Mukul Sinha: Hypocrisy of Anna’s Lokpal

It has been claimed that more than one crore missed phone calls were made to Anna Hazare in support of the Janlokpal bill. Unfortunately, none of the callers could ask him whether scamsters like Ketan Parekh, Telgi or the late Harshad Mehta could have been booked under the law that Anna says will root out corruption in the country.

These three gentlemen - Harshad, Ketan and Telgi - together siphoned off more money by fraud and cheating than many others like Quattrocchi and Raja involved in sarkari scams. Yet Anna's much-touted Janlokpal law will not even book them, much less send them to jail.

Then why is Anna insisting that the prime minister should be included in the scope and ambit of the Janlokpal bill while being indifferent to the exclusion of illustrious gentlemen like Ketan and Telgi? To understand this embarrassing contradiction, we need to do a dissection of 'corruption' as defined by Anna and his merry men.

Many people will be shocked to learn that the Janlokpal bill has not developed its own definition of this all-important delinquency it seeks to uproot. The authors of the Janlokpal bill have, in section 2(4), defined corruption to include "anything made punishable under Chapter IX of the Indian Penal Code or under the Prevention of Corruption Act (PCA), 1988." The definition is, therefore, not original but borrowed from the PCA and it suffers from all the defects of the parent law.

The PCA was never meant to tackle corruption in general but was enacted to punish "public servants" misusing their office to give favours for a consideration, usually money. The Janlokpal Bill, therefore, borrows and adopts an extremely restrictive definition of corruption from the PCA. This definition excludes every type of fraudulent act or cheating in both public and private domains which are punishable under sections 410 to 424 of the IPC.

In this situation, people like Harshad Mehta (if he had been alive), Ketan Parekh and Telgi can even join the "second freedom struggle" of Anna to enact the Janlokpal bill as they will be outside the scope of the 'People's Lokpal'. Be that as it may, the country should not be burdened with yet another useless law due to the arrogant righteousness of self-appointed guardians of civil society.

Any claim that a particular law can eradicate corruption is a dishonest claim far removed from the truth. With the advent of globalisation, corruption has become an integral part of all transactions. It is, therefore, required to understand that rooting out corruption is almost an impossible task. It flows across borders at enormous speed, visiting profitable bourses and special economic zones or tax havens. Money now is no longer black or white; it is just green.

The most important factors behind the generation of 'black' money are the policies of the government itself. The creation of SEZs or SIRs and exemptions given to industries within such zones from all types of taxes is an open invitation to tax evasion. This becomes even more pronounced when India signs a treaty with other small countries for tax avoidance. A small island nation like Mauritius perhaps generates more black money than all the SEZs put together because of the two-decade-old bilateral agreement, the Double Taxation Avoidance Convention (DTAC).

Foreign companies masquerading as Mauritian companies have invested in India. Taking advantage of the DTAC, they avoid paying taxes not only in Mauritius but also in India. The probe by a Joint Parliamentary Committee into the 2001 stock market scam in which Ketan Parekh was among the kingpins, had revealed large-scale corruption by Mauritius-based companies. It appears that a case was filed in the Delhi high court against the misuse of DTAC way back in 2002. The high court had nullified the central government's order regarding the convention with Mauritius but, in October 2002, the NDA government filed an appeal in the Supreme Court against the high court order.

A consortium of international investors, represented by the Global Business Institute (GBI), joined the government in filing the appeal. Arun Jaitley, who became the Union Minister for Law and Justice in 2003, appeared on behalf of the GBI. The Supreme Court reversed the Delhi high court's judgment and ruled that it was the sovereign right of the state to enter into treaties with other countries.

Thus the DTAC continued and, just a few days back, the Sensex dipped heavily at the mere rumour that the UPA Government might review the DTAC with Mauritius. The irony is that the same Arun Jaitley who appeared for the GBI to argue for the continuation of DTAC was now sitting at Rajghat demanding that black money should be brought back!

Such is the hypocrisy of our times.