On Tuesday, the Supreme Court of India directed the Union government to hand over to it, in a sealed cover, the names of all the Indian citizens who had – according to lists obtained by the government – unaccounted money in accounts abroad. In the court’s stated opinion, it needed to monitor the investigation more closely, otherwise “nothing would happen”. This is in spite of the fact that the government’s very first Cabinet meeting set up a special investigation team, or SIT, to investigate the black money allegations and the names on the two lists with the government have already been made available to the SIT, according to the government’s law officers.
The government, understandably, views the names as being sensitive – not necessarily because of the names themselves, but because dissemination could be seen as breaching secrecy clauses in double-taxation avoidance agreements, or DTAAs. The Supreme Court, however, took a different view, saying that the government is “not going to protect anybody … why this protective umbrella?” The court’s concern about the administration’s behaviour is understandable on one level. The government does appear to be playing politics with the investigation, with a few of its members saying that the names would embarrass the opposition Congress. However, surely there are other ways to reprove the government that do not give the widespread impression – whether right or wrong – that Indian institutions will play fast and loose with international treaty obligations.
It is unfortunate that the Supreme Court has, in its justifiable zeal to ensure the prosecution of all those responsible, allowed observers to conclude that it may be willing to undermine India’s sovereign obligations. The court has indeed said that it will “take care of the problem of confidentiality”. However, that has reassured few. After all, the government’s argument is persuasive – that a careful approach is needed in order to ensure the success of India’s ongoing efforts to secure more such tax-loophole-closing treaties. Yet the court has not seen much merit to this claim. It has pointed out that “such treaties are drafted by diplomats, and not lawyers, leading to sloppiness in drafting” and said, in addition, that the Union government’s argument that the DTAA with Germany enjoins confidentiality on India, would violate the basic structure of the Constitution.
Nobody would suggest that an active Supreme Court pushing along a notoriously dilatory investigation is a bad thing. However, India’s reputation as a responsible country and member of the international community is also important. It requires a public and oft-stated commitment to upholding the letter and spirit of international treaties. Even the Bharatiya Janata Party, which while campaigning earlier this year did not recognise the constraints of such treaties, rightly acknowledged their force once in office. The court will hopefully seize the opportunity, now that the government has been forced to hand over the names in a sealed cover, to point out how it too is a careful custodian of the Indian state’s international pledges. The confidentiality of these names is important, until supporting evidence is found and legal proceedings begin. Many will be hopeful that the court will act swiftly to dispel the impression that India may play fast and loose with a confidentiality clause it has promised to uphold.