With close to 70 lakh crores ( 70,000,00,00,00,000 ) of unaccounted public money stashed by politicians, bureaucrats and the rich in swiss banks and the like abroad, how does one get hold of that money ? The answer probably could be the latest writ petition in the Supreme Court wherein the petitioners have asked the Court to interfere in compelling the government to take actions to get the money back to India. While it is a noble cause, I opine that the Supreme Court interfering in this may not work.
To understand, let’s take the case of Germany and LGT Bank of Liechtenstein. In January 2006, the German Government offered 5 million Euros to a bank officer of LGT bank asking him to give out confidential data of the clients and accounts of LGT bank. After a successful transaction in this regard, the German Government then went on to catch of the tax evasionists responsible and started prosecuting them. The amount of fraud is said to have exceeded 5 billion Euros now.
In its aftermath, the bank officer has been offered asylum in Germany and the German Government is now putting pressure over the European Union and the OECD to take measures into compelling these banks to be more transparent. In times of recession, this may be fruitful, but nevertheless, none of these banks can be compelled to give up the money that they own. (See timeline and EU Actions here)
Coming back to India, if we are to create a parallel to the German situation, the following issues would arise;
- Can the Indian Government pay somebody to do an illegal act in another country ?
- Going further, can the Court issue a writ of Mandamus to ask the Government to do such an illegal act?
- Even if the above can take place, there is no way of recovering the money but only to use the data to prosecute those for tax evasion. Neither the executive or the judiciary can do otherwise.
While one possible solution could be that while prosecuting these tax evasionists/ those holding up the money in these accounts, we offer them an immunity as an incentive if they get back the money; this could possibly lead to litigation and a replay of the Bearer Bonds case (RK Garg v. Union of India , 1979 SC). In the sense that, Indians charged for evasion in India would allege that this is arbitrary, unfair and against the mandate of Article 14 and is creating a difference between those stashing money abroad and evading income tax and those being prosecuting for evading income tax in India.
This is a complicated issue and I don’t think the Court’s can and should interfere. In the debates conducted, the speakers did come together on the fact that the Constitution does authorize the Court to interfere and ‘make law’ but they still agreed that it must keep out of policy matters and things it expressly cannot do and implement. It would then be interesting to see the way the Court handles this PIL.