‘Follow the money’



From the order of the same two judges, July 4, appointing a Special Investigation Team to probe the stashing of money in foreign banks

Money trail

“Follow the money” was the short and simple advice given by the secret informant within the American government to Bob Woodward, journalist with The Washington Post, in aid of his investigations of the Watergate break-in. As a medium of exchange, money is vital. However, increasing monetisation of most social transactions has been viewed as potentially problematic for the social order… The scrutiny and control of activities by the state in the public interest, as posited by modern constitutionalism, is substantially effected by the state “following the money.” In modern societies very little gets accomplished without transfer of money.


Large amounts of unaccounted monies, stashed away in banks located in jurisdictions that thrive on strong privacy laws protecting bearers of those accounts (from) scrutiny, raise worries. First and foremost, such large monies, stashed abroad and unaccounted, would suggest the necessity of suspecting that they have been generated in activities deemed unlawful. In addition, it would also lead to a natural suspicion that they have been transferred out of the country in order to evade payment of taxes, thereby depleting the capacity of the nation to undertake many tasks that are in public interest.

 Soft state

The quantum of such monies may be rough indicators of the weakness of the state, in terms of crime prevention and tax collection. The softer the state, the greater the likelihood that there is a nexus between the lawmaker, the lawkeeper, and the lawbreaker.

With globalisation, nation states are also confronted by the dark worlds of international arms dealers, drug peddlers, and various kinds of criminal networks, including networks of terror. They work in the interstices of the microstructures of financial transfers across the globe, and thrive in the lacunae, the gaps in law and of effort.

Increasingly, on account of a “greed is good” culture promoted by neoliberal ideologues, many countries face the situation where the model of capitalism that the state is compelled to institute, and the markets it spawns, are predatory in nature. The paradigm of governance that has emerged over the past three decades prioritises the market over any degree of control of it by the state. The role for the state is visualised by votaries of the neoliberal paradigm as that of a night-watchman…

 Slow probe

The amount of unaccounted monies, as alleged by the Government of India itself, is massive. The showcause notices were issued a substantial length of time ago. The named individuals were very much present in the country. Yet, for unknown, and possibly unknowable though easily surmisable, reasons, investigations proceeded at a laggardly pace. Even the named individuals had not yet been questioned with any seriousness.

The real point of controversy is as to whether there is a need to constitute a Special Investigation Team to be headed by a judge or two of this court to supervise the investigation. It was submitted to us that the Union of India has recently formed a High Level Committee under the aegis of the Department of Revenue in the Ministry of Finance… While it would appear, from the status reports submitted to this court, that the Enforcement Directorate has moved in some small measure, the actual facts are not comforting… In fact we are not convinced that the situation has changed to the extent that it ought to so as to accept that the investigation would now be conducted with the degree of seriousness that is warranted.

The fact remains that the Union of India has struggled in conducting a proper investigation into the affairs of Hassan Ali Khan and the Tapurias. While some individuals have been interrogated, many more are yet to be investigated. The formation of the HLC was a necessary step, and may even be characterised as a welcome step. Nevertheless, it is an insufficient step.

 We order:

(i) That the High Level Committee constituted by the Union of India be appointed with immediate effect as a Special Investigation Team;

(ii) That the SIT also include director, R&AW;

(iii) That it be headed by and include the following former judges of this court: Justice B P Jeevan Reddy as chairman and Justice M B Shah as vice-chairman…


Apparently, a former employee of a bank or banks in Liechtenstein secured the names of some 1,400 account holders, along with the particulars, and offered the information to various entities. The same was secured by Germany, which in turn offered the information regarding nationals and citizens of other countries to such countries. It is the contention of the petitioners that even though the Union of India was informed about the presence of the names of a large number of Indian citizens, it never made a serious attempt to secure such information and proceed to investigate such individuals.

We need to examine the claims of the Union of India as to whether it is proscribed by the double taxation agreement with Germany from disclosing such information. Further, we would also have to examine whether the Union of India can claim exemption from providing such information to the petitioners… We have perused the agreement with Germany. We are convinced that the agreement, by itself, does not proscribe the disclosure of the relevant documents and details…

The state has the duty, generally, to reveal all the facts and information in its possession to the court, and also provide the same to the petitioners.

One major constitutional issue and concern remains. The revelation of details of bank acounts of individuals, without establishment of prima facie grounds to accuse them of wrongdoing, would be a violation of their rights to privacy. Only after the state has been able to arrive at a prima facie conclusion of wrongdoing, would the rights of others in the nation to be informed enter the picture.

 We order that:

(i) The Union of India disclose to the petitioners all documents and information they have secured from Germany, in connection with the matters discussed above, subject to the conditions in (ii) below;

(ii) That the Union of India is exempted from revealing the names of those individuals… in respect of whom investigations are still in progress and no information or evidence of wrongdoing is yet available…

(iii) That the names of those individuals, in respect of whom investigations have been concluded and proceedings initiated, may be disclosed;

(iv) That the SIT constituted by this court shall take over the matter.



‘The horror! The horror!’



Twice this week, the Supreme Court made references to neoliberalism and drew parallels between its cases and instances from literature and history. Excerpts:


The state of Chhattisgarh claims that it has a constitutional sanction to perpetrate, indefinitely, a regime of gross violation of human rights in a manner, and by adopting the same modes, as done by Maoist/Naxalite extremists. It also claims that it has the powers to arm, with guns, thousands of mostly illiterate or barely literate young men, who are appointed as temporary police officers, with little or no training, and even lesser clarity about the chain of command to control the activities of such a force…

Heart of Darkness

As we heard the instant matters before us, we could not but help be reminded of the novella Heart of Darkness by Joseph Conrad, who perceived darkness at three levels: (i) the darkness of the forest, representing a struggle for life and the sublime; (ii) the darkness of colonial expansion for resources; and finally (iii) the darkness, represented by inhumanity and evil, to which individual human beings are capable of descending, when supreme and unaccounted force is vested, rationalised by a warped world view…

Conrad describes the grisly and the macabre states of mind and justifications advanced by men, who secure and wield force without reason, sans humanity, and any sense of balance. The main perpetrator, Kurtz, breathes his last with the words: “The horror! The horror!”

Through the course of these proceedings, as a hazy picture of events and circumstances in some districts of Chhattisgarh emerged, we could not but arrive at the conclusion that the respondents were seeking to put us on a course of constitutional actions whereby we would also have to exclaim, at the end of it all: “The horror, the horror.”


The problem cannot be the people of Chattisgarh, whose human rights are widely acknowledged to being violated by the Maoists/Naxalites on one side, and the state and some of its agents on the other. The problem rests in the amoral political economy that the state endorses, and the resultant revolutionary politics that it necessarily spawns.

The culture of unrestrained selfishness and greed spawned by modern neoliberal economic ideology, and the false promises of ever increasing spirals of consumption leading to economic growth that will lift everyone, under-gird this socially, politically and economically unsustainable set of circumstances in vast tracts of India, and Chattisgarh in particular. The justification often advanced by advocates of the neoliberal development paradigm… in India is that unless development occurs, via rapid and vst exploitation of natural resources, the country would not be able to either compete on the global scale, nor accumulate the wealth necessary to tackle endemic problems of poverty, illiteracy, hunger and squalor.


On the one hand the state subsidises the private sector, giving it tax break after tax break, while simultaneously citing lack of revenues as the primary reason for not fulfilling its obligations to the poor through social welfare measures. On the other hand, the state seeks to arm the youngsters amongst the poor with guns to combat the anger and unrest. Tax breaks for the rich, and guns for the youngsters amongst poor, so that they keep fighting amongst themselves, seems to be the new mantra…

Our constitution is most certainly not a “pact for national suicide.” In the least, its vision does enable us to recognise, and prevent, the emergence and the institutionalisation of a policing paradigm, the end point of which can only mean that the entire nation, in short order, might have to gasp: “The horror! The horror!”

 Cannon fodder

It is clear to us that the lives of thousands of tribal youth appointed as SPOs are placed in grave danger by virtue of the fact that they are employed in counterinsurgency activities against the Maoists/Naxalites in Chhattisgarh. It is equally clear that in this policy, jointly devised by the Union and the states facing Maoist insurgency, as implemented in Chhattisgarh, the young tribals have literally become cannon fodder in the killing fields of Dantewada and other districts. The training that the state of Chhattisgarh claims it is providing those youngsters… is clearly insufficient.


Many of these tribal youngsters, on account of the violence perpetrated against them, or their kith and kin and others in the society in which they live, have already been dehumanised. To have feelings of deep rage, and hatred, and to suffer from the same is a continuation of the condition of dehumanisation.

It is clear that one of the primary motives in employing tribal youth as SPOs is to make up for the lack of adequate formal security forces. The situation has been created in large part by the socioeconomic policies followed by the state. The policy of privatisation has also meant that the state has incapacitated itself from devoting adequate financial resources in building the capacity to control the social unrest…

It is clear to us that these tribal youngsters are being given firearms on the ground that SPOs are treated “legally” as full-fledged members of the police force, and are expected to perform the duties, bear the liabilities, and be subject to the same disciplinary code… Yet, the Union of India and the state believe that all that they need to be paid is an “honorarium”.


Article 14 is violated because subjecting such youngsters to the same levels of dangers as members of the regular force, who have better educational backgrounds, receive better training, and possess a better capacity to benefit from training that is appropriate for the duties in counterinsurgency activities, would be to treat unequal as equals.

Article 21 is violated because youngsters with such low qualifications cannot be expected to understand the dangers they are likely to face, the skills to face such dangers, and the requirements of the necessary judgment while discharging such responsibilities.

 We order that:

(i) The state of Chhattisgarh desist from using SPOs (against) Maoist/Naxalite activities;

(ii) The Union of India desist from using its funds in supporting recruitment of SPOs for counterinsurgency activities against Maoists/Naxalites groups;

(iii) The state make every effort to recall all firearms issued to SPOs;

(iv) The state make arrangements to protect those employed as SPOs previously;

(v) The state take measures to prevent the operation of any (such) group.