Legendary lawyer Ram Jethmalani, who passed away exactly a year ago, has appeared in several high profile cases, very often swimming against the tide of popular sentiments. While the manner in which he turned the fate of several cases using his quick-witted advocacy, erudition and dauntlessness continues to be celebrated and discussed, there is one case, perhaps the one closest to his heart, which is now fading away from public memory.
That is the black money case -the Public Interest Litigation filed by Mr.Jethmalani as a petitioner before the Supreme Court seeking steps to bring back the unaccounted money taken away from India to be stored in off-shore bank accounts in tax havens.
Here is the story of how Jethmalani took up the issue, steadfastly pursued it, then felt betrayed by those who he had counted upon in his battle, felt anguished at the unexpected turns in the course of the case, and how the case itself gradually went into a limbo.
Mr.Jethmalani, who had always been vocal about several public issues plaguing the country, played a significant role in inviting the public attention to the problem of unaccounted wealth earned in India being stashed in foreign tax havens, which he estimated to be about Rs 90 lakh crores of rupees. It was during 2009 – when allegations of scams related to 2G spectrum auction and coal block allocations were rocking the UPA government – that he filed the PIL in the Supreme Court along with five other petitioners.
The Petitioners mainly raised the following concerns :
- The massive volume of unaccounted monies indicates 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;
- These funds are then laundered and brought back into India, to be used in both legal and illegal activities;
- Unlawful networks of international finance are used for illegal transfer of funds across borders. Such unlawful networks also aid various crimes committed that may be classifiable as terrorist, extremist, or unlawful narcotic trade
- The problem has very serious connotations not only for the economy but also for the security and integrity of India
The issue suddenly became a hot public debate. The Supreme Court too moved along with the mood of the nation and did not shy away from questioning and often rebuking the Central Government over its inaction(quite a rare sight these days).
On July 4, 2011, a SC bench of Justices B Sudershan Reddy and Surinder Singh Nijjar constituted a Special Investigation Team(SIT) with former SC judges Justice B P Jeevan Reddy as the Chairman and Justice M B Shah as the Vice-Chairman to monitor and guide the investigation related to the stashing of unaccounted monies in foreign bank accounts by Indians or other entities operating in India.
While ordering so, the Court came down heavily on the Central Government for being evasive in its responses in the case :
"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
…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".
Expressing concerns at the attitude of the Union Government, the SC said that an investigation by a SIT under the monitoring of the Court was necessary(On May 1, 2014, the apex court reconstituted the SIT by appointing former SC judge Justice Arijit Pasayat in place of B P Jeevan Reddy, after the latter expressed personal difficulties to continue as its Chairman).
The Court said the issue of black money indicated a "failure of state" and observed that a resolution of the problem was of "primordial importance to the welfare of the citizens".
The intervention of the Court gave momentum to public debates on black money. In the 2014 general election, this became a major political plank and the BJP made a promise in its election manifesto that steps will be taken to bring back black money from abroad and to prosecute the violators. In the election speeches, Mr. Narendra Modi, who later went on to become the Prime Minister, repeatedly said that if the money hoarded abroad is brought back, every poor Indian would get Rs 15 lakhs in their accounts.
Unexpected turns in the case post-2014
After the NDA government came to power in May 2014, the case witnessed certain unexpected turn of events.
In October 2014, Mr.Jethmalani shot off an angry letter to the then Union Finance Minister, Mr. Arun Jaitley, accusing him of trying to help the "biggest criminals to escape".
The trigger for the letter was an application filed by the new government in the court stating that the names of persons who have deposited money in offshore accounts cannot be disclosed. The Centre stated that such disclosure would violate the Double Taxation Avoidance Treaties(DTAT) with foreign nations.
Now, a short recap here to events before 2009: Liechtenstein, a small land-locked country in Europe, is a famous tax haven. A former bank employee 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, which, apart from initiating tax proceedings against some 600 individuals, also expressed willingness to share information about nationals of other countries.
In 2009, Mr.Jethmalani and other petitioners had urged the top court to direct the Union Government to procure such information which Germany was willing to share and disclose the same. However, the Union had then taken a stand that the disclosure of names based on the information obtained from Germany will violate the terms of the DTAT with Germany. In 2011, the SC had specifically rejected this contention, after reaching the conclusion that information related to money hoarders was not within the scope of DTAT.
"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...
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", the SC observed in the order passed on July 4, 2011.
Jethmalani vs Jaitley
In October 2014, the newly sworn in NDA government, much like the previous incumbent, sought to take cover under the DTAT to stall the disclosure of foreign account holders, making Mr.Jethmalani furious.
Stating that the application to seek exemption from disclosure "should have been made by the culprits and not by the government", he wrote to Jaitley :
"You were the Leader of opposition when the Germans announced that they were willing to share the names with any friendly country without cost or condition. No one from the Government moved for the obvious reason that in all likelihood, according to me bigwigs in the ruling party were involved. The Germans never spoke of DTAT. Our people deliberately brought it in as a certain method of rendering the entire investigation futile and making our corrupt rulers escape arrest and prosecution. It was your duty as leader of opposition in the Rajya Sabha and Sushmaji's duty in the Lok Sabha to establish immediate contact with the Germans to get at the names. I strongly suspect that your conduct shows that you too like many others do not want truth to come out. Your public statements the thing on one say and another the next day are product of a troubled conscience and mental confusion, a deadly combination."
Jethmalani lashed out that the petition filed by the Finance Minister in the Supreme Court is "one of the most ill advised steps taken".
In no mood to mince words, the nonagenarian lawyer then said :"The DTAT or any equivalent document is not to be used and cannot be used. We are not dealing with persons or entities who by the Law of India and Germany are liable to pay tax in both countries on the same income. About 18 names are supplied to me under orders of the Hon'ble Court. Crooks like Hassan Ali do not exist amongst them. It is most unfortunate that you continue to act only on DTATS. This only shows your determination not to get any culprit apprehended or even identified." (The complete letter sent by Jethmalani to Jaitley may be read here)
Following his outburst against Jaitley, Karanjawala & Co decided to withdraw from the case as the Advocate-on-Record of Jethmalani.
The Court was not appreciative of the stand taken by the Centre.
"Why are you having a protective umbrella for the foreign bank account holders", it asked the Centre.
The Court asked the Centre to submit the names in a sealed cover to it. The Court also permitted the petitioners to submit their suggestions on the way forward to bring back black money before the SIT and asked it to consider them.
Meanwhile, Jethmalani also took objection to the Solicitor General (who was then Mr.Ranjit Kumar, Senior Advocate) appearing for the SIT on the ground of conflict of interest.
"This is clear conflict of interest. How can a law officer for the union of India appear for SIT? SIT is an independent party in the case and has been set up on the orders of the court", Jethmalani told the Court.
Following that, Senior Advocate Soli Sorabjee, started appearing for SIT.
Jethmalani was present in the court on the days of hearings, though Senior Advocate Anil Divan was appearing for him, and often used to make submissions too, with the leave of the bench.
On May 12, 2015, the Jethmalamni expressed before the Court his anguish at the unsatisfactory progress in the probe.
He told a bench headed by the then CJI H L Dattu that the government's promise to bring back illegal money stashed abroad was "worse than an illusion" and a "fraud on the nation".
He alleged that the government "has no intention to proceed against those stashing black money as the persons in power appear to be involved in it".
His oral remarks were supplemented by a strongly worded affidavit filed by him, in which he alleged that the Government blocked the publication of his hard-hitting column in 'The Sunday Guardian', which was written by him to convey his sense of frustration at the lack of serious efforts to repatriate black money. He said that he later got the column published in the 'Indian Express' as an advertisement after paying Rs 13 lakhs.
In the affidavit filed in the apex court, he stated that the then BJP President, Mr. Amit Shah, on being asked in an interview about the promise to bring back black money, had said "Modijis statement during Lok Sabha poll campaign was just a political jumla'"
He further contended that the non-invocation of United Nations Convention Against Corruption (UNCAC) by the Union of India was indicative of the Government's lack of will in getting back black money.
The affidavit also reflected his grievance regarding non-furnishing of relevant correspondence between Germany and India, regarding Liechtenstein Bank accounts to him in violation of the directions of the Court. He stated that the apex court on July 4, 2011 and May 1, 2014, had directed the Government to share the information obtained from Germany regarding the foreign accounts to the petitioners. However, he complained, that the copies served on him had the names and addresses of the account holders blacked out.
Further, he said that the proposed legislation to curb black money - The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 – was ineffective and had several loopholes. He opined that the Bill deliberately prevented the vesting of the stolen money and the ownership of accounts in the Union of India, allowing disappearance of money and closing of the accounts.
"If such stolen money and all relevant accounts is vested in the Union of India, then all the details of foreign bank accounts right from the inception and opening till date would be available with the Union of India as the owner of these accounts and further no money would disappear from the accounts. This would facilitate the identification of wrongdoers", he explained.
The Bill was passed unto law in May 2015, without the provisions suggested by him for the vesting of unaccounted money in foreign accounts in the Union.
"I am filing this affidavit because my conscience tells me that this Hon'ble Court should realize how the great judgment of 4th July 2011 is being reduced to a farce", he said with great sorrow.
Stating that the things were evident before the Court, he urged it to pass the necessary directions.
"I respectfully submit that it is evident what should be done in the matter and it is for this Hon'ble Court to decide what directions should be issued", he said(The complete affidavit filed by Jethmalani on May 11, 2015, may be read here).
As per the information available in the Supreme Court website, the case was last listed before the Court on April 26, 2016. Though there was a direction then to list the case next on May 11, 2016, there was no such listing. For reasons unknown, the case has not witnessed any action ever since, over the last four years.
The SIT has submitted five reports so far in sealed covers before the Court. Like a mythical treasure guardian, the Supreme Court is closely guarding secrets related to off-shore accounts that have parked unaccounted money from India. An explosive mine of information – which could rejuvenate the nation's dropping economy to turn the course of its progress, as the incumbent Prime Minister promised in 2014 – is lying dormant in sealed covers in SC registry.
The fierce response shown by the Court in 2011 to the menace of black money is now a distant memory. As the issue started receding from public memory, the Court also seems to have lost its zeal to pursue the case.
In 2017, a totally disillusioned Jethmalani said :
"…I am the unhappiest man in this country…I am unhappy because not one promise has been fulfilled to the people of India. I am in deep agony and have a sense of disappointment."
Jethmalani's passing away cannot result in the abatement of the case, as there are four other petitioners too, apart from certain intervenors like Rajya Sabha MP Dr. Subramanian Swamy.
Moreover, the Supreme Court itself had highlighted that the case was of paramount importance for the welfare of the nation while ordering a court-monitored SIT probe into the matter.
Perhaps, taking this case to its logical end will fulfill Jethmalani's last wish and could be the most perfect tribute to the doyen of the bar.