'India is doing nothing to get back black money abroad!'

Distinguished lawyer Anil Divan who is arguing the case related to black money stashed overseas discusses the legal details of the case and is optimistic that the illicit wealth can be brought back to India.

Finance Minister Pranab Mukherjee on Tuesday batted for the UPA government in the sensitive issue of black money stashed abroad by Indians. He was asked to do so by Prime Minister Manmohan Singh because it is such an important case.

In the chaotic world of news from New Delhi, people must not lose focus of this public interest litigation being heard by the Supreme Court.

The case was filed by noted lawyer and former Union minister Ram Jethmalani, former secretary general of Lok Sabha Subhash Kahsyap, former top cops K P S Gill and Julio F Ribeiro, and others, to force the Manmohan Singh-led government to bring back the illicit wealth -- estimated at a whopping $1.5 trillion -- stashed abroad.

The amount is nearly one-and-a-half-times India's gross domestic product. A window has been opened by the German government, giving India the opportunity to start what could be an excruciatingly-long legal process required in getting such sensitive information from secretive banks in tax havens.

The case is being argued by distinguished lawyer Anil Divan on behalf of these litigants.

Ram Jethmalani has sought directions to the Union government to act upon a report that Germany was willing to share details of Indians having accounts in banks based in Liechtenstein.

Germany obtained the names of illegal money depositors /account holders by bribing an official of a Liechtenstein bank.

. . . 

This is an unprecedented case, and Justice B. Sudarshan Reddy and Justice S S Nijjar, the Supreme Court judges who are hearing the matter, have already acknowledged this by saying that it is a mind-boggling case.

"It is not a case of tax. The issue involved is of serious nature. Keep aside all the things. Let us consider the persons named," the judges said.

The case has certainly moved a bit. At the last hearing, the government confessed that there were 12 trusts owned by 26 tax assesses (including Non-Resident Indians), that hold accounts in the Swiss and German banks in Liechtenstein.

Jethmalani firmly believes that the government has adopted the wrong procedure to apply -- for the names of the illegal Indian account holders -- to the German government, knowing very well that the application through the current route would be rejected.

This is a very serious charge and is currently under scrutiny.

Anil Divan, meanwhile, is assiduously trying to force the government to move so as to get back the money that rightfully belongs to the Indian people.

While talking exclusively to rediff.com, before Finance Minister Pranab Mukherjee's press conference on Tuesday, Divan discussed the legal details of the case and also showed optimism in fighting a case that crucial to national interest.

In his press conference, Mukherjee tried to convince the country that the government is not hiding anything, but a close reading of Divan's argument and Mukherjee's defence shows that the finance minister was less than successful in giving satisfying answers to some crucial questions.

Through proper legal means, the Indian people's money must come back to India, Divan argues. He charged that the government is applying for information under the wrong route and the resultant wrong response that will get will only further delay taking any real action against the culprits.

An anguished Divan says that those who are pessimistic about India getting back the huge amounts of black money hoarded abroad have no right to live in India as they do not have faith in democracy.

Excerpts from the interview with Anil Divan:

. . . 

What's your plea to the Supreme Court in this case of illegal money stashed aboard?

The case is about trailing and bringing back enormous amount of money lying stashed abroad in various tax havens like Liechtenstein banks, Swiss banks, Mauritius, Dubai, Cayman Islands, Jersey Islands, etc. They are all tax havens.

The fact that large amounts of money is abroad has been substantiated by the Global Integrity Report. Professor R Vidyanathan (of IIM Bangalore) has written about it and we have taken that into consideration.

Some say it is billions of dollars and some says it is trillion of dollars (that has been stashed away in tax havens) but there is no doubt that there is a large amount of Indian money there. We should again substantiate it by what Prime Minister Manmohan Singh said: He said that one of our priorities will be to bring back this money back in first hundred days (after the UPA came back to power and formed a government after the general elections in 2009).

. . . 

Yes, he said it during 2009 election time. . .

Right, that everybody knows. Two things are undisputed. A large amount of money is stashed abroad and we should do everything to bring it back. The purpose of the petition is that government is not taking proper action and the Supreme Court should direct the government to bring the money back.

We have given three broad instances. What the United States government did. . . the American government came down heavily on UBS, which is the premier bank of Switzerland, also operating in America.

The US-based UBS International Inc entered into a deferred agreement with the Department of Justice. They were willing to pay $780 million. We have got the information from the web site.

. . . 

How did they manage it?

The US Department of Justice alleged that UBS was conspiring to defraud the US by impeding the internal revenue services using various measures. They were trying to get US citizens to part with their money to deposit it in the Swiss bank and defraud the Internal Revenue Service of the US.

Let me quote what John A DiCicco, acting Assistant Attorney General of Justice Department's tax division has to say. He said, "Today's agreement is but one milestone in an ongoing law enforcement effort to reassure hardworking and law-abiding taxpayers who pay their fair share of taxes and that those who don't pay will pay a heavy price. The veil of secrecy has been pulled aside and we will continue to aggressively pursue those who shirk their federal tax obligations or assist others in doing so."

Superb! Does India also have a case on the same lines?

That's what I am saying. India is doing nothing!

Can India also get it like the US did, since our laws differ?

But tax evasion is tax evasion. If some officers of the bank are assisting Indian citizens, then, of course, you can do it.

. . . 

What are other two instances of the three that you talked about?

In February 2008, the German authorities accessed information from an employee of a Liechtenstein bank. They bought information of various secret accounts lying in the Liechtenstein bank.

We should understand that Liechtenstein is not a part of Germany. It is an independent principality. If it was a part of Germany, it would have straightaway accessed those accounts. So Germany had to get it.

By bribing the officer .

Yeah. Secondly, having got these accountholders' names, Germany announced that they are ready to give this information, free of charge, to any other states. They were not interested in any other citizens. They were interested in Germans only. We should have got this information.

Why could not we get it?

You should ask the government. That exactly is our petition. Why didn't the government ask for it?

. . . 

Solicitor General Gopal Subramanium had argued that "  since German authorities had not responded to India's request for sharing LGT Bank data, India was forced to take recourse to Double Taxation Avoidance Agreement."

I don't think this (Subramanium's argument before the court) is correct!

Why?

Because they are not disclosing the letters.

The original letter written to the German government requesting information?

Yes. They are not disclosing the letters. The correspondence with the German government is two-fold. One is where they gave the names. But, before they gave names -- for one-and-a-half years they were corresponding with Germans. What is so secret about it?

Second, they are invoking the DTAA. That DTAA means that German citizens, on the one side, and Indian citizens, on the other, should not be taxed in both countries. If they are taxed in both countries they would get relief.

In this case of illegal Indian account holders there are no German citizens' names we are asking for. The question is only related to Indian citizens having accounts in the Liechtenstein bank. It has nothing to do with German citizens, nor does it have anything to do with double taxation.

So where is the question of applying under DTAA? As a Times of India report says, 'Government is using Germany as a smokescreen'. That's true.

. . . 

The third instance we have talked about is related to (Pune-based real estate consultant) Hassan Ali Khan. The government itself has issued a showcause notice saying that Khan has billions of dollars in Swiss bank and Singapore bank accounts, et cetera. The government's own allegation is that he has dealings with (Saudi Arabian arms dealer) Adnan Khashoggi.

He (Khan) has got money from him (Khashoggi), this is the government's allegation. Yet no criminal case against him, no money laundering case against him, is moving. No information is available on him.

In fact, it was reported that he had a forged passport. He should have been immediately prosecuted. The forgery is equally an offence in Switzerland so there would be dual criminality.

They could have proceeded on all these accounts, but the government has not done so.

Our complaint is that the Government of India has a lot of options. But it is not exercising these for its own reasons. Of course, Indian citizens should know why they are not exercising all the options.

Let me play the Devil's advocate here. The government is saying that it is doing enough. It has international law to follow. It is going slowly because they want more names to come out. If the names given by Liechtenstein bank are revealed, whatever government has got it so far, India would not look a responsible party. The government is saying it's abiding by the confidentiality clause.

I think this has no relevance at all. What is the relevance of the Liechtenstein bank when German government has offered names to us? The German government has got the names and have prosecuted its citizens. Has the German government lost its credibility?

. . . 

What's the government's stand in the court?

The government's case is that because of DTAA they are not doing it.

As far as Swiss banks are concerned, the government is saying that the Swiss laws don't permit (disclosure of information on bank account holders).

The government's stand is all opaque; it is confusing. The whole idea is to confuse everybody and just go on talking. That's all.

Will this case reach its logical conclusion? How seriously do you think about it?

We filed such public interest litigations to make the public aware. It is common knowledge how this government is functioning. We have got the 2G spectrum scam, we have seen the CWG-related cases

We are trying to build public opinion. The public should be aware what people in power are not doing. I am not concerned with this or that political party. I am only concerned about law.

The law should be enforced and the lawbreaker should be bought to book. And our money... if it comes back, all our social schemes and social actions will benefit tremendously. If a trillion dollars worth of wealth comes back, you can do lots of thing for the poor and the deprived.

. . . 

Isn't this Utopia...?

(Angrily) It is not Utopia. It's not at all Utopia. It will come back. Look at what has happened in Bihar. People said it's a dead case. It has revived. What happened there can happen here, too.

If you think like this that means you are losing faith in democracy. In a democracy, you must fight for your rights.

In your case, already, 30 names have come. . .

We don't know the numbers. We don't know if the government is telling the truth.

On the records of the court, no numbers are mentioned.

. . . 

You know how money gets out of India and how it's deposited abroad. There are too many veils. People can be pessimistic because these names will be some obscure names. How will, then, the trail lead to actual accused?

You think names are going to come and something will happen. I am concerned with the issue that law must be enforced. Strictly.

In the Jain hawala case that I fought not much happened. But we don't lose heart in a democracy. We have to continue fighting.

People in power must do something or create pressure on them to act. If you think this effort is Utopian, then we should go and live in dictatorial country... why live in a democracy? I don't subscribe to defeatism.

Why don't you think that the money may come? Things may improve. Even if you catch two or three big names, we should act.

. . . 

But the same CBI will be investigating it if and when the names arrive.

We have to fight. I have fought against the CBI (Central Bureau of Investigation) so much. You have to love democracy. No need to be a cynic. If nothing is going to happen, then go to Sai Baba temple. Why are you here?

See you have raised the CBI question. I have been fighting all these years that CBI should be made an autonomous body, like the judiciary, the CEC, the CAG and the CVC.

Of course, the CBI is going to do nothing. It should be independent. We are fighting for it since the last 20 years. Maybe we will get independent and autonomous status for CBI after you and I are dead. We may get it after 50 years, but we will get it!

I am saying

You are saying that nothing is going to happen. But I will keep on fighting.

. . . 

How do you see this case going?

We are going to fight to see that something is done. We want to establish the principle. Why do you (the government) say this is the tax-related case? That's the issue. Why could it not be corruption money? Why it could not be narcotic-related money or terrorism-funding or any other thing? Why should the government assume that it's a tax issue?

Who told them to do it so (to apply under DTAA)? That shows (their intention). They went under DTAA, which was not applicable in the case at all, with a view to maintaining confidentiality!

If they (the government) have done a wrong thing they should come out openly and say we have done a wrong thing. We are pointing out how it is wrong. They claim our prestige will go. What is your prestige today? Australians say they haven't been paid (in the Commonwealth Games-related issue). What is your prestige? You have no prestige!

If you go outside India we hear about scams and scamsters. The government is doing nothing! My individual reputation as an Indian is affected all over the world.

How can India get this money back? What are your suggestions?

I don't know. You give me the power, I will get the names. But that's not the point.

The point is they don't want to do it. You go and ask them and don't ask me. Go and ask solicitor general (Gopal Subramanium). You are asking the wrong questions to the wrong person on the wrong assumptions.