.


         Department  of   Revenue;  (ii)   Deputy   Governor,

         Reserve   Bank   of   India;   (iii)   Director   (IB);   (iv)

         Director,   Enforcement;   (v)   Director,   CBI;   (vi)

         Chairman,   CBDT;   (vii)   DG,   Narcotics   Control

         Bureau;   (vii)   DG,   Revenue   Intelligence;   (ix)

         Director, Financial Intelligence Unit; and (x) JS

         (FT & TR-I), CBDT be forthwith appointed with

         immediate   effect   as   a   Special   Investigation


(ii)     That   the   Special   Investigation   Team,   so

         constituted, also include Director, Research and

         Analysis Wing;

(iii)    That   the   above   Special   Investigation   Team,   so

         constituted,   be   headed   by   and   include   the

         following   former   eminent   judges   of   this   Court:

         (a)   Hon'ble   Mr.   Justice   B.P.   Jeevan   Reddy   as

         Chairman;   and   (b)   Hon'ble   Mr.   Justice   M.B.

         Shah   as   Vice-Chairman;   and   that   the   Special

         Investigation   Team   function   under   their

         guidance and direction;

(iv)     That   the   Special   Investigation   Team,   so

         constituted,   shall   be   charged   with   the

         responsibilities   and   duties   of   investigation,

         initiation   of   proceedings,   and   prosecution,

         whether   in   the   context   of   appropriate   criminal


or civil proceedings of: (a) all issues relating to

the   matters   concerning   and   arising   from

unaccounted monies of Hassan Ali Khan and the

Tapurias;   (b)   all   other   investigations   already

commenced and are pending, or awaiting to be

initiated,   with   respect   to   any   other   known

instances   of   the   stashing   of   unaccounted

monies  in  foreign  bank  accounts   by Indians  or

other   entities   operating   in   India;   and   (c)   all

other   matters   with   respect   to   unaccounted

monies   being   stashed   in   foreign   banks   by

Indians or other entities operating in India that

may   arise   in   the   course   of   such   investigations

and proceedings. It is clarified here that within

the   ambit   of   responsibilities   described   above,

also   lie   the   responsibilities   to   ensure   that   the

matters   are   also   investigated,   proceedings

initiated   and   prosecutions   conducted   with

regard   to   criminality   and/or   unlawfulness   of

activities   that   may   have   been   the   source   for

such   monies,   as   well   as   the   criminal   and/or

unlawful   means   that   are   used   to   take   such

unaccounted   monies   out   of   and/or   bring   such

monies back into the country, and use of such

monies   in   India   or   abroad.   The   Special


        Investigation   Team   shall   also   be   charged   with

        the responsibility of preparing a comprehensive

        action plan, including the creation of necessary

        institutional   structures   that   can   enable   and

        strengthen   the   country's   battle   against

        generation   of   unaccounted   monies,   and   their

        stashing   away   in   foreign   banks   or   in   various

        forms domestically.

(v)     That   the   Special   Investigation   Team   so

        constituted   report   and   be   responsible   to   this

        Court, and that it shall be charged with the duty

        to   keep   this   Court   informed   of   all   major

        developments   by   the   filing   of   periodic   status

        reports, and following of any special orders that

        this Court may issue from time to time;

(vi)    That   all   organs,   agencies,   departments   and

        agents of the State, whether at the level of the

        Union   of   India,   or   the   State   Government,

        including   but   not   limited   to   all   statutorily

        formed         individual         bodies,         and         other

        constitutional   bodies,               extend   all   the

        cooperation   necessary   for   the   Special

        Investigation   Team   so   constituted   and



     (vii)     That   the   Union   of   India,   and   where   needed

               even   the   State   Governments,   are   directed   to

               facilitate   the   conduct   of   the   investigations,   in

               their   fullest   measure,   by   the   Special

               Investigation   Team   so   constituted   and

               functioning,   by   extending   all   the   necessary

               financial,   material,   legal,   diplomatic   and

               intelligence         resources,         whether         such

               investigations or portions of such investigations

               occur inside the country or abroad.

     (viii)    That   the   Special   Investigation   Team   also   be

               empowered   to   further   investigate   even   where

               charge-sheets   have   been   previously   filed;   and

               that   the   Special   Investigation   Team   may

               register further cases, and conduct appropriate

               investigations   and   initiate   proceedings,   for   the

               purpose   of   bringing   back   unaccounted   monies

               unlawfully kept in bank accounts abroad.

50.We   accordingly   direct   the   Union   of   India   to   issue

  appropriate notification and publish the same forthwith. It

  is needless to clarify that the former judges of this Court

  so appointed to supervise the Special Investigation Team

  are   entitled   to   their   remuneration,   allowances,   perks,

  facilities as that of the judges of the Supreme Court. The

  Ministry   of   Finance,   Union   of   India,   shall   be   responsible


  for   creating   the   appropriate   infrastructure   and   other

  facilities for proper and effective functioning of the Special

  Investigation Team at once.


51.We now turn our attention to the matter of disclosure of

  various   documents   referenced   by   the   Union   of   India,   as

  sought   by   the   Petitioners.   These   documents,   including

  names   and   bank   particulars,   relate   to   various   bank

  accounts,   of   Indian   citizens,   in   the   Principality   of

  Liechtenstein   ("Liechtenstein"),   a   small   landlocked

  sovereign   nation-state   in   Europe.   It   is   generally

  acknowledged that Liechtenstein is a tax haven.

52.Apparently,   as   alleged   by   the   Petitioners,   a   former

  employee of a bank or banks in Liechtenstein secured the

  names of some 1400 bank account holders, along with the

  particulars of such accounts, and offered the information

  to various entities. The same was secured by the Federal

  Republic   of   Germany   ("Germany"),   which   in   turn,   apart

  from   initiating   tax   proceedings   against   some   600

  individuals,   also   offered   the   information   regarding

  nationals and citizens of other countries to such countries.

  It is the contention of the Petitioners that even though the

  Union   of   India   was   informed   about   the   presence   of   the

  names of a large number of Indian  citizens  in the list of


   names revealed by the former bank employee, the Union

   of   India   never   made   a   serious   attempt   to   secure   such

   information and proceed to investigate such individuals. It

   is   the   contention   of   the   Petitioners   that   such   names

   include the identities of prominent and powerful Indians,

   or   the   identities   of   individuals,   who   may   or   may   not   be

   Indian   citizens,   but   who   could   lead   to   information   about

   various   powerful   Indians   holding   unaccounted   monies   in

   bank   accounts   abroad.   It   is   also   the   contention   of   the

   Petitioners   that,   even   though   they   had   sought   the

   information   under   the   Right   to   Information   Act   (2005),

   the Respondents had not revealed the names nor divulged

   the relevant documents. The Petitioners argue that such a

   reluctance   is   only   on   account   of   the   Union   of   India   not

   having   initiated   suitable   steps   to   recover   such   monies,

   and   punish   the   named   individuals,   and   also   because

   revelation of names of individuals on the list would lead to

   discovery of powerful persons engaged in various unlawful

   activities, both in generation of unlawful and unaccounted

   monies, and their stashing away in banks abroad.

53.It   was   also   alleged   by   the   Petitioners   that   in   fact

   Germany   had   offered   such   information,   freely   and

   generally to any country that requests the same, and did

   not   specify   that   the   names   and   other   information

   pertaining   to   such   names   ought   to   be   requested   only


  pursuant   to   any   double   taxation   agreements   it   has   with

  other countries. The Petitioners also alleged that Union of

  India has chosen to proceed under the assumption that it

  could   have   requested   such   information   only   pursuant   to

  the double taxation agreement it has with Germany. The

  Petitioners   contend   that   the   Government   of   India   took

  such   a   step   primarily   to   conceal   the   information   from

  public gaze.

54.The response of the Union of India may be summed up

  briefly: (i) that they secured the names of individuals with

  bank accounts in banks in Liechtenstein, and other details

  with   respect   to   such   bank   accounts,   pursuant   to   an

  agreement of India with Germany for avoidance of double

  taxation and prevention of fiscal evasion; (ii) that the said

  agreement   proscribes   the   Union   of   India   from   disclosing

  such   names,   and   other   documents   and   information   with

  respect to such bank accounts, to the Petitioners, even in

  the   context   of   these   ongoing   proceedings   before   this

  court;   (iii)   that   the   disclosure   of   such   names,   and   other

  documents   and   information,   secured   from   Germany,

  would   jeopardize   the   relations   of   India   with   a   foreign

  state;   (iv)   that   the   disclosure   of   such   names,   and   other

  documents   and   information,   would   violate   the   right   to

  privacy of those individuals who may have only deposited

  monies in a lawful manner; (v) that disclosure of names,


   and  other  documents  and  information  can  be made  with

   respect   to   those   individuals   with   regard   to   whom

   investigations  are completed,  and    proceedings initiated;

   and (vi) that contrary to assertions by the Petitioners, it

   was Germany which had asked the Union of India to seek

   the   information   under   double   taxation   agreement,   and

   that this was in response to an earlier request by Union of

   India for the said information.

55.For   the   purposes   of   the   instant   order,   the   issue   of

   whether the Union of India could have sought and secured

   the names, and other documents and information, without

   having to take recourse to the double taxation agreement

   is not relevant. For the purposes of determining whether

   Union of India is obligated to disclose the information that

   it   obtained,   from   Germany,   with   respect   to   accounts   of

   Indian   citizens   in   a   bank   in   the   Principality   of

   Liechtenstein,   we   need   only   examine   the   claims   of   the

   Union of India as to whether it is proscribed by the double

   taxation   agreement   with   Germany   from   disclosing   such

   information. Further, and most importantly, we would also

   have   to   examine   whether   in   the   context   of   Article   32

   proceedings   before   this   court,   wherein   this   court   has

   exercised   jurisdiction,   the   Union   of   India   can   claim

   exemption   from   providing   such   information   to   the

   Petitioners,   and   also   with   respect   to   issues   of   right   to


  privacy   of   individuals   who   hold   such   accounts,   and   with

  respect   of   whom   no   investigations   have   yet   been

  commenced, or only partially conducted, so that the State

  has   not   yet   issued   a   show   cause   and   initiated


56.We have perused the said agreement with Germany. We

  are convinced that the said agreement, by itself, does not

  proscribe   the   disclosure   of   the   relevant   documents   and

  details of the same, including the names of various bank

  account holders in Liechtenstein. In the first instance, we

  note that the names of the individuals are with respect to

  bank   accounts   in   the   Liechtenstein,   which   though

  populated   by   largely   German   speaking   people,   is   an

  independent   and   sovereign   nation-state.   The   agreement

  between   Germany   and   India   is   with   regard   to   various

  issues   that   crop   up   with   respect   to   German   and   Indian

  citizens' liability to pay taxes to Germany and/or India. It

  does not even remotely touch upon information regarding

  Indian   citizens'   bank   accounts   in   Liechtenstein   that

  Germany  secures  and  shares  that  have  no  bearing  upon

  the   matters   that   are   covered   by   the   double   taxation

  agreement   between   the   two   countries.   In   fact,   the

  "information" that is referred to in Article 26 is that which

  is   "necessary   for   carrying   out   the   purposes   of   this

  agreement",   i.e.   the   Indo-German   DTAA.   Therefore,   the


   information  sought   does  not   fall  within   the  ambit   of  this

   provision. It is disingenuous for the Union of India, under

   these circumstances, to repeatedly claim that it is unable

   to   reveal   the   documents   and   names   as   sought   by   the

   Petitioners on the ground that the same is proscribed by

   the   said   agreement.   It   does   not   matter   that   Germany

   itself   may   have   asked   India   to   treat   the   information

   shared as being subject to the confidentiality and secrecy

   clause   of   the   double   taxation   agreement.   It   is   for   the

   Union   of   India,   and   the   courts,   in   appropriate

   proceedings,   to   determine   whether   such   information

   concerns matters that are covered by the double taxation

   agreement   or   not.   In   any   event,   we   also   proceed   to

   examine the provisions of the double taxation agreement

   below,   to   also   examine   whether   they   proscribe   the

   disclosure   of   such   names,   and   other   documents   and

   information,   even   in   the   context   of   these   instant


57.Relevant   portions   of   Article   26   of   the   double   taxation

   agreement with Germany, a copy of which was submitted

   by Union of India, reads as follows:

            "1.   The   competent   authorities   of   the   Contracting

            States   shall   exchange   such   information   as   is

            necessary   for   carrying   out   the   purposes   of   this

            Agreement.   Any   information   received   by   a

            Contracting State shall be treated as secret in the


           same   manner   as   information   obtained   under   the

           domestic laws of that State and shall be disclosed

           only   to   persons   or   authorities   (including   courts

           and   administrative   bodies)   involved   in   the

           assessment   or   collection   of,   the   enforcement   or

           prosecution in respect of, or the determination of

           appeals   in   relation   to,   the   taxes   covered   by   this

           Agreement. They may disclose the information in

           public court proceedings or in judicial proceedings.

           2. In no case shall the provisions of paragraph 1

           be   construed   so   as   to   impose   on   a   Contracting

           State the obligation:

                 (a)    to carry out administrative measures at

                        variance          with         the         laws         and

                        administrative practice of that or of the

                        other Contracting State;

                 (b)    to   supply   information   which   is   not

                        obtainable   under   the   laws   or   in   the

                        normal   course   of   the   administration   of

                        that or of the other Contracting State;

                 (c)    to   supply   information   which   would

                        disclose  any  trade,  business,  industrial,

                        commercial   or   professional   secret   or

                        trade   process,   or   information,   the

                        disclosure of which would be contrary to

                        public policy (order public)"

58.The   above   clause   in   the   relevant   agreement   with

  Germany would indicate that, contrary to the assertions of

  Union   of   India,   there   is   no   absolute   bar   of   secrecy.

  Instead   the   agreement   specifically   provides   that   the

  information may be disclosed in public court proceedings,


   which the instant proceedings are. The proceedings in this

   matter   before   this   court,   relate   both   to   the   issue   of   tax

   collection   with   respect   to   unaccounted   monies   deposited

   into foreign bank accounts, as well as with issues relating

   to   the   manner   in   which   such   monies   were   generated,

   which   may   include   activities   that   are   criminal   in   nature

   also. Comity of nations cannot be predicated upon clauses

   of   secrecy   that   could   hinder   constitutional   proceedings

   such as these, or criminal proceedings.

59.The   claim   of   Union   of   India   is   that   the   phrase   "public

   court proceedings", in the last sentence in Article 26(1) of

   the double taxation agreement only relates to proceedings

   relating   to   tax   matters.   The   Union   of   India   claims   that

   such an understanding comports with how it is understood

   internationally.   In   this   regard   Union   of   India   cites   a   few

   treatises. However, the Union of India did not provide any

   evidence   that   Germany   specifically   requested   it   to   not

   reveal   the   details   with   respect   to   accounts   in   the

   Liechtenstein   even   in   the   context   of   proceedings   before

   this court.

60.Article 31, "General Rule of Interpretation", of the Vienna

   Convention  of the Law  of  Treaties,  1969 provides  that  a

   "treaty   shall   be   interpreted   in   good   faith   in   accordance

   with the ordinary meaning to be given to the terms of the

   treaty   in   their   context   and   in   the   light   of   its   object   and


    purpose."   While   India   is   not   a   party   to   the   Vienna

    Convention,   it   contains   many   principles   of   customary

    international   law,   and   the   principle   of   interpretation,   of

    Article   31   of   the   Vienna   Convention,   provides   a   broad

    guideline   as   to   what   could   be   an   appropriate   manner   of

    interpreting a treaty in the Indian context also.

61. This   Court   in  Union   of   India   v.   Azadi   Bachao   Andolan,6

    approvingly   noted   Frank   Bennion's   observations   that   a

    treaty   is   really   an   indirect   enactment,   instead   of   a

    substantive   legislation,   and   that   drafting   of   treaties   is

    notoriously sloppy, whereby inconveniences obtain. In this

    regard   this   Court   further   noted   the   dictum   of   Lord

    Widgery,   C.J.   that   the   words   "are   to   be   given   their

    general   meaning,   general   to   lawyer   and   layman   alike....

    The meaning of the diplomat rather than the lawyer." The

    broad principle of interpretation, with respect to treaties,

    and provisions therein, would  be that ordinary meanings

    of words be given effect to, unless the context requires or

    otherwise.   However,   the   fact   that   such   treaties   are

    drafted   by   diplomats,   and   not   lawyers,   leading   to

    sloppiness   in   drafting   also   implies   that   care   has   to   be

    taken   to   not   render   any   word,   phrase,   or   sentence

    redundant,   especially   where   rendering   of   such   word,

    phrase or sentence redundant would lead to a manifestly

    absurd   situation,   particularly   from   a   constitutional

6 (2004) 10 SCC 1


  perspective.   The   government   cannot   bind   India   in   a

  manner   that   derogates   from   Constitutional   provisions,

  values and imperatives.

62.The last sentence of Article 26(1) of the double taxation

  agreement   with   Germany,   "[T]hey   may   disclose   this

  information   in   public   court   proceedings   or   in   judicial

  decisions," is revelatory in this regard. It stands out as an

  additional   aspect   or   provision,   and   an   exception,   to   the

  preceding portion of the said article. It is located after the

  specification that information shared between contracting

  parties   may   be   revealed   only   to   "persons   or   authorities

  (including   courts   and   administrative   bodies)   involved   in

  the   assessment   or   collection   of,   the   enforcement   or

  prosecution in respect of, or the determination of appeals

  in   relation   to   taxes   covered   by   this   Agreement."

  Consequently,   it   has   to   be   understood   that   the   phrase

  "public court proceedings" specified in the last sentence in

  Article   26(1)   of   the   double   taxation   agreement   with

  Germany refers to court proceedings other than those in

  connection   with   tax   assessment,   enforcement,

  prosecution   etc.,   with   respect   to   tax   matters.   If   it   were

  otherwise, as argued by Union of India, then there would

  have   been   no   need   to   have   that   last   sentence   in   Article

  26(1)   of   the   double   taxation   agreement   at   all.   The   last

  sentence   would   become   redundant   if   the   interpretation


   pressed   by   Union   of   India   is   accepted.   Thus,

   notwithstanding the alleged convention of interpreting the

   last   sentence   only   as   referring   to   proceedings   in   tax

   matters,   the   rubric   of   common   law   jurisprudence,   and

   fealty   to   its   principles,   leads   us   inexorably   to   the

   conclusion   that   the   language   in   this   specific   treaty,   and

   under   these   circumstances   cannot   be   interpreted   in   the

   manner sought by Union of India.

63.While   we   agree   that   the   language   could   have   been

   tighter,   and   may   be   deemed   to   be   sloppy,   to   use   Frank

   Bennion's   characterization,   negotiation   of   such   treaties

   are   conducted   and   secured   at   very   high   levels   of

   government,   with   awareness   of   general   principles   of

   interpretation used in various jurisdictions. It is fairly well

   known,   at   least   in   Common   Law   jurisdictions,   that   legal

   instruments   and   statutes   are   interpreted   in   a   manner

   whereby redundancy of expressions and phrases is sought

   to be avoided. Germany would have been well aware of it.

64.The   redundancy   that   would   have   to   be   ascribed   to   the

   said last sentence of Article 26(1) of the double taxation

   agreement with Germany, if the position of Union of India

   were to be accepted, also leads to a manifest absurdity, in

   the context of the Indian Constitution. Such a redundancy

   would   mean   that   constitutional   imperatives   themselves

   are   to   be   set   aside.   Modern   constitutionalism,   to   which


   Germany is a major contributor too, especially in terms of

   the basic structure doctrine, specifies that powers vested

   in any organ of the State have to be exercised within the

   four  corners  of  the   Constitution,  and  further  that  organs

   created   by   a   constitution   cannot   change   the   identity   of

   the constitution itself.

65. The   basic   structure   of   the   Constitution   cannot   be

   amended even by the amending power of the legislature.

   Our Constitution guarantees the right, pursuant to Clause

   (1) of Article 32, to petition this Court on the ground that

   the   rights   guaranteed   under   Part   III   of   the   Constitution

   have   been   violated.   This   provision   is   a  part   of   the   basic

   structure   of   the   Constitution.   Clause   (2)   of   Article   32

   empowers   this   Court   to   issue   "directions   or   orders   or

   writs,   including   writs   in   the   nature   of  habeas   corpus,

   mandamus,   prohibition,   quo   warranto  and   certiorari,

   whichever may be appropriate for the enforcement of any

   of the rights conferred by" Part III. This is also a part of

   the basic structure of the Constitution.

66.In   order   that   the   right   guaranteed   by   Clause   (1)   of

   Article   32   be   meaningful,   and   particularly   because   such

   petitions   seek   the   protection   of   fundamental   rights,   it   is

   imperative   that   in   such   proceedings   the   petitioners   are

   not denied the information necessary for them to properly

   articulate   the   case   and   be   heard,   especially   where   such


   information   is   in   the   possession   of   the   State.   To   deny

   access   to   such   information,   without   citing   any

   constitutional   principle   or   enumerated   grounds   of

   constitutional   prohibition,   would   be   to   thwart   the   right

   granted by Clause (1) of Article 32.

67.Further,   in   as   much   as,   by   history   and   tradition   of

   common   law,   judicial   proceedings   are   substantively,

   though not necessarily fully, adversarial, both parties bear

   the   responsibility   of   placing   all   the   relevant   information,

   analyses,   and   facts   before   this   court   as   completely   as

   possible.   In   most   situations,   it   is   the   State   which   may

   have more comprehensive information that is relevant to

   the matters at hand in such proceedings. However, some

   agents   of   the   State   may   perceive   that   because   these

   proceedings   are   adversarial   in   nature,   the   duty   and

   burden to furnish all the necessary information rests upon

   the Petitioners, and hence the State has no obligation to

   fully  furnish  such  information.  Some  agents of the State

   may also seek to cast the events and facts in a light that

   is favourable to the government in the immediate context

   of the proceedings, even though such actions do not lead

   to rendering of complete justice in the task of protection

   of fundamental rights. To that extent, both the petitioners

   and   this   Court   would   be   handicapped   in   proceedings

   under Clause (1) of Article 32.


68.It   is   necessary   for   us   to   note   that   the   burden   of

   asserting,   and   proving,   by   relevant   evidence   a   claim   in

   judicial   proceedings   would   ordinarily   be   placed   upon   the

   proponent   of   such   a   claim;   however,   the   burden   of

   protection   of   fundamental   rights   is   primarily   the   duty   of

   the   State.   Consequently,   unless   constitutional   grounds

   exist, the State may not act in a manner that hinders this

   Court   from   rendering   complete   justice   in   such

   proceedings.   Withholding   of   information   from   the

   petitioners,   or   seeking   to   cast   the   relevant   events   and

   facts  in   a  light   favourable   to  the  State  in   the  context   of

   the   proceedings,   even   though   ultimately   detrimental   to

   the essential task of protecting fundamental rights, would

   be destructive to the guarantee in Clause (1) of Article 32,

   and  substantially   eviscerate  the  capacity  of  this  Court  in

   exercising its powers contained in clause (2) of Article 32,

   and those traceable to other provisions of the Constitution

   and   broader   jurisprudence   of   constitutionalism,   in

   upholding fundamental rights enshrined in Part III. In the

   task of upholding of fundamental rights, the State cannot

   be   an   adversary.   The   State   has   the   duty,   generally,   to

   reveal all the facts and information in its possession to the

   Court, and also provide the same to the petitioners. This

   is so, because the petitioners would also then be enabled

   to bring to light facts and the law that may be relevant for


  the Court in rendering its decision. In proceedings such as

  those under Article 32, both the petitioner and the State,

  have   to   necessarily   be   the   eyes   and   ears   of   the   Court.

  Blinding   the   petitioner   would   substantially   detract   from

  the integrity of the process of judicial decision making in

  Article   32   proceedings,   especially   where   the   issue   is   of

  upholding of fundamental rights.

69.Furthermore, we hold that there is a special relationship

  between   Clause   (1)   of   Article   32   and   Sub-Clause   (a)   of

  Clause   (1)   of   Article   19,   which   guarantees   citizens   the

  freedom of speech and expression. The very genesis, and

  the   normative   desirability   of   such   a   freedom,   lies   in

  historical   experiences   of   the   entire   humanity:   unless

  accountable,   the   State   would   turn   tyrannical.   A

  proceeding under Clause (1) of Article 32, and invocation

  of   the   powers   granted   by   Clause   (2)   of   Article   32,   is   a

  primordial   constitutional   feature   of   ensuring   such

  accountability.   The   very   promise,   and   existence,   of   a

  constitutional   democracy   rests   substantially   on   such


70.Withholding   of   information   from   the   petitioners   by   the

  State,   thereby   constraining   their   freedom   of   speech   and

  expression   before   this   Court,   may   be   premised   only   on

  the exceptions carved out, in Clause (2) of Article 19, "in

  the interests of sovereignty and integrity of India, security


   of the State, friendly relations with foreign States, public

   order, decency or morality, or in relation to contempt  of

   court, defamation or incitement to an offence" or by law

   that   demarcate   exceptions,   provided   that   such   a   law

   comports   with   the   enumerated   grounds   in   Clause   (2)   of

   Article  19, or that may be provided for elsewhere  in the


71.It   is   now   a   well   recognized   proposition   that   we   are

   increasingly being entwined in a global network of events

   and social action. Considerable care has to be exercised in

   this process, particularly where governments which come

   into   being   on   account   of   a   constitutive   document,   enter

   into   treaties.   The   actions   of   governments   can   only   be

   lawful   when   exercised   within   the   four   corners   of

   constitutional   permissibility.   No   treaty   can   be   entered

   into,   or   interpreted,   such   that   constitutional   fealty   is

   derogated from. The redundancy, that the Union of India

   presses, with respect to the last sentence of Article 26(1)

   of   the   double   taxation   agreement   with   Germany,

   necessarily transgresses  upon the boundaries  erected  by

   our Constitution. It cannot be permitted.

72.We have perused the documents in question, and heard

   the   arguments   of   Union   of   India   with   respect   to   the

   double taxation  agreement with Germany as an obstacle

   to   disclosure.   We   do   not   find   merit   in   its   arguments


  flowing from the provisions of double taxation agreement

  with   Germany.   However,   one   major   constitutional   issue,

  and concern  remains. This is with regard to whether the

  names of individuals, and details of their bank accounts,

  with   respect   to   whom   there   has   been   no   completed

  investigations   that   reveal   wrong   doing   and   proceedings

  initiated,   and   there   is   no   other   credible   information   and

  evidence currently available with the Petitioners that there

  has   been   any   wrong   doing,   may   be   disclosed   to   the


73.Right to privacy is an integral part of right to life. This is

  a cherished  constitutional  value,  and  it is important  that

  human   beings   be   allowed   domains   of   freedom   that   are

  free   of   public   scrutiny   unless   they   act   in   an   unlawful

  manner. We understand and appreciate the fact that the

  situation with respect to unaccounted monies is extremely

  grave.   Nevertheless,   as   constitutional   adjudicators   we

  always   have   to   be   mindful   of   preserving   the   sanctity   of

  constitutional values, and hasty steps that derogate from

  fundamental   rights,   whether   urged   by   governments   or

  private   citizens,   howsoever   well   meaning   they   may   be,

  have   to   be   necessarily   very   carefully   scrutinised.   The

  solution   for   the   problem   of   abrogation   of   one   zone   of

  constitutional   values   cannot   be   the   creation   of   another

  zone of abrogation of constitutional values. The rights of


  citizens, to effectively seek the protection of fundamental

  rights, under Clause (1) of Article 32 have to be balanced

  against the rights of citizens and persons under Article 21.

  The latter cannot be sacrificed on the anvil of fervid desire

  to find instantaneous solutions to systemic problems such

  as   unaccounted   monies,   for   it   would   lead   to   dangerous

  circumstances,   in   which   vigilante   investigations,

  inquisitions   and   rabble   rousing,   by   masses   of   other

  citizens  could  become  the order  of the day. The right  of

  citizens to petition this Court for upholding of fundamental

  rights is granted in order that citizens, inter-alia, are ever

  vigilant   about   the   functioning   of   the   State   in   order   to

  protect   the   constitutional   project.   That   right   cannot   be

  extended   to   being   inquisitors   of   fellow   citizens.   An

  inquisitorial   order,   where   citizens'   fundamental   right   to

  privacy   is   breached   by   fellow   citizens   is   destructive   of

  social order. The notion of fundamental rights, such as a

  right to privacy as part of right to life, is not merely that

  the State is enjoined from derogating from them. It also

  includes   the   responsibility   of   the   State   to   uphold   them

  against   the   actions   of   others   in   the   society,   even   in   the

  context of exercise of fundamental rights by those others.

74.An   argument   can   be   made   that   this   Court   can   make

  exceptions under the peculiar circumstances of this case,

  wherein the State has acknowledged that it has not acted


  with   the   requisite   speed   and   vigour   in   the   case   of   large

  volumes   of   suspected   unaccounted   monies   of   certain

  individuals.   There   is   an   inherent   danger   in   making

  exceptions to fundamental principles and rights on the fly.

  Those   exceptions,   bit   by   bit,   would   then   eviscerate   the

  content   of   the   main   right   itself.   Undesirable   lapses   in

  upholding of fundamental rights by the legislature, or the

  executive,   can   be   rectified   by   assertion   of   constitutional

  principles by this Court. However, a decision by this Court

  that   an   exception   could   be   carved   out   remains

  permanently   as   a   part   of   judicial   canon,   and   becomes   a

  part   of   the   constitutional   interpretation   itself.   It   can   be

  used   in   the   future   in   a   manner   and   form   that   may   far

  exceed   what   this   Court   intended   or   what   the

  Constitutional   text   and   values   can   bear.   We   are   not

  proposing   that   Constitutions   cannot   be   interpreted   in   a

  manner   that   allows   the   nation-state   to   tackle   the

  problems it faces. The principle is that exceptions cannot

  be   carved   out   willy-nilly,   and   without   forethought   as   to

  the damage they may cause.

75.One   of   the   chief   dangers   of   making   exceptions   to

  principles  that have  become  a part of constitutional  law,

  through aeons of human experience, is that the logic, and

  ease of seeing exceptions, would become entrenched as a

  part   of   the   constitutional   order.   Such     logic   would   then


  lead   to   seeking   exceptions,   from   protective   walls   of   all

  fundamental rights, on grounds of expediency and claims

  that there are no solutions to problems that the society is

  confronting   without   the   evisceration   of   fundamental

  rights. That same logic could then be used by the State in

  demanding   exceptions   to   a   slew   of   other   fundamental

  rights, leading to violation of human rights of citizens on a

  massive scale.

76.It   is   indeed   true   that   the   information   shared   by

  Germany,   with   regard   to   certain   bank   accounts   in

  Liechtenstein,   also   contains   names   of   individuals   who

  appear   to   be   Indians.   The   Petitioners   have   also   claimed

  that  names  of all   the   individuals  have  been  made public

  by certain segments of the media. However,  while some

  of   the   accounts,   and   the   individuals   holding   those

  accounts,   are   claimed   to   have   been   investigated,   others

  have not been. No conclusion can be drawn as to whether

  those   who   have   not   been   investigated,   or   only   partially

  investigated   and   proceedings   not   initiated   have

  committed any wrong doing. There is no presumption that

  every account holder in banks of Liechtenstein has acted

  unlawfully.   In   these   circumstances,   it   would   be

  inappropriate for this Court to order the disclosure of such

  names, even in the context  of proceedings under Clause

  (1) of Article 32.


77.The revelation of details of bank accounts of individuals,

  without   establishment   of   prima   facie   grounds   to   accuse

  them of wrong doing, would be a violation of their rights

  to privacy. Details of bank accounts can be used by those

  who   want   to   harass,   or   otherwise   cause   damage,   to

  individuals.  We cannot  remain blind to such  possibilities,

  and   indeed   experience   reveals   that   public   dissemination

  of banking details, or availability to unauthorized persons,

  has led to abuse. The mere fact that a citizen has a bank

  account   in   a   bank   located   in   a   particular   jurisdiction

  cannot be a ground for revelation of details of his or her

  account   that   the   State   has   acquired.   Innocent   citizens,

  including   those   actively   working   towards   the   betterment

  of   the   society   and   the   nation,   could   fall   prey   to   the

  machinations   of   those   who   might   wish   to   damage   the

  prospects   of   smooth   functioning   of   society.   Whether   the

  State itself can access details of citizens bank accounts is

  a   separate   matter.   However,   the   State   cannot   compel

  citizens   to   reveal,   or   itself   reveal   details   of   their   bank

  accounts to the public at large, either to receive benefits

  from   the   State   or   to   facilitate   investigations,   and

  prosecutions   of   such   individuals,   unless   the   State   itself

  has, through properly conducted investigations, within the

  four  corners  of  constitutional  permissibility,  been  able   to

  establish prima facie grounds to accuse the individuals of


  wrong   doing.  It  is  only   after  the  State  has   been  able  to

  arrive at a prima facie conclusion of wrong doing, based

  on   material   evidence,   would   the   rights   of   others   in   the

  nation   to   be   informed,   enter   the   picture.   In   the   event

  citizens,   other   persons   and   entities   have   credible

  information that a wrong doing could be associated with a

  bank   account,   it   is   needless   to   state   that   they   have   the

  right, and in fact the moral duty, to inform the State, and

  consequently   the   State   would   have   the   obligation   to

  investigate   the   same,   within   the   boundaries   of

  constitutional permissibility. If the State fails to do so, the

  appropriate courts can always intervene.

78.The major problem, in the matters before us, has been

  the inaction of the State. This is so, both with regard to

  the   specific   instances   of   Hassan   Ali   Khan   and   the

  Tapurias,   and   also   with   respect   to   the   issues   regarding

  parallel   economy,   generation   of   black   money   etc.   The

  failure is not of the Constitutional values or of the powers

  available   to   the   State;   the   failure   has   been   of   human

  agency.   The   response   cannot   be   the   promotion   of

  vigilantism,   and   thereby   violate   other   constitutional

  values.   The   response   has   to   necessarily   be   a   more

  emphatic   assertion   of   those   values,   both   in   terms   of

  protection of an individual's right to privacy and also the

  protection of individual's right to petition this Court, under


  Clause   (1)   of   Article   32,   to   protect   fundamental   rights

  from   evisceration   of   content   because   of   failures   of   the

  State.   The   balancing   leads   only   to   one   conclusion:

  strengthening of the machinery of investigations, and vigil

  by broader citizenry in ensuring that the agents of State

  do not weaken such machinery.

79.In light of the above we order that:

     (i)       The   Union   of   India   shall   forthwith   disclose   to

               the   Petitioners   all   those   documents   and

               information   which   they   have   secured   from

               Germany,   in   connection   with   the   matters

               discussed   above,   subject   to   the   conditions

               specified in (ii) below;

  (ii)      That   the     Union   of   India   is   exempted   from

            revealing the names of those individuals who have

            accounts   in   banks   of   Liechtenstein,   and   revealed

            to   it   by   Germany,   with   respect   of   who

            investigations/enquiries   are   still   in   progress   and

            no   information   or   evidence   of   wrongdoing   is   yet


  (iii)     That   the   names   of   those   individuals   with   bank

            accounts   in   Liechtenstein,   as   revealed   by

            Germany,   with   respect   of   whom   investigations

            have   been   concluded,   either   partially   or   wholly,


           and   show   cause   notices   issued   and   proceedings

           initiated may be disclosed; and

  (iv)     That   the   Special   Investigation   Team,   constituted

           pursuant to the orders of today by this Court, shall

           take   over   the   matter   of   investigation   of   the

           individuals   whose   names   have   been   disclosed   by

           Germany   as   having   accounts   in   banks   in

           Liechtenstein,   and   expeditiously   conduct   the

           same. The Special Investigation Team shall review

           the concluded matters also in this regard to assess

           whether  investigations  have  been  thoroughly  and

           properly conducted  or  not,  and  on  coming  to the

           conclusion   that   there   is   a   need   for   further

           investigation   shall   proceed   further   in   the   matter.

           After   conclusion   of   such   investigations   by   the

           Special Investigation Team, the Respondents may

           disclose   the   names   with   regard   to   whom   show

           cause   notices   have   been   issued   and   proceedings


80.  Compliance reports shall be filed by Respondents,  with

respect of all the orders issued by this Court today. List for

further   directions   in   the   week   following   the   Independence

Day, August 15, of 2011.

     Ordered accordingly.


                  .............................. ..................J.

                  (B. SUDERSHAN REDDY)

NEW DELHI,        ............................. ...................J. v=jGTcjbHJ8XE (4:03)

Black money comes mainly from India: Assange

Uploaded on Apr 25, 2011
At a stage where governments around the world have tried to hide away from the embarrassment caused by WikiLeaks expose on black money, founder Julian Assange speaks exclusively to TIMES NOW's Editor-in-Chief Arnab Goswami on the Swiss bank data and Indian names features in the same v=WY_JuqhSW04 (2:16:24) 

Dr Subramanian Swamy Lecture on battling corruption in India

Published on Mar 14, 2013

Dr Subramainan swamy speaks on battling corruption in India on July 16, 2011 in Houston, Texas. This lecture was organized by Hindu Mahasabha of America.

Dr Swamy talks about 2G Spectrum scam in details. He also talks about the corruption in India and how to fight against it.

Mr. Swaminathan Gurumurthy on Black Money at IIT-Madras

Published on Feb 20, 2014
A healthy economy thrives, to a large extent, on the money that comes into the country's government account as tax revenue. In the Indian context, as a consequence of extensive tax evasion, the concept of black money has flourished in such a manner that its a common practice among India's uber wealthy. Come catch Mr Swaminathan Gurumurthy, chalk out the ills caused by the black money on the Indian economy. v=PpxmMeXJlgo (52:34)

Vishwa Bandhu Gupta exposes Sonia Gandhi Black Money (हिंदी) v=1UxVUhCc7xM (15:12)

SONIA GANDHI : Truth about Hasan Ali, Black Money : 2-2 Uploaded on Jun 28, 2011

Italian Bitch Sonia led UPA/Congress ne INDIA/Hindustan ko LOOT liya...
Watch how Italian and Swiss Banks are involved here. v=OYA90kMizX4 (15:13)

SONIA GANDHI : Truth about Hasan Ali, Black Money : 1-2 v=piv08m9mDdI

Ram Jethmalani 29 Dec 2011 Black Money of Rajiv Gandhi v=BV7rUDzIjN4 (3:54)

Hassan Ali a frontMan of Sonia Gandhi Swiss Bank Accounts

Uploaded on Jul 14, 2011
Hassan Ali is a proxy for Sonia Gandhi's Swiss Bank account as the password of Hassan Ali account is with Sonia Gandhi as told by him in interogation. Subramanian explains how he was a proxy for Sonia Gandhi account to hide black money of Sonia Gandhi.

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