Pulling up the government for the "laggardly pace" in investigations into the issue of black money stashed abroad, the Supreme Court today appointed a Special Investigation Team (SIT) headed by former apex court judge B P Jeevan Reddy to investigate and monitor steps taken to bring the unaccounted money back home.

Another former apex court judge M B Shah will be Vice Chairman of the 13-member SIT into which Director of Research and Analysis Wing (RAW) has been inducted.

A bench comprising Justices B Sudershan Reddy and S S Nijjar, which is seized of the issue raised in a PIL by noted jurist Ram Jethmalani and others, pronounced the order saying monies generated and secreted away reveal the degree of "softness of the State".

The court rejected the demand for disclosing the names of individuals which had figured in the list given by German government but ordered giving out the names of those against whom show-cause notices have already been issued and prosecution has taken place.

It criticised the government over the handling of black money cases saying that despite issues of large sums of unaccounted monies, allegedly held by certain named individuals, and loose associations of them, "the investigations into the matter proceeded at a laggardly pace".

The court observed, "The amount of unaccounted monies, as alleged by the government itself is massive. The show cause notices were issued a substantial length of time ago.

"The named individuals were very much present in the country. Yet, for unknown, and possibly unknowable, though easily surmisable, reasons the investigations into the matter proceeded at a laggardly pace," it said while referring to Hassan Ali khan case in which progress was made only at its intervention.

The Bench said that the SIT shall be carrying investigation, criminal proceedings and prosecution relating to the stashing of the blackmoney in foreign banks and also cases arising from the unaccounted money involving Pune based stud owner Hassan Ali Khan and Kolkata businessman Kashi Nath Tapuria.

The court rejected the opposition of the government to the setting up of the SIT saying that it failed to provide any principled reasons as to "why that would be undesirable, specially in the light of many lapses and lacunae in its action in these matters spread over the past four years".

While converting the High Level Committee(HLC) formed by the government to monitor all issues relating to black money into an SIT, the bench directed that the panel will also have the Director of RAW into the already ten-member team.

The court also directed the government to make public names of those individuals with accounts in Liechtenstein bank as revealed by Germany with respect of whom investigation have been concluded, either partially or wholly and show cause notices have been issued and criminal prosecution initiated.

However, the Court exempted the government from revealing the names of those individuals who have accounts in banks of Liechtenstein and revealed by Germany with respect of which investigations are still in progress and no information or evidence of wrong doing was yet available.

"The revelation of details of bank accounts of individuals, without establishment of prima facie grounds to accuse them of wrong doing, would be a violation of their rights to privacy," the bench said.

"Details of bank accounts can be used by those who want to harass, or otherwise cause damage, to individuals.

We cannot remain blind to such possibilities, and indeed experience reveals that public dissemination of banking details, or availability to unauthorized persons, has led to abuse," it added.

The court said during the interrogation of Hassan Ali Khan and the Tapurias, undertaken for the first time at the behest of this Court, many names of important persons, including leaders of some corporate giants, politically powerful people, and international arms dealers have cropped up.

"So far, no significant attempt has been made to investigate and verify the same.

"This is a further cause for the grave concerns of this Court, and points to the need for continued, effective and day to day monitoring by a SIT constituted by this Court, and acting on behalf, behest and direction of this Court," the bench said.

The apex court observed that the unaccounted money going abroad is a reflection of compromise of the government's ability to manage the affairs of the state according to constitutional perspective.

"Unaccounted monies, especially large sums held by nationals and entities with a legal presence in the nation, in banks abroad, especially in tax havens or in jurisdictions with a known history of silence about sources of monies, clearly indicate a compromise of the ability of the State to manage its affairs in consonance with what is required from a constitutional perspective," the court said.

It said that the failure of the government to control the phenomenon of black money stashed in foreign banks is an indication of weakness and softness of the state in managing its affairs.

"Large quanta of monies stashed abroad, would also indicate a substantial weakness in the capacity of the State in collection of taxes on incomes generated by individuals and other legal entities within the country," the court said.

It said, "A substantial degree of incapacity, in the above respect, would be an indicia of the degree of failure of the State".

Justifying its decision to constitute the SIT, the bench said that there was lack of seriousness on the part of the government to take take firm action against the person accused of stashing unaccounted money in foreign banks.

"The absence of any satisfactory explanation of the slowness of the pace of investigation, and lack of any credible answers as to why it did not act with respect to those actions that were feasible, and within the ambit of powers of the Enforcement Directorate, such as custodial investigation, leads us to conclude that the lack of seriousness in its efforts are contrary to the requirements of laws and constitutional obligations," the bench said.

The court also raised concern over the Centres decision for granting licence to a Swiss bank UBS whose credentials have come under suspicion.

"From the status reports, it is clear that the problem is extremely complex, and many agencies and departments spread across the country have not responded with the alacrity, and urgency, that one would desire.

Moreover, the Centre has been unable to answer any of the questions regarding its past actions, and their implications, such as the slowness of the investigation, or about grant of license to conduct retail banking by UBS, by reversing the decision taken earlier to withhold such a license on the grounds that the said bank?s credentials were suspect," the court said.

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Action only after studying order: govt

The government today said the future course of action on black money will be decided after studying the Supreme Court order to appoint a high-level team to monitor the investigation and the steps being taken to bring illegal wealth stashed away in foreign banks.

"... we will examine it (the order)...and then we will decide what course of action will be necessary," Finance Minister Pranab Mukherjee told reporters when asked to comment on the Supreme Court's order on black money.

Home Minister P Chidambaram said, "I do not think one should give off-the-cuff reaction on a Supreme Court order. If Supreme Court has given an order it is final because it is the final court. Let us first read the order."

The Supreme Court today appointed a high-level Special Investigation Team (SIT) headed by former Supreme Court judge B P Jeevan Reddy to monitor the investigation and the steps being taken to bring back black money stashed away in foreign banks.

Besides Justice Reddy, who will be the chairman of the SIT, the apex court appointed former judge M B Shah as the vice-chairman of the panel.

Chidambaram also said that after going through the details a government spokesman will respond to it, if necessary.

A bench comprising justices B Sudershan Reddy and S S Nijjar passed the order on a petition filed by eminent jurist Ram Jethmalani and others seeking directions to the government to track black money stashed away abroad and bring it back.

Slap in the face for govt: BJP

BJP today welcomed the Supreme Court appointing a Special Investigation Team (SIT) to look into the black money issue, saying it came as a "slap in the face" of the UPA government for consistently failing to bring back the money stashed in foreign banks.

"We welcome the Supreme Court decision to appoint a SIT on the Black money issue. This decision has fully exposed the government and the Congress. The government does not want to take any tough and honest measures to check corruption and black money. This decision is a slap in the face of the government," BJP spokesperson Prakash Javadekar said.

"This decision is proof that even the court does not trust the government's intentions on tackling corruption," he said.

A SIT headed by retired judge B P Jeevan Reddy was today appointed by the Supreme Court to look into the matter.

"The government has consistently failed to bring back Indian black money. This is because the government is merely engaged in cover-up. The government is trying to justify this by saying it has signed double taxation avoidance agreements with these countries," Javadekar said.

He demanded that the government should make the list of those having black money public and also reveal if it has an action plan to deal with this menace.

"We demand that the government should declare Indian Black money abroad as a national asset and also bring a Bill in the forthcoming monsoon session to deal with the problem," Javadekar said.

Cong steers clear of comments on SC's SIT direction

Congress today steered clear of the Supreme Court decision to appoint a high-level Special Investigation Team headed by former judge B P Jeevan Reddy to monitor the investigation and the steps being taken to bring back black money stashed away in foreign banks.

"We have not seen the text of the judgement. It will be very difficult for us to respond and I do hope the Government will respond," was all that party spokesman Shakeel Ahmed told reporters.

He said this when asked whether the apex court order was a strong indictment of the party-led coalition at the Centre in the wake of a series of scams and scandals.

Besides Justice Reddy, who will be the chairman of the SIT, the apex court also appointed its former judge, Justice M B Shah as the vice-chairman of the panel.