Black money case : Supreme Court bench divided on Centre’s plea against SIT 

Ram Jethmalani & Ors. Vs Union of India & Ors.


Hon’ble Mr. Justice Altamas Kabir:

Writ Petition (Civil) No.176 of 2009 was filed by Shri Ram Jethmalani and five others against the Union of India, the Reserve Bank of India, the Securities Exchange Board of India, the Director, Directorate of Enforcement and the Chairman, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, against the purported inaction of the Government to arrange for recovery of large sums of money deposited by Indian citizens in foreign banks and, in particular, in Swiss Banks.


On 4th July, 2011, on I.A. No.1 of 2009 in the Writ Petition several directions were given. The said order was divided into three parts. The first part of the order dealt with the alleged failure of the Central Government to recover the large sums of money kept in such foreign banks and in tax havens having strong secrecy laws with regard to deposits made by individuals. The second part dealt with the unlawful activities allegedly funded out of such deposits and accounts which were a threat to the security and integrity of India. The amounts deposited in such tax havens in respect of one Shri Hassan Ali Khan and Shri Kashinath Tapuria and his wife Chandrika Tapuria were alleged to be in billions of dollars in UBS Bank in Zurich alone. Income Tax demands were made to Shri Hassan Ali Khan for Rs.40,000 crores and a similar demand was served on the Tapurias amounting to Rs.20,580 crores. On being convinced that, in the absence of any known source of income, the large sums of money involved in the various transactions by Hassan Ali Khan and the Tapurias were the proceeds of crime, which required a thorough investigation, the Supreme Court felt the necessity of appointing a Special Investigation Team to act on behalf and at the behest of the directions of this Court. It was noted by the Supreme Court that the issues involved were complex and would require expertise and knowledge of different departments and the coordination of efforts between various agencies and departments. It was also recorded that on behalf of the Union of India, it had been submitted that a High Level Committee had recently been formed under the initiative of the Department of Revenue in the Ministry of Finance with powers to co-pt, as necessary, representatives not below the rank of Joint Secretary such as the Home Secretary, Foreign Secretary, Defence Secretary and the Secretary, Cabinet Secretariat. It was further recorded that the Union of India had claimed that such a multi- disciplinary group and committee would enable the conducting of an efficient and a systematic investigation into the matters concerning allegations against Hassan Ali Khan and the Tapurias and would also be able to take appropriate steps to bring back the monies deposited in foreign banks. In the light of such submission made on behalf of Union of India and citing the judgments of the Supreme Court in (1) Vineet Narain Vs. Union of India [(1996) 2 SCC 199],(2) NHRC Vs. State of Gujarat [(2004) 8 SCC 610], (3) Sanjiv Kumar Vs. State of Haryana [(2005) 5 SCC 517] and (4) Centre for PIL Vs. Union of India [(2011) 1 SCC 560], the Supreme Court completed the second part of the order by directing among others that the High Level Committee constituted by the Union of India be forthwith appointed with immediate effect as a Special Investigation Team;  the SIT to be headed by and include the following former eminent judges of the Supreme Court: (a) Hon’ble Mr. Justice B.P. Jeevan Reddy as Chairman; and (b) Hon’ble Mr. Justice M.B. Shah as Vice-Chairman; and that the Special Investigation Team function under their guidance and direction; that the Special Investigation Team, so constituted, shall be charged with the responsibilities and duties of investigation, initiation of proceedings, and prosecution, and report and be responsible to the Supreme Court, and that it shall be charged with the duty to keep the Supreme Court informed of all major developments by the filing of periodic status reports, and following of any special orders that the Court may issue from time to time.

Writ Petitioners took a preliminary objection that the interlocutory application was not maintainable on several counts. On a careful consideration of the submissions made on behalf of the respective parties in regard to the maintainability of I.A. No.8 of 2011 filed on behalf of the Union of India, wherein, inter alia, a prayer had been made to modify the order dated 4th July, 2011 and to delete the directions relating to the Special Investigation Team in paragraphs 49 and 50 of the said order, the I.A. was held maintainable.

It was held that the Supreme Court had preserved its inherent powers to make such orders as may be necessary for the ends of justice in Order 47 Rule 6 of the Supreme Court Rules, 1966, framed under Article 145 of the Constitution. As had been held in A.R. Antulay Vs. R.S.Nayak & Anr. [(1988) 2 SCC 602] and in S. Nagaraj & Ors. Vs. State of Karnataka & Anr. [(1993) Supp. (4) SCC 595], such a power was not only inherent in the Supreme Court, but the Supreme Court was also entitled to and under an obligation to do justice to exercise such powers as the guardian of the Constitution. Justice transcends all barriers and neither rules of procedure nor technicalities can stand in its way, particularly if its implementation would result in injustice. Vineet Narain Vs. Union of India [(1996) 2 SCC 199] and Manganese Ore (India) Ltd. Vs. Chandi Lal Saha [(1991) Supp. 2 SCC 465] were also referred to.

Even if the present application was to be dismissed as being not maintainable under Article 142 of the Constitution read with Order 47 Rule 6 of the Supreme Court Rules, 1966, it would not preclude the Applicants from filing an application for review under Article 137 of the Constitution. Having regard to the fact that the Supreme Court is the guardian of the Constitution, I.A. No.8 of 2011, even in its present form was held maintainable in the facts and circumstances of the case, which include threats to the security of the country. The objections raised regarding the maintainability of I.A. No.8 of 2011 were rejected.

Hon’ble Mr. Justice S.S. Nijjhar:

The application was held not maintainable for a number of reasons. It was held that the application sought to reopen the whole matter on merits which would not be permissible in an application for modification. It was further held that the application deserved to be dismissed at the threshold. An application for clarification/modification touching the merits of the matter was held not maintainable. The Court can consider the matter, if at all, only upon a review application on limited grounds. In considering the application for review, the procedure laid down under Order XL of the Supreme Court Rules, 1966 read with Article 137 would have to be followed. Review of a judgment is a serious matter and is, therefore, governed by constitutional and statutory provisions. It was held that there was no question of mistaken facts, being presented by anyone to the Court. The application also failed to indicate any miscarriage of justice or injustice which would be caused to any particular class. The present application was held to be wholly misconceived and therefore to be dismissed.


Since the Learned Judges differed in their views regarding the maintainability of I.A. No.8 of 2011 filed in W.P. No.176 of 2009, the matter was directed to be placed before the Hon’ble the Chief Justice of India, for reference to a third Judge.