Ram Jethmalani v. Union of India

FACTS

• The Union of India had been struggling to conduct a proper investigation into the affairs of Hassan Ali Khan and the Tapurias, raising concerns about high-level political interference and hindrance to investigations linked to banks like UBS Zurich.

• The investigation had just begun, and the existing machinery (including the High Level Commission—HLC) was deemed insufficient to investigate the vast amounts of unaccounted monies stashed away in foreign banks with strong privacy laws.

• Large amounts of unaccounted monies, suggesting unlawful activities, may be transferred out of the country to evade tax payments, depleting the nation's capacity to undertake tasks in public interest.

• The petitioners argued that the failure to "follow the money" was a failure of the State to fulfill its constitutional obligations.

ISSUES

The Court's worries and questions centered on:

1. Whether the State's constitutional imperative in the economic, social, and political contexts is substantially effectuated by the State "following the money."

2. Whether the accumulation of large, unaccounted monies in foreign banks (like Liechtenstein) is damaging due to:

   • The concentration of economic power.

   • The risk of these monies being transferred to groups for unlawful activities that are extremely dangerous to the nation, including actions against the State.

3. Whether system-wide incapacities—institutional, ethical, or skill-based—in accounting for monies run afoul of constitutional imperatives.

JUDGEMENT

The apex court held that:

• The Union of India is required to disclose all documents and information obtained from Germany regarding the matters discussed above, subject to certain conditions.

• The Union is exempt from revealing the names of individuals with accounts in Liechtenstein banks where investigations are still in progress and no evidence of wrongdoing is yet available.

• The names of individuals with bank accounts in Liechtenstein with investigations completed and show cause notices issued and proceedings initiated may be disclosed.

• A Special Investigation Team (SIT), constituted pursuant to court orders, has taken over the investigation of these individuals and must conduct it expeditiously.

• The Ministry of Finance, Union of India, will be responsible for creating the necessary infrastructure for the Special Investigation Team's effective functioning.

• Former judges appointed to supervise the SIT are entitled to the same remuneration, allowances, perks, and facilities as Supreme Court judges.

OBSERVATION

• Right to Privacy: The revelation of details of bank accounts of individuals, without the establishment of prima facie grounds to accuse them of wrongdoing, would be a violation of their rights to privacy. The mere fact that a citizen has a bank account in a bank located in a particular jurisdiction cannot be a ground for the revelation of details of his or her account that the State has acquired.

• Constitutional Failure: The failure is not of the Constitutional values or of the powers available to the State; the failure has been of human agency. The balancing leads only to one conclusion: strengthening of the machinery of investigations, and vigil by the broader citizenry.

• Need for a Coordinated Body: The Court was of the firm opinion that fragmentation of government, and expertise and knowledge, across many departments and agencies, is a serious impediment. It is necessary to create a body that coordinates, directs, and where necessary orders timely and urgent action by various institutions of the State. The continued involvement of this Court in these matters, in a broad oversight capacity, is necessary for upholding the rule of law.

COMMENTARIES

• The Apex Court reiterated that the right to privacy is an integral part of the right to life. Thus, there are a series of decisions of the Apex Court which are delivered after considering the decisions of the Constitution Benches in the cases of Kharak Singh and M.P. Sharma consistently taking a view that the right to privacy is an integral part of the right to personal liberty under Article 21 Constitution of India.

• The Court observed that in several instances in the past, when the issues were of a complex nature, yet requiring the intervention of the Court, SITs were ordered to be constituted to enable the Court, the Union government and other organs of the state to fulfill their constitutional obligations.