Preliminary Submission 26.10.2014 – (2)

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

I.A No. 14 OF 2014

IN

WRIT PETITION No. 176 OF 2009

RAM JETHMALANI & ORS.                           PETITIONERS

                                                                                                                   V/S

UNION OF INDIA & ORS.                        RESPONDENTS

 

AFFIDAVIT IN REPLY OF PETITIONER No. 1, OPPOSSING I.A. NO. 14 / 2014 FILED BY UNION OF INDIA

I, Ram Jethmalani, s/o Late Bhoolchand Jethmalani, age 91 years, resident of 2 Akbar Road, New Delhi, the Petitioner no. 1 in the main Writ Petition [W.P (Civil) 176 of 2009]. I am well conversant with the facts of the case and competent to file this reply and make my submissions that the I.A No. 14 of 2014 should be dismissed in limine.

1. I submit that the Petitioners are entitled to file a full reply which is not possible because of the facts stated herein. The Copy of the present application runs into 4 volumes and 1214 pages and was served on the Advocate on Record on 16.10.2014 (Thursday), and mentioned by the Union of India (UOI) on 17.10.2014 and the Hon’ble Court was pleased to fix the matter on 28.10.2014 (Tuesday). The application apart from covering 4 volumes and 1214 pages has several blanks and exhibits as ‘translations’ which have not been authenticated. The week commencing 20th October 2014, was a vacation week (Diwali holidays) when all offices and chambers were closed. Consequently adequate time for a full reply has not been given and Petitioners reserve their right and humbly request for adequate time to file a detailed affidavit.

The present affidavit is confined to preliminary submissions / objections and certain further general comments, while reserving a right to file a detailed affidavit. In the meanwhile all the averments, contentions and allegations in IA NO. 14 of 2014 are denied and not admitted except regarding matters and orders on record. The rest of the present reply affidavit is without prejudice to the aforesaid submissions.

 

  1. Preliminary Submissions

The Preliminary Submissions are dealt with under the following heads;

i. Union of India (UOI) is resiling and going back even on earlier stand of the previous administration.

ii. The Present application is an attempt to make the Special Investigation Team (SIT) dysfunctional and toothless by depriving it of material and information.

iii. The application is not bonafide and is an abuse of process of the court. It contains misstatements of facts and relevant legal propositions.

iv. The application is not maintainable for diverse reasons set out herein below.

 

 

  1. Detailed submissions under each of above heads

 

  • UOI is resiling and going back on EVEN the stand of the previous administration

 

The respondent UOI had accepted the directions in the judgment dated 04.07.2011 (2011) 8 SCC 1, (per Justices Sudershan Reddy and Justice S.S. Nijjar) in connection with the disclosure of information and documents supplied by Germany regarding the Liechtenstein Bank accounts. In fact the former Solicitor General had stated that the said directions are being complied with by sending the relevant information and letters to me (Petitioner No. 1).

The brief relevant facts are as under:-

I.A 8 of 2011 was filed on 15.07.2011 after retirement of Justice Sudershan Reddy on 08th July 2011. I.A 8/2011 only prayed for recall of directions regarding formation of the SIT. It did not ask for recalling of directions regarding the Liechtenstein Bank Accounts or any clarification or modification in regard to those directions.

 

The present administration has resiled from this position and now after over 3 years is praying for modification/clarification of the judgment and order dated 04.07.2011 in connection with the disclosure regarding Liechtenstein Bank accounts of Indians.

It is submitted that UOI as a litigant has not only accepted the judgment for over 3 years and cannot now backtrack and is bound and estopped by the fact that the directions were not challenged by it regarding Liechtenstein Bank accounts, but have been purportedly complied with (though this is disputed by the Petitioners) pursuant to the Supreme Court’s orders dated 04.07.2011, 26.03.2014 (dismissing I.A. No. 8 after the Supreme Court Order read with the letter of the Former Solicitor General dated 27.05.2014 (Annexure R-9 Vol. I pages 210-216).

  1. Application an attempt to make SIT dysfunctional and toothless

If the prayers regarding modification and clarification are granted, then UOI or any other affected party can contend that SIT which is not a statutory Income Tax authority cannot have access to relevant information, documents and facts regarding foreign bank accounts of Indians which are used for parking illicit money. It is submitted that this undisguised and disingenuous attempt to deny information (with possible co-operation of the State transmitting the information to India.) will have direct effect of curtailing the powers, functions and duties of the SIT constituted under of orders of this Hon’ble Court, dated 04.07.2011 read with subsequent orders and by notification dated 29th May 2014 (Annexure R-12 Vol I page 233-236) and make it dysfunctional and toothless. The attempt is to put the clock back which was not even attempted by the previous administration. An argument and contention that SIT is not an Income tax authority or official, will doubtless be advanced by concerned parties with a view to cripple the SIT. The Code of Criminal procedure itself contemplates inquiries by non-official persons into cognizable offences reasonably suspected to be such.

  1. Application is not bonafide and is an abuse of process of the Court.
  • The present application in substance is another subsequent attempt to review the judgment and order date 04.07.2011 (2008 8 SCC 1).

The first attempt at review was made by IA 8 of 2011 which only prayed for recall of the directions constituting the SIT and which came to be dismissed vide order dated 26.03.2014.

  • The Supreme Court has repeatedly criticized and frowned upon applications for modifications / clarifications, which are nothing but review applications and have rejected such applications in series of cases. The leading case is of Zahira Habibullah Sheikh vs. State of Gujarat (2004) 5 SCC 353, a small passage is cited below.

Rejecting an application filed by the State of Gujarat it was held:

“The petition is in essence and substance seeking for a review under the guise of making an application for direction and modification …… The said move is clearly misconceived and nothing but sheer abuse of process, which of late is found to be on the increase, more for selfish reasons than to further or strengthen the cause of justice. The device thus adopted, being otherwise an impermissible move by mere change in nomenclature of the applications does not change the basic nature of the petition.” (Para 4 at page 358)

“The court should not permit hearing of such an application for “Clarification”, “modification” or “recall” if the application is in substance a clever move for review.” (Para 7 at page 359)

“In that background, we could have straight away and summarily too dismissed the application with exemplary costs for the blatant abuse of the process of law as was done by the applicant State.” (Para 8 at page 359)

 

In that connection also see the following:

  • Satya Jain vs Anis Ahmed Rushdie (2013) 8 SCC 147 para 11 & 12 at page 151;
  • Union of India vs Sandur Manganese & Iron Ores Ltd (2013) 8 SCC 337 at para 9 to 12 at page 340-341;
  • 2004 (12) SCC 713; Ram Chandra Singh vs. Savitri Devi at para 13 page 717 and para 15-17 page 717-718;
  • 2000 (7) SCC 296; Delhi Administration Vs. Gurdip Singh – para 9 at page 306, para 18 page 309, para 20 at page 310);
  • 2007 (2) SCC 466: A.P. SRTC vs. Abdul Kareem;
  • 2004 (5) SCC 222: Common Cause vs. UOI;

 

The differing judgments of Justice Altamas Kabir and Justice SS NIjjar (2011) 9 SCC 751, on the maintainability of IA 8 of 2011 also observe that IA 8 of 2011 in substance be treated as a review application. The relevant passages are at para 21 page 761 (Justice Altamas Kabir) & para 45 pg 768 (per Justice SS NIjjar) are relied upon.

 

(c) Under present order 47 Rule 5 (Old Order 40 Rule 5) of Supreme Court Rules a second review application is barred.

(d) According to the present application another review application dated 08.05.2014 has also been filed (Ann R-13 Vol I pages 237-311), which may be characterized as the second review application.

In that event this application is the third review application. (The Petitioner is not aware of the same and is also not aware whether any order has been passed thereon.)

6. The present application is not maintainable because of the following reasons:

A. The application is beyond the period of 30 days, and is barred under Order 47 which prescribes a period of 30 days. The present application wants inter-alia to modify / clarify the order dated 04.07.2011 and 26.03.2014, well beyond the period of limitation.

B. The affidavit filed by Sri. Akhilesh Ranjan, Joint Secretary, Department of Revenue dated 29.04.2014 had raised contentions similar to the contentions raised in the present application. After considering the same, this Hon’ble Court has passed the order dated 29.04.2014 and also the order 01.05.2014. Pursuant to those orders, a letter dated 27.05.2014 (Annexure R-9 Vol I page 210-216) was sent by the former Solicitor General of India Sri. Mohan Parasaran, purporting to comply with the same (which is disputed because all correspondence was not sent) by sending information and correspondence sent by Germany to India. In view of the above the present application is not maintainable.

C. The affidavit in support of the present application dated 15.10.2014 at pages 38-39 is defective and not as required by Order IX of the Supreme Court Rules. The verification is absurd and not even intelligible (see page 39 of Vol I). For instance the source of the documents referred to and relied upon in IA under reply has not been mentioned; Further two Annexures R-10 (vol I pages 217- 219) and R-17 (vol III page 889-892) purport to be translations of original documents, (which originals have not been produced) nor is there any material produced to say who has translated the same. There is no application for exemption from Official Translation and is in clear breach of Rules 2 to 4 of Order 8 of the Supreme Court Rules, 2013; The affidavit in support of the present IA does not disclose the source of any of several documents referred to and relied upon (nor certified copies produced) in the IA. The authenticity and accuracy of which therefore is debatable and therefore denied.

D. The I.A No. 14 /2014 contains several vague statements and phrases used not only without giving the source or particulars, but documents on which they are based, (para 24 page 16), ‘International standard’ para 25-26, pg 17-18, the Protocol to Germany have not been disclosed. I met the German Finance Ministry official in March’13 and I have recorded truthfully what transpired in my letter after my return. This document is available with UOI and the BJP. It would be useful to mention that this Hon’ble Court vide its order dated 20.08.2014 had requested to furnish copy of this letter to Additional Solicitor General. Copy of order dated 20.08.2014 and letter dated 29.03.2014 are herewith produced as Annexure P1/1 pg     to.

E. Under the Indian Evidence Act foreign law, is a matter of fact and has to be proved as mentioned therein. There are allegations about German and U.S law etc. without proving the same in the manner prescribed by law.

F. The UOI has failed to comply with the direction of this Hon’ble Court of supplying all the relevant document and information given by German authorities to India as it has withheld and not supplied the letter dated 09.02.2011 (Annexure R-17 Vol III page 889-892) and the letter of Sri. Sanjay Kumar Mishra referred to therein. The UOI is in contempt for not complying with the Supreme Court orders and for deliberately suppressing and not sending to Petitioners the above two letters. I deny that the German Government had imposed any obligation of confidentiality. This so called defense was manufactured by the previous Government and is being repeated by the present one without any sanction from the Cabinet.

 

It is submitted that the correct procedure for either modifying, overruling or distinguishing a judgment is when a legal controversy arises in a subsequent case. Any judgment of Supreme Court can only be modified either on review (which is not permissible in this case in view of the facts mentioned above) or in a subsequent litigation where the question arises as to whether the observations or ratio can be either disapproved, overruled, distinguished or explained.

The present IA 14/2014 falls foul of this well settled principle of dealing with earlier judgments, which have reached finality.

II

  1. General & Cardinal Factors and issues arising from the present application.

Re: Accounts of Indians in Geneva, Switzerland.

It is common knowledge and appears that the Hong Kong and Shanghai Bank (HSBC) had a branch or a subsidiary in Geneva, Switzerland (for short HSBC – Geneva). Certain employees stole data with respect to about 50,000 accounts maintained in HSBC-Geneva. The CDs containing the above information were purchased/obtained by the French Government and used inspite of protest by the HSBC, which characterized it as ‘stolen data’. The French Government made available this information and names, so far as India is concerned to the Central Government (UOI) in or about 2011. This information has nothing to do with Double Taxation Avoidance Agreement (DTAA) with France as the DTAA agreement would only apply to questions in relation to Double Taxation suffered by French and Indians doing business in both countries. The situation is similar to the one regarding the Liechtenstein Bank accounts where the Supreme Court by its judgment dated 04.07.2011, has clearly held that DTAA between India and Germany had no application. It is submitted that, the attempt to conceal these names and information under the guise of DTAA is not only disingenuous, but completely contrary to the Supreme Court judgment. It is a motivated attempt by the UOI, which desires to protect and conceal the names of powerful individuals in business and politics, in the same manner as the previous administration. This is in the light of the contention in the writ petition namely,

“tax evaders and wrongdoers most of whom are occupying the upper decks of India’s social, business and political life.” (Page 3 of W.P 176 of 2009) and “The petitioners verily believe that this colossal failure to enforce the law and get back the stolen property of the Indian nation, is due to the fact that the influential politicians in most of the political parties, are involved in the offences in question. (Page 4 of W.P 176 of 2009)”

Concealment of this information, from the public domain, by UOI can be used as a powerful political weapon to control and intimidate the concerned individuals whose illicit accounts are in the said HSBC-Geneva Bank. It is submitted that there is no question as to why these names cannot be disclosed as the DTAA between France and India does not apply and selective concealment is wholly unjustified. It is therefore prayed that this Hon’ble Court be pleased to direct immediate disclosure of the entire correspondence, information and names of such account holders furnished by the French Government as directed by the Judgment of 04.07.2011 to the public, which directions were complied with by the UOI. Every DTAA is the product of negotiations between two Governments. In India the authority to enter into such a treaty or arrangement by whatever name called is under Section 90 of the Income Tax Act, 1961 (ITA). No confidentiality can be accepted by the Government of India if it is not relating to the matter dealt with by Section 90 of the ITA. I submit that the Respondents have not overlooked and not applied their mind to this Section. If they have they intend to ignore it in the hope even I am as ignorant. The Respondents must produce evidence to show that they asked for information relevant to the DTAA in question. No such evidence exists, none has been disclosed or even claimed to exist. If an Indian citizen opens an account in a Foreign Bank and does not or has not disclosed it and the amount is not negligible there is a presumption that it is tainted and product of some scheduled offence.  

The application shows non application of mind and overlooks the domestic Indian laws and regulations. In this connection Section 138 of the Income Tax Act 1961 permits and empowers furnishing of information, to the Enforcement Directorate dealing with foreign exchange or other officials in public interest.

Foreign Exchange Management Act (FEMA) Section 3 & 4 provide that without special permission of the Reserve Bank of India (RBI) or as provided in the Act or under circulars and rules etc. under the Act, foreign currency accounts are not permitted to be held by any person – resident in India. It is submitted that, the respondent UOI has merely to enquire and ascertain from the RBI whether the named Indians having accounts with HSBC-Geneva have acted in contravention of the law as set out above. It is a very simple exercise which the RBI can do and in case of doubt, call upon the concerned named Indian account holders to satisfy the RBI, whether he / she has the requisite permission or exemption to hold the foreign currency account in HSBC Geneva. The UOI appears to have deliberately failed to undertake this very simple exercise in an effort to conceal facts from the public. Serious cognizable offences are reasonably suspected and a strong case exists for arrest and custodial interrogation. Without these India will have to write off the stolen wealth promised to be repatriated.

It is submitted that the respondent UOI must explain to the public and answer whether this exercise has been undertaken because it will then establish the legitimacy or illegitimacy or illicitness of these account holders. There is no explanation as to why this simple exercise has not been undertaken. The Hon’ble Finance Minister has made a statement that;

“any premature and out of court disclosure of the names of account holders would not only vitiate the investigations but will enable such account holders to get away with their offences. It will also violate India’s Double Taxation Avoidance Agreements (DTAA) with other countries and will choke receipt of all further information from those countries.”

Copy of the Press note issued by the Hon’ble Finance Minister dated 18.10.2014 is annexed as Annexure P1/2 pg to.

This is plainly incorrect. On every FIR being filed the matter has to be reported to the Courts of Law under Section 157 of the Code of Criminal Procedure, 1973. Criminal justice and in fact, all justice is public justice except when express legal provision permits departure. The view expressed in the Press note is incorrect and disingenuous. First the DTAA between France (which has supplied information) and India has no application in view of the judgment dated 04.07.2011 as explained above. Secondly, the illicit account holders had sufficient time from 2011 to cover their tracks and there is no question of vitiating investigations, as claimed. In so far as Hassan Ali’s case is concerned that Respondent seem to be totally disinterested and not have vigorously perused. In any event, the United Nations Convention Against Corruption (UNCAC) expressly allows India to withdraw the concession. UNCAC is binding on India, France and Germany.

 

III

 

  1. Letters not disclosed by UOI

Letters dated 09.02.2011 (Annexure R-17 Vol III page 889-892) (from Germany) and the letter of Sanjay Kumar Mishra (from India) requesting Germany were not disclosed by UOI and suppressed, inspite of the order of this Hon’ble Court.

The UOI has made incorrect statements on affidavit and also incorrectly stated that UOI did not request Germany to furnish information under DTAA with Germany.

This is clearly apparent from a reading of a letter dated 06.06.2014 (Annexure R-10 page 217-219) as well as letter dated 09.02.2011 (Annexure R-17 Vol III page 889-892) both disclosed for the first time in the present application. The letter dated 06.06.2014 states “In my letter of 9 February 2011, I informed you that the disclosure of information you had requested on the basis of the legal arrangements concluded between our two states, in this case Double Taxation Agreement of 19 June 1995 and the Protocol to the Double Taxation Agreement, was not possible.”

Further the letter dated 9th February 2011 (R-17 page 889-892/ Volume III) (which has not been furnished by the former Solicitor General under his letter dated 27.05.2014 in breach of the orders of the Supreme Court, refers to another letter dated by Sri. Sanjay Kumar Mishra requesting information under DTAA with Germany.

It appears that either the correct letter from India to Germany dated 27.02.2008 has been suppressed or manipulated. It is possible that India may have orally communicated to Germany for supply of information under DTAA as the letter dated 27.02.2008, talks of Indian taxpayers and not Indians, which impliedly brings in DTAA.

It is submitted that three letters i.e. letters dated 06.06.2014, 09.02.2011 and the undisclosed letter of Sri. Sanjay Kumar Mishra belies the contention wrongly urged by UOI that India did not request for information from Germany under DTAA.

Without prejudice to the above contention the Indian Government instead of protesting that they had not requested information under DTAA acquiesced and repeatedly requested information under DTAA in subsequent correspondence inspite of the German Finance Ministry Spokesman’s offer that the information would be given to “any country” free of charge (which would include non DTAA countries).

 

  1. I rely on the statements made by the experts in this field. Professor R. Vaidyanathan, IIM Bangalore and M R Venkatesh, Chartered Accountant; both experts in this field in their interviews to TIMES NOW channel on 21/22.10.2014 relating issue of confidentiality raised by the Respondents.

 

 

 

PRAYER

Wherefore for the reasons stated herein above it is humbly prayed that this application be summarily dismissed.

Place: New Delhi

Date: 27.10.2014                                                                                                                                                            Deponent

Verification

I deponent above named do hereby state that this is my name and signature and what is stated in paragraphs 1 to 8 are true and correct to best of my information, knowledge and belief. No material fact has been concealed.

Verified at New Delhi on 27th Day of October 2014.

Deponent

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