Observations that put govt on the mat

T. N. Pandey | Updated on July 29, 2011

Since quite some time, arguments between the government of India and the Supreme Court (SC) regarding the disclosure of documents and names of Indians, holding foreign bank accounts, have been were in progress. The issue has now been decided by the court in the case of Ram Jethmalani & Others. V the Union of India in its order dater July 4, 2011. It relates to various bank accounts of Indian citizens in the Principality of Liechtenstein (‘L' for short) – a small landlocked sovereign nation State in Europe, a tax-haven destination.

The court examined whether the government could have sought and secured the names, documents and information concerning such persons, without recourse to DTAA, saying it is not relevant, when the petitioner's case was that Germany offered to give the information freely to any country desiring it.

The important observations of the court in the order are:

DTAA with Germany itself does not proscribe the disclosure of relevant documents and details of the accounts which Germany has obtained from ‘L'. Article 26 of the DTAA does not have any absolute bar of secrecy;

the government gave no evidence that Germany refused to furnish details in the context of even proceedings before the court; the last sentence of Article 26(1) of the DTAA with Germany that they may disclose this information in public court proceedings or in judicial decisions is revelatory in this regard;

to deny access to the information with the government without citing any constitutional prohibition tantamounts to thwarting the right granted by Article 32(1) of the Constitution;

unless constitutional grounds exist, the State cannot act in a manner that hinders rendering complete justice by the court; in upholding fundamental rights, the State cannot be an adversary; and information to the petitioner can be withheld only “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 – not for other reasons”.

Right to privacy

Though there is no obstacle in DTAA to disclosure, the court has made a caveat saying that since the right to privacy is an integral part of right to life, there could be no presumption that every account in banks in ‘L' is unlawful. The State cannot compel citizens to reveal or itself reveal details of their bank accounts to the public at large unless there are prima-facie grounds about wrong doings.

The court's order raises some important issues:

When Germany offered to disclose names given by ‘L' freely, why did not the government get the same?;

When DTAA did not prohibit giving of information, why did the government deny information,?;

Why even an assurance was not given that names would be disclosed after enquiries and action is taken as now directed by the apex court?; and

The court's observations that ‘it is disingenuous for the government to repeatedly claim that it is unable to reveal the documents on the ground that the same is proscribed by the said agreement' (when there is no such bar) shows that criticism and litigation on this issue have been, consequent to the government's confused handling of the matter.

The court has entrusted enquiries to Special Investigation Team, constituted by it, which is indicative of inept handling by the government.

(The author is a former chairman of CBDT.)

Published on July 23, 2011

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