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reproduce below some excerpts from the Supreme Court Order of 4 July 2011, in a case filed by me, Ram Jethmalani and Others vs Union of India and Others, popularly known as the Black Money Case.
The Court applied its mind over a broad canvas covering all direct
and indirect repercussions of the black money issue, including national
security. The excerpts:
"(i) 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 ... 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.
"(ii) 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.
"(iii) Unaccounted for 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.
"(iv) Beyond a particular point, the State may spin into a vicious cycle of declining moral authority.
"(v) The issue of unaccounted for monies held by nationals, and other
legal entities, in foreign banks, is of primordial importance to the
welfare of the citizens.
"(vi) It may very well reveal the degree of 'softness of the State'.
"(vii) 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.
"(viii) The State provides violent support to those who benefit from
such predatory capitalism, often violating the human rights of its
citizens, particularly its 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.
"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.
"(ix) 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 for monies are generally an indication of that.
"(x) Consequently we have to express our serious concerns from a
constitutional perspective. The amount of unaccounted for monies, as
alleged by the Government of India itself is massive.
"(xi) 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. Including but not limited to
evasion of taxes.
"(xii) The petitioners also further contend that a significant part
of such large unaccounted for 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 for monies, the consequent tax evasion; and that
such laxity extends to efforts to curtail the flow of such funds out of,
and into, India. Governments efforts have been weak or non-existent.
"(xiii) Enforcement Directorate, in 2007, disclosed that Hassan Ali
Khan had "dealings amounting to 1.6 billion US dollars" in the period
2001-2005. He had amassed 8.04 billion dollars with UBS Bank in Zurich.
"(xiv) Contrasting the relative alacrity, and vigour, with which the
United States Government had pursued the matters, the petitioners
contend that the inaction of the Union of India is shocking.
"The petitioners further allege that in 2007, 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 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 licence in India, which was approved in
principle by RBI initially. In 2008, this licence was withheld on the
ground that 'investigation of its unsavoury role in Hassan Ali Khan's
case was pending investigation in the Enforcement Directorate'. However,
it seems that RBI reversed its decision in 2009, and no good reasons
seem to be forthcoming for the reversal of the decision of 2008. 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.
"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.
"Counsel for the Union of India 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 petitioners.
"(xv) 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 Court that the Enforcement Directorate initiated and secured
custodial interrogation of Hassan Ali Khan.
"(xviii) 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 an SIT
constituted by this Court, and acting on behalf, behest and direction of
this Court.
"(xix) 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."
In the above excerpts, the Supreme Court has in polite judicial
language, found that the ruling government is either infested with black
money brigands or is controlled by them. It cannot be trusted to
investigate, prosecute or recover the stolen assets, and the Court is
therefore compelled to act.
To be continued...
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