At a time when most of us were riveted on Operation Sindoor, a decision by judges of the Supreme Court of India (SC) to voluntarily declare their assets went largely unnoticed. The disclosures are a step forward from the sporadic and minimal disclosures made by judges in the past and are of significance to anyone who needs to knock on the doors of justice. Not only does it mark an important step towards transparency in India’s opaque judicial system, but it has special importance for investors. Let me tell you why.
In a democracy, the judiciary is often the final arbiter of accountability. Yet, the Indian judiciary, which has prescribed tough disclosure rules even for elected representatives, has resisted calls for disclosure and transparency going as far back as 1997. Efforts to legislate asset declarations in 2010 and again in 2023 failed. Even today, an overwhelming majority of judges shield their assets from public view.
The recent disclosures were also a response to embarrassment caused by the 14th March incident involving justice Yashwant Varma of the Delhi High Court, in which a large amount of burning cash was discovered during a fire at his residence (Details: Justice Yashwant Varma Controversy: The Unanswered Questions).
In May, the SC responded by publishing (https://www.sci.gov.in/assets-of-judges/ ) assets disclosures by several sitting judges on its website. Although only 21 of the 33 SC judges have complied, it is an important start.
At the high court level, transparency remains dismal. Of the 749 judges posted across 25 high courts, only 98—or just 13%—have disclosed assets publicly. Kerala, Delhi and Punjab & Haryana High Courts account for over 80% of these disclosures. The Gujarat High Court has gone so far as to argue there is no public interest in such transparency.
It’s worth noting that, back in 2009, the SC had resolved to make asset disclosures voluntary—a move that led to very little compliance. Even today, not all judges have felt the pressure to disclose their assets (21 Supreme Court Judges Disclose Assets under New Transparency Mandate).
This is not how the developed world works. A World Bank opinion piece shows that, far back as in 2016, 150 countries had made asset declaration mandatory for judges. The report, written in the context of Ukraine’s attempt to curb corruption at that time, had noted that public disclosure of private assets does not inherently violate privacy laws, especially when weighed against the compelling public interest in detecting corruption and preventing conflicts of interest.
In 2023, the US enacted legislation mandating disclosure of investments by judges and requiring recusals where conflicts exist. Countries such as the UK, Canada, South Korea, the Philippines, and even Russia have codified ethical standards for judicial conduct. Of course, rules do not guarantee judicial purity. But codified norms allow for action when there is a mismatch between declared and actual wealth—something India continues to shy away from.
The disclosures by SC judges make for interesting reading. Most show a conservative preference for fixed deposits (FDs), public provident funds (PPFs), real estate (often inherited) and some gold and jewellery. Only three judges report investments in shares, mutual funds, or portfolio management—either trivial or legacy investments from their past legal careers. For instance, former chief justice Sanjiv Khanna disclosed FDs, a PPF account, modest stock holdings of Rs14,000 and property. Justice Bela M Trivedi has Rs60 lakh in mutual funds. Justice KV Viswanathan alone has a significant portfolio stemming from his days as a successful lawyer.
Does this conservatism reflect ethical concerns—judges avoiding conflicts of interest by steering clear of company shares, stock broking firms and mutual funds? Possibly, but not in every case. After all, allegations about judicial corruption have erupted repeatedly and long before justice Varma’s burnt cash issue.
In 2009, Prashant Bhushan, a leading civil rights lawyer, famously alleged in a media interview that half of the past 16 chief justices of India (CJIs) were corrupt. It led to significant legal and public scrutiny with contempt proceedings initiated against him. This had prompted Shanti Bhushan, his father and a former law minister, to submit evidence of corruption, escalating the controversy. In 2022, the SC dropped contempt proceedings against Mr Bhushan, closing the case but keeping the issue alive. In 2011, justice PD Dinakaran, former chief justice of the Karnataka High Court, was accused of land grabbing and unaccounted wealth. He resigned before impeachment proceedings were concluded.
Clearly, caution in market investments by the judiciary is not merely about ethics. It may also stem from risk aversion—or a fundamental distrust of India’s stock markets. This raises deeper questions. A highly decorated policy-maker, now retired, asked me whether the judges’ reluctance to touch capital market investments signals a broader lack of confidence in the system.
This would be ironic, given that India now boasts one of the world's most sophisticated market infrastructures—complete with dematerialisation and near-instant settlements. India’s National Stock Exchange (NSE) is now among the five biggest exchanges in the world and the number of retail investors has soared to over 110mn (million). Indians are also making vast investments in systematic investment plans (SIPs) of mutual funds. But none of this has apparently tempted our judges to invest.
From a conflict-of-interest standpoint, this conservatism is very commendable. But it also reveals a potential blind spot. Judges who lack understanding of capital markets may not grasp the complexity of rules and regulations governing disclosures, transparency, fiduciary obligations, insider trading and the importance of deterrent penalties.
This disconnect has had consequences. In 2007, I wrote in The Indian Express that: “One of the biggest challenges of securities regulators has been to sensitise the judiciary to the nuances of capital market regulation... There have been innumerable cases where the Securities Appellate Tribunal (SAT) has slashed monetary penalties to meaninglessness without understanding that punitive financial damages are the only real deterrent to financial crime.” That was a time when SAT even taken it upon itself the strange task of determining whether the stigma of wrongdoing should attach to individuals indicted for insider trading. Its action called into question the very basis of action against insider trading and market manipulation.
In 2021, I had again documented how the SC had failed to grasp the significance of imposing exemplary penalties on credit rating agencies.
These agencies had played a central role in enabling massive corporate frauds and defaults—from IL&FS to Dewan Housing Finance—by awarding high credit ratings right until they collapsed and inflicted debilitating losses on investors, home-owners and creditors. This had happened after SAT has reduced the penalty imposed by the market regulator, but the SC had dismissed its appeal. The judgement effectively told investors: trust ratings at your own risk and don’t expect consequences for rating agencies who fail in their fiduciary duties.
In other words, failure to grasp the stringency needed to deal with financial misdemeanours can mean judicial indulgence towards speculators, delinquent corporates, compromised auditors and negligent rating agencies. The failure to punish wrongdoing effectively erodes investor confidence in regulation and its enforcement. At the same time, judges who don't understand markets may also fail to grasp why fiduciary actors and regulators -- like the chairperson of the Securities and Exchange Board of India (SEBI) – must meet far higher standards of transparency and disclosure than regulated entities.
Avoiding capital markets is a personal choice. But ignorance of how they function is not an option—especially for those charged with interpreting the laws that govern them. India urgently needs a larger pool of judges who understand securities laws and financial regulation. Today, that number can be counted on one hand.
Unless courts appreciate the fundamental purpose of deterrent penalties, transparent enforcement and institutional accountability, India will continue to oscillate between regulatory overreach and judicial under-reach—with investor confidence the casualty.
Comments
parimalshah1
4 weeks ago
The way the courts are behaving nowadays, listening to Sibal and Singhvis of India; a common man whose cases are delayed for generations, is bound to lose faith in judiciary. Maybe, it is now time for real Sarkar!
Judicial reforms is the need of the hour. Judicial corruption and impartiality (or lack of) is well known. Corrupt judges should belong in jail. Period. Re-assigning judges is a joke. I think SC/HCs has been one of the most pernicious and tainted of all the institutes in the country. Their conduct and overstepping of boundaries has been shameful too. SEBI looks like a saint when compared to the judiciary.
The parliament cannot do anything other than change the constitution and reform the entire judiciary, which cannot happen this term because the numbers are not there. Until then, we are saddled with a legacy judicial system riddled with holes and endless failings. It's something we have to deal with for generations to come. Sadly.
Judicial corruption skyrocketed post emergency and post Modi as PM the gang of pseudo secular is playing dual role blackmailing and with this arrogance of judges skyrocketed and they started challenging government.
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The parliament cannot do anything other than change the constitution and reform the entire judiciary, which cannot happen this term because the numbers are not there. Until then, we are saddled with a legacy judicial system riddled with holes and endless failings. It's something we have to deal with for generations to come. Sadly.
Just my two cents.