In re Letters Rogatory Issued by Dir. of Insp. of Gov. of India

• Citation: 385 F.2d 1017
• Decision Date: 09 November 1967
• Docket Number: Docket 31603.,No. 144,144
• Parties: In the Matter of LETTERS ROGATORY ISSUED BY the DIRECTOR OF INSPECTION OF the GOVERNMENT OF INDIA to take the Testimony of the President or Other Designated Representative of Messrs. Brown Brothers, Harriman & Company and the President or Other Designated Representative of Chase Manhattan Bank.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

385 F.2d 1017 (1967)

In the Matter of LETTERS ROGATORY ISSUED BY the DIRECTOR OF INSPECTION OF the GOVERNMENT OF INDIA to take the Testimony of the President or Other Designated Representative of Messrs. Brown Brothers, Harriman & Company and the President or Other Designated Representative of Chase Manhattan Bank.

No. 144, Docket 31603.

United States Court of Appeals Second Circuit.

Argued October 4, 1967.

Decided November 9, 1967.

Daniel F. Kolb, New York City (Davis, Polk, Wardwell, Sunderland & Kiendl, New York City) (Donald N. Dirks, Dennis H. Allee, New York City, of counsel), for appellant Brown Brothers, Harriman & Co.

Robert S. Ogden, Jr., New York City (Donovan, Leisure, Newton & Irvine, New York City) (Granville Whittlesey, Jr., New York City, of counsel), for appellant A. K. Jain.

Alvin R. Cowan, New York City (Abrams & Cowan, New York City), for appellee, Director of Inspection of the Government of India.

Before FRIENDLY, HAYS and ANDERSON, Circuit Judges.

FRIENDLY, Circuit Judge:

This proceeding began with the presentation to the District Court for the Southern District of New York of letters rogatory by a Director of Inspection under the Income Tax Act of the Government of India. The Director informed the court that income tax assessments of A. K. Jain of Calcutta for various years were pending before an Income-Tax Officer appointed under said Act and that records and other information of Brown Brothers, Harriman & Co. and the Chase Manhattan Bank might be relevant to the determination of the amount Jain should be assessed. He asked that representatives of the two banks be required to appear and testify, adding "and I shall be ready and willing to do the same for you in a similar case when requested." An ex parte order was entered appointing a commissioner "to take and execute the aforesaid Letters Rogatory" and a subpoena duces tecum issued to Brown Brothers, Harriman & Co. Jain, later joined by that company, moved to vacate the order and quash the subpoena; the motion was denied. This appeal by Jain and Brown Brothers, Harriman & Co. followed.

Although our appellate jurisdiction has not been questioned, we must consider this in the first instance. United States v. Fabric Garment Co. (Eve Abrams, Witness), 383 F.2d 984 (2 Cir. 1967). If the district court had granted the motion to vacate and quash, appealability would be clear since its action would have been equivalent to the dismissal of a complaint praying for the issuance of a commission and a subpoena. Compare Horizons Titanium Corp. v. Norton Co., 290 F.2d 421 (1 Cir. 1961). The converse situation could be distinguished since the witness is able to obtain review by allowing himself to be cited for contempt — however unlikely his taking that course would be when as here he has no stake in the basic controversy. Compare Alexander v. United States, 201 U.S. 117, 26 S.Ct. 356, 50 L.Ed. 686 (1906); Cobbledick v. United States, 309 U.S. 323, 60 S.Ct. 540, 84 L.Ed. 783 (1940). Such meagre authority as there is supports the appealability of an order in aid of foreign letters rogatory, Janssen v. Belding-Corticelli, Ltd., 84 F.2d 577 (3 Cir. 1936), as has long been held with respect to orders enforcing the subpoenas of independent administrative agencies, Ellis v. I. C. C., 237 U.S. 434, 35 S.Ct. 645, 59 L.Ed. 1036 (1914). The distinction between such cases and the Alexander-Cobbledick line of authority is that in these instances the proceeding before the district court to compel testimony stands separate from the main controversy. We have reached the same result in the analogous cases of the grant of a subpoena in aid of an extradition proceeding, First Nat'l City Bank v. Aristequieta, 287 F.2d 219, 222-223 (2 Cir. 1960), see also Aristequieta v. Jiminez, 274 F.2d 206 (5 Cir. 1960), both vacated and remanded with instructions to dismiss as moot, 375 U.S. 48, 49, 84 S.Ct. 144, 11 L.Ed.2d 106 (1963); and of an order to appear before the Internal Revenue Service, see In re Albert Lindley Memorial Hospital, 209 F. 2d 122 (2 Cir. 1953), cert. denied sub nom. Cincotta v. United States, 347 U. S. 960, 74 S.Ct. 709, 98 L.Ed. 1104 (1954); United States v. Kulukundis, 329 F.2d 197 (2 Cir. 1964). We follow these rulings here.

The order under appeal was made and the subpoena issued under the asserted authority of 28 U.S.C. § 1782 which, as amended in 1964, provides:

"The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal. The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the application of any interested person * * *."

Earlier versions of the statute had authorized an appropriate district court to take the deposition of a witness for use in a "suit for the recovery of money or property depending in any court in any foreign country", 12 Stat. 769 (1863), "in any civil action pending in any court in a foreign country", 62 Stat. 949 (1948), and finally "in any judicial proceeding pending in any court in a foreign country", 63 Stat. 103 (1949). The reports of the Judiciary Committees of both houses offered the following explanation of the 1964 amendment, which was part of a bill for general reform of judicial procedures in litigation with international aspects:

"Subsection (a) of proposed revised section 1782 also describes the foreign proceedings in connection with which U. S. judicial assistance may be granted. A rather large number of requests for assistance emanate from investigating magistrates. The word `tribunal\' is used to make it clear that assistance is not confined to proceedings before conventional courts. For example, it is intended that the court have discretion to grant assistance when proceedings are pending before investigating magistrates in foreign countries. (See Lelievre in Letters Rogatory 13 (Grossman ed., 1956).) In view of the constant growth of administrative and quasi-judicial proceedings all over the world, the necessity for obtaining evidence in the United States may be as impelling in proceedings before a foreign administrative tribunal or quasi-judicial agency as in proceedings before a conventional foreign court. Subsection (a) therefore provides the possibility of U. S. judicial assistance in connection with all such proceedings. * * *" H.R.Rep. 1052, 88th Cong. 1st Sess. p. 9 (1963); Sen.Rep. 1580, 88th Cong. 2d Sess.; 1964 U. S. Code Cong. & Adm. News p. 3788.

The District Court held that the inquiry before the Income-Tax Officer was "a proceeding in a foreign or international tribunal" and that, in light of the announced purpose of Congress to broaden the assistance our courts were to render to foreign countries,¹ its discretion should be exercised favorably.

Under Indian Income Tax procedure the annual return is simply a step toward the making of an assessment, with nothing due from the taxpayer until that has been done. Assessment is made by the Income-Tax Officer either on the basis of the return alone if he is satisfied with it, Indian Income Tax Act of 1961, § 143(1), or after serving a notice requiring the taxpayer to attend at his office or to produce "any evidence on which the assessee may rely in support of the return." § 143(2). In the latter event, which evidently has occurred in Jain's case, the Officer "after hearing such evidence as the assessee may produce and such other evidence as the Income-Tax Officer may require on specified points, and after taking into account all relevant material which the Income-Tax Officer has gathered," shall make an assessment, § 143 (3); if the assessee fails to furnish all the desired information, the Officer may make a "best judgment assessment." The taxpayer can appeal an assessment, in the first instance to an Appellate Assistant Commissioner, § 246, and thereafter to an Appellate Tribunal, § 253. In such event the Income-Tax Officer defends his assessment, § 250. While the Government cannot appeal, Jain says this is of little consequence since the Income-Tax Officer is obliged to "follow the orders, instructions and directions" of the Central Board of Revenue, § 119; the Director counters that these instructions are general and that, as the High Court of Madras has said, the Board cannot "tell the assessing authority, the Income-Tax Officer, what to do and what not to do in regard to a particular assessment" since this "would be against the grain of the judicial powers which the officer is supposed to exercise." S. B. Adityan v. First Income-Tax Officer, 52 I.T.R. 453, 460 (1964).

While Congress materially expanded the scope of 28 U.S.C. § 1782 in 1964, it did not go to the full extent of authorizing a district court to execute letters rogatory whenever requested by a foreign country or a party there; the testimony must be "for use in a proceeding in a foreign or international tribunal." The amendment must be interpreted in terms of the mischief it was intended to rectify. The reference in the quoted committee reports to proceedings "pending before investigating magistrates in foreign countries" was explained by the citation of a 1956 paper pointing out that about half of the letters rogatory received by the French Consulate in New York — and enforced by the United States District Courts — issued from juges d'instruction, whose investigations were only dubiously within 28 U.S.C. § 1782 as it then stood. The juge d'instruction occupies a place in the French legal system somewhat parallel to that of the grand jury in the Anglo-American system, in that it is he who decides whether the evidence against a person accused of a major crime is sufficient to require him to stand trial. The juge d'instruction usually enters the case at the request of the procureur, the counterpart of the district attorney, but he may also be...