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The Big Picture – Treaty making powers: Can Judiciary over-rule Executive?


  • The decision of the Supreme Court to direct the government to hand over the entire list of foreign bank account holders in its custody has raised concerns and questions about the issue of treaty and the role of executive and judiciary.
  • All these while the government had been arguing that the list cannot be given as it may breach the confidential clause of various agreements and treaties with other countries.
  • Though the apex court said that it would not reveal the names of account holders and directed the SIT, appointed by it, to pursue the matter, several questions still remain unanswered.
  • Names of 7 people are already revealed.
  • It is not to be assumed that all foreign bank account holders have black money. Some accounts are opened in accordance with the rules and regulations.
  • Generally under the law of treaties, the governments willingly agree and enter into international treaties with the obligations being kept in mind and most of them are incorporated within the local laws so that they become the part of local laws also.
  • There are countries including USA which feel that their own courts have the highest jurisdiction and the treaties are subservient to them to the extent that unless the courts agree they will not be fully implemented. In such countries treaties have to go through verification and approval by the congress and only then the treaties are implemented. Even then the courts have got overruling powers.
  • In countries like India treaties are ratified by a decision of the cabinet.
  • No government of any country would like to enter into an International Treaty which has provisions which are repugnant to their domestic laws.
  • The provision regarding the secrecy in the treaty is stemming from the banking secrecy laws which are prevailing in every country and under these banking secrecy laws there is secrecy between the account holder and the bank. And such secrecy can be violated only when there is a legal requirement.
  • SC has decided to not to reveal the names.
  • In any legal system, if the highest court of the land exercises its original jurisdiction with regard to supervision of investigation, then there is no way that the aggrieved party has the right to appeal.
  • These names can be used as evidences for prosecution.
  • Some opine that opening up of accounts in a third country prima facie suggests the possibility of black money being kept in such accounts which needs to be investigated.
  • Every Indian citizen, by law, is allowed to take out 200000 $ a year to buy a property abroad.
  • This is being seen as judicial overreach by some.
  • It is also being said that the time period given to the SIT to look into the matter and investigate is insufficient.
  • Double Taxation Avoidance Agreement (DTAA) also referred as Tax Treaty is a bilateral economic agreement between two nations that aims to avoid or eliminate double taxation of the same income in two countries.