LexRAM JETHMALANI AND ORS. versus UNION OF INDLA AND ORS.
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• [2011) 8 S.C.R. 725 RAM JETHMALANI AND ORS. v. UNION OF INDlA AND ORS. (Writ Petition (Civil) No. 176 of 2009.) JULY 04, 2011 [B. SUDERSHAN REDDY AND SURINDER SINGH NIJJAR, JJ.] Administrative law: Writ petition filed by former Union law minister - Allegation regarding transfers and accumulation of unaccounted monies by many individuals and other legal entities in foreign banks - Petition specifically named Hassan A B c Ali and Tapurias as party to such illegal activities - Supreme D Court expressed its concern 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 also expressed worries also with regard to the nature of activities that such monies may engender, both in E 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 - Union of India did not give satisfactory explanation for slowness of the pace of F investigation - It was only upon the insistence and intervention of Supreme Court that the Enforcement Directorate initiated and secured custodial interrogation over Hassan Ali Khan - Union of India explicitly acknowledged that there was much desired with the manner in which the investigation had proceeded prior to the intervention of the G Court - Union of India, on account of its more recent efforts to conduct the investigation with seriousness led to the securing of additional information, and leads, which could aid in further investigation - During the continuing interrogation 725 H 726 SUPREME COURT REPORTS [2011] 8 S.C.R. A of Hassan Ali Khan and the Tapurias, undertaken at the behest of the Supreme Court, many names of important persons, including leaders of some corporate giants, politically powerful people, and international arms dealers cropped up - Supreme Court proposed to the Union of India B that the High Level Committee constituted by it be converted into a Special Investigation Team, headed by two retired judges of the Supreme Court of India - Union of India to issue appropriate notification and publish the same forthwith. Concept of a "soft state" - Held: Is a broad based C 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 - The issue of D 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 E 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." Public function - Responsibilities of State - Discussed. F Fragmentation of administration - Effect of - Discussed. Double Taxation Avoidance Agreement: Writ petition - Allegation regarding transfers of monies, G and accumulation of monies, which are unaccounted for by many individuals and other legal entities in the country, in foreign banks - Disclosure sought by the petitioners of certain documents relied upon by the Government - Supreme Court strongly disapproved the stand taken by the Government that H the names of the tax evaders was a "secret" and could not be • • RAM JETHMALANI AND ORS. v. UNION OF INDIA 727 AND ORS. revealed under the lndo German Double Taxation Avoidance A Agreement - The said agreement, by itself, did 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 B 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 c taxation agreement between the two countries - In fact, the
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