NEW DELHI: The Centre on Tuesday repeatedly told the Supreme Court that disclosing names of all Indian foreign bank account holders without arriving at their alleged illegality would breach confidentiality clause in existing bilateral double taxation avoidance agreements signed by India with other countries.

Attorney general Mukul Rohatgi said these agreements were an important source of information about Indians operating accounts abroad and allegedly stashing ill-gotten monies in them. He said if the Centre disclosed all names without launching prosecution, then it would jeopardize the prospect of India signing similar agreements with other countries in future.

But the Supreme Court stunned the government saying: "Please do not give that confidentiality certificate. We do not want those who have stashed black money abroad to take advantage of it."

Can the Supreme Court have dictated to the Union government in signing of bilateral agreements and treaties with other countries, which is a sovereign function? By this remark, did the SC encroach into the Union government's sovereign functions?

The first Berubari Union case, opinion in which was given by SC on April 1, 1959, continues to hold good on the treaty making power of Union government. The ratio of the judgment was slightly modified in the second Berubai Union case [1960 (3) SCR 250].

The apex court had said: "The power of making treaties is within the sovereign power and resides both in the executive and in Parliament. What the executive can do in respect of treaties and agreements is part of the Governmental function."

"There is thus no doubt about the legislative competence of Parliament to legislate about any treaty, agreement or convention with any other country and to give effect to such agreement or convention," it had said in the first case.

It had put a caveat that "the treaty-making power would have to be exercised in the manner contemplated by the Constitution and subject to the limitations imposed by it."

In Maganbhai Ishwarbhai Patel vs Union Of India [1969 SCR (3) 254], the apex court on 9 January, 1969, had said once a treaty was concluded by the Government in exercise of its sovereign powers, it was the duty of all three branches - Legislature, Executive an Judiciary - to help implement it if it was within the constitutional framework.

But, the Centre on Tuesday did not question the Supreme Court's constitutional competence to question its powers to enter into a bilateral agreement with a foreign country that provided a globally standardized clause of confidentiality about information exchanged between the countries on taxation purposes which could be waived only when prosecution was launched against tax evaders.

It readily agreed to provide the names of all Indians in sealed cover to the apex court on Wednesday.

