SC appoints SIT to probe black money issue

Supreme Court appoints Special Investigation Team (SIT) headed by ex-Apex Court judge to probe black money issue

Pulling up the government for the “laggardly pace” in investigations into the issue of Blackmoney stashed abroad, the Supreme Court on Monday appointed a Special Investigation Team (SIT) headed by former Apex Court judge B P Jeevan Reddy to investigate and monitor steps taken to bring the unaccounted money back home. Another former Apex Court judge M B Shah will be Vice Chairman of the 13-member SIT into which Director of Research and Analysis Wing (RAW) has been inducted.

A bench comprising Justices B Sudershan Reddy and S S Nijjar, which is seized of the issue raised in a PIL by noted jurist Ram Jethmalani and others, pronounced the order saying monies generated and secreted away reveal the degree of “softness of the State”.

The court rejected the demand for disclosing the names of individuals which had figured in the list given by German government but ordered giving out the names of those against whom show-cause notices have already been issued and prosecution has taken place.

It criticised the government over the handling of blackmoney cases saying that despite issues of large sums of unaccounted monies, allegedly held by certain named individuals, and loose associations of them, “the investigations into the matter proceeded at a laggardly pace”.

However, the Court exempted the government from revealing the names of those individuals who have accounts in banks of Liechtenstein and revealed by Germany with respect of which investigations are still in progress and no information or evidence of wrong doing was yet available.

“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,” the bench said.

“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,” it added.

The court said during the 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.

Listing worries arising out of the unaccounted monies stashed away in foreign banks, the bench said “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”.

In their PIL, Jethmalani and some former bureaucrats had sought the court’s direction to the government to bring blackmoney stashed by Indian nationals in foreign banks, which is said to be to the tune of 1 trillion US dollars.

Former Punjab DGP K P S Gill and former Secretary General of Lok Sabha Subhash Kashyap, who are among the petitioners, have alleged that the government was not taking action to bring the back blackmoney stashed in foreign banks.

NGO People’s Political Front and former top cop Julio F Riberio are also among the petitioners.

During an earlier hearing, the government had told the court that it had constituted HLC headed by the Revenue Secretary.

It included directors of CBI, Intelligence Bureau, Enforcement Directorate, Chairman of CBDT, and Director General of Revenue Intelligence, Director General of Narcotics Control, Director of Foreign Intelligence Office (FIO) and Joint Secretary of Foreign Trade. The Apex Court observed that the unaccounted money going abroad is a reflection of compromise of the government’s ability to manage the affairs of the state according to constitutional perspective.

“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,” the court said.

It said that the failure of the government to control the phenomenon of blackmoney stashed in foreign banks is an indication of weakness and softness of the state in managing its affairs.

“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 court said.

It said, “A substantial degree of incapacity, in the above respect, would be an indicia of the degree of failure of the State”.

Justifying its decision to constitute the SIT, the bench said that there was lack of seriousness on the part of the government to take take firm action against the person accused of stashing unaccounted money in foreign banks.

The court also raised concern over the Centres decision for granting licence to a Swiss bank UBS whose credentials have come under suspicion.

Moreover, the Centre 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,” the court said.

(Agencies)