Indian money stashed abroad a national plunder: Apex court


New Delhi: The Supreme court Wednesday said the stashing away of ill-gotten money outside the country in foreign banks was a “national plunder” and asked the government to give it all the information it had on Indians who had siphoned off their illicit money to tax havens.

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Describing as “mind boggling” the amount of money that had been stashed away from the country, the apex court bench of Justice B. Sudershan Reddy and Justice S.S. Nijjar said that “it (stashing away of the ill-gotten money) is a plunder of national wealth”.

When the court was told that the amount involved was more than $1 trillion, Justice Nijjar wanted to know how many zeros were there in a trillion.

The court’s observations came on a petition by Ram Jethmalani seeking directions to the government to disclose the amount of money that had been stashed away by Indian nationals in foreign banks and the steps taken to bring back that money.

The court pulled up the central government for limiting the scope of the petition to just the money parked in LGT Bank in Liechtenstein in Europe.

The court’s query came when Solicitor General Gopal Subramanium gave the court names of 26 people who hold accounts in LGT Bank in Liechtenstein. The names were given in a sealed cover.

“Why are you limiting the scope of this petition to (money deposited in) LGT Bank in Liechtenstein. Under the PIL (public interest litigation) are we precluded from asking question and expanding the scope of the petition,” the court asked the solicitor general.

The court made its dissatisfaction apparent with the disclosure made by the central government when asked if that was “all the information that you (government) have about the money deposited by the Indians holding accounts abroad”.

The solicitor general insisted that the scope of the petition was limited to deposits by Indian nationals in LGT Bank.

He said that if the court wished, then general information on the money that has landed in overseas banks could also be made available to the court.

Subramanium told the court that the names of 26 people holding accounts in LGT Bank in Liechtenstein could not be made public on account of Double Taxation Avoidance Agreement (DTAA) with Germany and the provisions of the income tax laws.

The court was told that the DTAA was not just tax avoidance agreement but also an instrument of getting information on stashed away money.

“You are going round and round about the DTAA. We are concerned with pure and simple theft of the national money… Theft of a mind boggling amount. We are not concerned with the DTAA,” the court said.

Appearing for Ram Jethmalani, senior counsel Anil Diwan said the petition was in public interest and the DTAA did not apply in the instant case as the transactions were by Indians alone and not between Indian and German nationals.

He said the government could invoke the confidentiality clause to hold back the information on the ground that under the IT provisions it concerned a third party.

He said that under the constitution and the Right To Information, disclosure of information was a matter of rule and holding it back was an exception.

Referring to the case of Hasan Ali Khan, a 56-year-old stud farm owner, Diwan said that by government’s assessments he was holding $8 billion in foreign banks.

Diwan asked how could the income tax proceedings relating to him (Hasan Ali) attract the confidentiality provisions of the tax law.

The matter will come up for hearing Jan 27 when the solicitor general will advance his arguments.