Apex court ticks off government on black money issue


New Delhi: The Supreme Court Monday censured the union government for its failure to prosecute Pune businessman Hasan Ali Khan under the Money Laundering Act for stashing a huge sum of black money in UBS bank in Switzerland.

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A bench of Chief Justice K.G. Balakrishnan censured the government while hearing a lawsuit for retrieving Indian black money worth an estimated Rs.70 trillion stashed abroad by various individuals.

“Why the action is not being taken under the money laundering act?” asked the bench, which also included Justice P. Sathasivam and Justice M.K. Sharma, from the government.

The bench posed the inconvenient query to the government as senior counsel Anil B. Divan, appearing for former law minister Ram Jethmalani and other petitioners, said that the government’s affidavit, filed Saturday, discloses that Khan and his wife were not being prosecuted under Money Laundering Act despite the same being most natural course of action.

The government had asserted Saturday that it was not sitting idle on the issue of retrieving black money of Pune resident Hasan Ali Khan and his accomplice Kashinath Tapuria from the Swiss bank.

The affidavit had said that the government has already approached Swiss authorities for information on Khan’s account, but they, despite having acceded to the international community’s plea for greater transparency in their banking operations, are yet to implement it through proper changes in their internal laws.

Owing to this, India has failed to secure any significant information about Khan’s accounts despite the fact that Indian tax authorities have already established that Khan and his wife Rheema Khan have accounts in the Swiss bank.

The government had said that on the basis of evidence gathered by it during its probe into Khan’s black money, it has raised demand of tax worth over Rs.718 billion against Khan, his wife and their accomplices.

But Divan Monday contended that Khan’s “is a clear case, which can be brought under the Money Laundering Act. And the Swiss authorities would be compelled to disclose information if criminal cases were initiated against him apart from tax evasion”.

Disclosing to the court that Khan and his wife also face action for having fake passports in India, Divan asked the court as to why the government was loath in extracting information from the Swiss authorities on the grounds that the Khans also face criminal cases in India.

Pointing out several other commission and omission of acts on the part of the government in retrieving Indian black money, Divan said: “Is it not unreasonable to infer that the government is interested in protecting powerful individuals, who may be using Khan and his wife as their nominee.”

“The most important factor is that not even a single individual has been apprehended/interrogated by the government in the last five years in relation to money laundering and slush funds from illicit funds, parked abroad,” he added.

During his argument, Divan also strongly refuted the government’s contention that the lawsuit was politically motivated saying that one of the counsel who is to argue in favour of the lawsuit is Fali S. Nariman, a former Rajya Sabha member nominated by the Congress-led United Progressive Alliance government.

The court asked government officer to file his reply to the petitioners’ additional written submission on the issue.

The court also asked the petitioner to file their reply to the government affidavit on their lawsuit.

Without formally issuing notice to the government on the lawsuit, the court adjourned it for further hearing on July 28.