Govt’s woes mount after apex court rap

Govt’s woes mount after apex court rap

New Delhi: Twin blows in the Supreme Court on Thursday compounded the political problems facing the Congress-led United Progressive Alliance.

First, it was censured by the apex court for shoddy investigation into black money stashed away in European banks. Then, its legal representative conceded that the committee that took the controversial decision to appoint P.J. Thomas as the central vigilance commissioner (CVC) did not have information about a case against him in Kerala—a claim that was immediately rubbished by one of the three members on the committee—Sushma Swaraj, leader of the opposition Bharatiya Janata Party (BJP). The other two members of the committee were Prime Minister Manmohan Singh and home minister P. Chidambaram.

An analyst described the government’s stand in the court as either the “height of incompetence or duplicity" and said it would provide fresh political ammunition to an already aggressive BJP.

The court also issued notices to six economic and public agencies of the government for failing to ratify a 2003 UN Convention on Corruption, which would have made acquiring information on white-collar crime from various countries possible. It would also have made it mandatory for India to release information to other countries.

Notices will be served on the Reserve Bank of India, the Securities and Exchange Board of India, the Central Board of Direct Taxes, the home ministry, the Enforcement Directorate and the Central Vigilance Commission, all of whom are to respond to the court within four weeks.

“That is a serious matter which we are concerned about. You know the names, (you know) where the money is lying, still you are talking about double taxation issue," a bench comprising justices B. Sudarshan Reddy and S.S. Nijjar said. “What action have you taken against them when you came to know that they have stashed money in foreign bank (LGT Bank in Liechtenstein Ltd)?"

The bench’s reference to the double taxation treaty is a reference to the government’s defence that it had received the information under an agreement that allows it to publicize the names of the account holders only when it prosecutes them and the income-tax department raises claims.

‘We didn’t know’

In the case involving Thomas, being heard by another bench, the government’s legal officer told the apex court that the committee was not officially told of the criminal case pending against him in Kerala.

“The fact that there was a pending case against him (Thomas) in Kerala was not before the committee," said attorney general Goolam E. Vahanvati in the court. Thomas has been accused of allowing import of palm oil (palmolein) at a price that caused losses to the Kerala government in 1992.

Swaraj had dissented at the time of the appointment, casting a cloud over it. According to the CVC Act, the committee should appoint the commissioner unanimously or through a consensus.

The bench headed by Chief Justice S.H. Kapadia sought more details on the appointment of Thomas as the government could not give clear reasons for choosing him over other officials in contention for the post.

Slamming the government, Swaraj termed as “untruth" its claim about the committee not knowing about the case, and said she would approach the Supreme Court in this regard.

“It is not at all true. In fact, it is a misstatement. I personally brought this fact to the notice of the Prime Minister and the home minister in the meeting itself even though they persisted with this appointment," Swaraj said.

The Centre for Public Interest Litigation, a legal activist group, and others had challenged the appointment of Thomas as the CVC, citing the palmolein corruption case.

Prashant Bhushan, the petitioner’s lawyer, argued that Thomas is being investigated in the case involving the allocation of second-generation spectrum to some telcos (he was telecom secretary at the time) and that it would be impossible for him to oversee the Central Bureau of Investigation, which is probing the case. He further argued that the commissioner would not have a moral basis to investigate other public officials since he himself was chargesheeted in the palmolien case.

Balvir Arora, former head of the political science department at Jawaharlal Nehru University, said the government’s stand on the issue was “incredible". “It has to be really incompetent to be unaware of something like that. The leader of the opposition had argued precisely the same point. It is either the height of incompetence or height of duplicity."

The BJP seized on the opportunity to focus its political attack on the Prime Minister. “The entire cloud surrounding the appointment of the CVC leads straight to the door of the Prime Minister... The PM is presiding over an empire of scandal and corruption... We feel that because of the suspicious circumstances related to the appointment of the CVC, Manmohan Singh deliberately wanted a pliant officer as the CVC," Ravi Shankar Prasad, BJP spokesperson, said. He added that the Prime Minister was functioning in a “negligent, callous and deliberately indifferent manner".

The Congress maintained that the opposition was raising “wild and absurd allegations" against the Prime Minister. “The issue is between the Supreme Court and the government. If the court has sought some information, we hope that the law officials will be giving it," party spokesperson Shakeel Ahmad told reporters.

Arora said that the government lacks “direction and leadership. Signs are evident that there are pulls from various sources and there is a sense of drifting, resulting in so many gaps and ill-advises".

In the black money case, the court put the government on the spot with a hard line of questioning on what it had done to find the sources of the black money and why it was limiting the scope of the case to tax evasion.

“We and you are aware of some names. Have you set the law in motion to verify the source of black money? They (the account holders) are Indian citizens and are amenable to Indian law. Apart from the tax (evasion) angle, what are the inquiries you are making?" the court asked solicitor general Gopal Subramanium.