- Something is rotten in our System: Come together to eet the spreading rot right

Something is Rotten in Our System: Come Together to Set the Spreading Rot Right

Date: July 9, 2012

by Shiva Kant Jha

I have received a number of e-mails from some very distinguished citizens drawing my attention to what Shri S. Gurumurthy has written on certain issues touching 'on how the main state actors - politicians and civil servants - had steeply declined in morals'. He writes that, whilst in the flight from Delhi to Chennai, he had an opportunity to discuss this point with 'a Tamil Nadu cadre IAS officer, known for high integrity'. In course his chat he asked that officer 'a straight question':

'"Can you point at when exactly did the decline start?" He was equally straight. Political morality, he said, crashed with the "advent" of Indira Gandhi, and business, he added, became buccaneering with the "rise" of Dhirubhai Ambani. That was exactly my view too. A simple comparison of the standards of political morality before and after Indira Gandhi's advent and the norms of business before after Ambani's emergence would prove what he had said.'

One of the e-mails I have received refers to Shri S Gurumurthy's article (of 14th June 2012) entitled 'Success sans ethics'.

I am glad that this morbid aspect of our political life is yet not forgotten wholly. I express my good wishes for Sri Gurumurthy, and also those who have drawn my attention to it through e-mails. My intention is not to examine this complex issue at length. But two points I intend highlighting:

(1) First, whilst we have kept on recognising the rot that has set in our polity, no serious effort has ever been made to remedy it. I would draw your attention a few lines from my memoir, On the Loom of Time, which I had written after witnessing closely the melodrama of the Emergency, and the Fodder Scam, and also after closely studying the Reports of various Commissions. Over those days, I was in a position to see what was happening in our polity at work. I was a member of the IRS, and worked in Bihar rising to the rank of the Chief Commissioner of Income-tax for Bihar, Orissa, Assam, and the North-East. In Chapter 11 of my memoir, On the Loom of Time, I had written a few words on 'The Root of All Evil' which, as we all have seen, has grown sturdier and mightier in recent years. I quote from pp173-174:

"(x) The Root of All Evil grew apace

It is seen that the public services in India have registered an abysmal decline after independence. The politicians and the bureaucrats virtually forged an alliance to promote their greed. The Shah Commission considered this to be the very root of all evil. I had occasions to see how deep and morbid this nexus had gone. I was working in close interactions with Shri Venketrama Aiyar Commission of Inquiry about which I have already written something. After referring to the reports of Commissions headed by the Sri S. R Das, Sri Rajgopal Iyengar, Sri Venketrama Aiyar, Sri Madholkar, Sri A. N. Mulla, Sri G.K Mitter, the Shah Commission of Inquiry aptly observed in its Report:

"The Commission is not aware of the action taken, if any, in response to these Reports submitted from time to time in regard to the Minister -Civil Servant relationship. The fact, however, remains that the refrain in all these Reports in so far as this concerns the relationship of the Ministers with the civil Servants, is the same. One cannot but be struck by the near-unanimity in the observations of the several Com- missions on the unhealthy factors governing the relationship between the ministers and the Civil Servants. Yet nothing seems to have been done, at any rate effectively, to set right such of the aspects of these relationships which, prior to the emergency, had contributed to the several developments which came in for indictments by the Commissions. In the light of this, it may be easy to conclude that what happened during the emergency is merely a tragic culmination of the particular trend that had been identified and condemned from time to time by the Commissions of the past. The Commission owes it to the citizen of India to emphasize that appointments of Commissions by themselves are not enough if the Governments concerned do not follow up and implement at least such of the recommendations as are avowedly accepted by the Government. Unless the Government is prepared to apply the corrective principles in the Minister-Civil Servant relationship effectively and with a determination to produce the desired results at different levels and within the several components of the Government, the agonizing impact of this unfortunate malaise would be felt by the common man in the streets, in the villages, in the factories and in the far distant corners of this vast country."

It is an irony of history that the leaders who were shaped during the J.P Movement became involved in the infamous Fodder Scam. The J.P Movement, which worked for the alleviation of the fate of the suffering millions, failed to have an impact on the character of the politicians and the system of governance in the State. It also illustrates the point that it is easy to bring down a government but it is difficult to run a clean and good government.

(xi) My Dismay & the Lessons to be drawn from Bihar's Fodder Scam

So where have we come? The story that I have narrated in this Chapter of my Memoir is the tale of evasion and abdication of duties by the government and its organs and agencies. The Patna High Court bewailed that the "values of public life are fast declining". In fact the 'decline in moral values', which is the core cause of all scams, is, over the recent decades, the burden of song in various decisions of our courts including the Supreme Court of India. We read the events of the past with an iron in our soul. Fali Nariman said about the Emergency:

"One of the lessons of the Internal Emergency (of June 1975) was not to rely on constitutional functionaries. These functionaries failed us - ministers of government, members of Parliament, judges of the Supreme Court, even the president of India."

The Fodder Scam, and the response of the authorities to it and towards its protagonists, deserve the same pungent but saddening comment."

(2). How the entente cordiale inter se the politicians-in-power and the lucky business works I had examined with reference to the concrete facts revealed both by the framing of the Indo-Maritus Tax Treaty, and by its gross abuse which our government knew full well. In the context of what Gurumurthy said, it may be worthwhile to read the last Section of the Chapter 23 ('Profile of a PIL in the Revenue Matters) : at pp. 364-366 ---


During the BJP regime, it was widely talked about that Sri Yashwant Sinha, the then Finance Minister, was responsible for getting the Circular 789 of 2000, issued. It was in the air that one of his relations had been a portfolio manager 44 for some foreign investment funds handling Indian operations. And the then Prime Minister turned a blind eye to all that was going on (reported in the Indian Express of June 5, 2000).

I was surprised when the Attorney General, representing our Government, and Shri Salve, representing the Global Business Institute Limited of the Cathedral Square, Mauritius, submitted before the Supreme Court that the use by the third country resident of the Mauritius tax treaty was "perhaps" "intended at the time when Indo-Mauritius DTAC was entered into". But the Court did not decide the point suggested: but the probability of this assertion colouring the judicial approach could not be ruled out. The unstated, but dexterously suggested, idea was just to free the BJP government (and its then Finance Minister, Mr. Sinha ) from the remissness in promoting 'treaty shopping', and to put the blame on the Congress as the Indo-Mauritius DTAC had been signed when Mrs. Gandhi had visited Mauritius in 1982 along with Mr. Pranab Mukherji. It was unbecoming of both the counsels to suggest this, even in pregnant aside. As the Petitioner, I contradicted them, and even asserted in my Curative Petition: "This conclusion is based on no material." In my letter to Shri Jaswant Singh, the Minister of Finance (during 2002-04) in the BJP Government, I brought to the knowledge of the Government how things had moved, and I requested him to take appropriate actions: to consider whether some legislative change was worthwhile, or whether it was feasible to move the Supreme Court for a reconsideration of its decision in Azadi Bachao so that public revenue and public values were not jeopardised. In the penultimate paragraph of that letter I wrote to then Finance Minister:

'This letter is just pro bono publico in the interest of the common people of this country with per capita income just U.S. dollars 440 [when in
Mauritius it is U.S. dollars 3,540]. We can forget only at our peril Gandhiji's talisman: "Recall the face of the poorest and weakest man whom you have seen and ask yourself if the step you contemplate is going to be of any use to him. Will he gain anything by it?'

But the Government took no action. Even the letter went unacknowledged. The reasons for inaction were understandable.

Under the UPA regime, things are no different. The Common Minimum Programme of the Congress-led United Progressive Alliance, formed in 2004, formulated as one of the items in its programme: "Misuse of double taxation agreements will be stopped." I thought that the Supreme Court's veiled deprecation of the misuse of the Indo-Mauritius DTAC, in Azadi Bachao, would bear some fruits. I felt the Court's cri de coeur would receive a good response, and our Executive, or our Parliament, would take effective remedial steps in the matter. But nothing happened. In the recent months we have witnessed a lot of Brownian motion where things seem to move, but do not move.One of its effects is that, despite all the sound and fury, the major political parties promote only the capitalist agenda where tax havens constitute strategic devices for tax evasion, tax-mitigation, and amassing ill-gotten wealth. The tax havens or secrecy jurisdictions function as the veritable Alsatia (a sanctuary for criminals), and centres for money-laundering. The Wikipedia concludes that Mauritius based " front companies of foreign investors are used to avoid paying taxes in India utilising loopholes in the bilateral agreement on double taxation between the two countries, with the tacit support of the Indian government".

Whether it is Mrs. Gandhi, or Atal Bihari Vajpayee, whether it is Pranab Mukherjee or Yashwant Sinha, the fate of the country is the same: to suffer. It was suggestively said by someone: if Raja Ram becomes the King, Sita is banished, if Duryodhana rules, Draupadi is openly humiliated: Sitas and Draupadis have suffered this way. Bharat Mata's plight, as our deeds attest, is no better. It is the duty of every citizen to think about it. I would be the happiest person if my distressing conclusions are proved wrong. We must not forget what Thomas Jefferson said: "Eternal vigilance is the price of liberty". And we wish that the persons in power keep in their mind what Walt Lippman said :

"Those in high places are more than the administrators of Government bureaux. They are the custodians of a nation's ideals, of the beliefs it cherishes, of its permanent hopes, of the faith which makes the nation out of a mere aggregation of individuals. They are unfaithful to their trust when by word and example they promote a spirit that is complacent, evasive and acquisitive".

In Liversidge v Anderson48 the dissenting Judge Lord Atkin referred to the court "being more executive-minded than the executive". I saw in the course of the PIL that our Government was more corporate-minded than corporations! I also found evidence sufficient to appreciate what Prof. Allen said: "There is, apparently, something in the tranquil atmosphere of the House of Lords which stimulates faith in human nature."49 I appeal to the brooding omnipresent Justice to ensure that someday Truth triumphs, and Dharma rules. I hope someday the Judgment, which failed to provide remedy against our nation's loot, would be overruled with the comment that Liversidge's Case [1942] AC 206 had deservedly received from Lord Diplock in R. v. Rossminster50 : " this House …. were expediently and, at that time, perhaps, excusably wrong,"

Dear reader, I have just told you in brief certain aspects of one of the PILs I conducted experiencing anguish at the ways our Government behaved. I never considered myself a party to the litigation. I, "a single public-spirited taxpayer" had brought the matter before the court to "vindicate the rule of law and get the unlawful conduct stopped"; and thereafter, I acted only pro bono publico to assist the court as an ordinary citizen of the Republic.51 I had used Chesterton's observation as an epigram in Chapter 12 of this Memoir. I would end this Chapter hoping that our nation would no longer be "one vast vision of imbecility". - Links on Shivakantjha - Links on Shivakantjha

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