Holding of more than 10 scrapped notes of Rs 500/1000 denomination will be punishable with a minimum fine of Rs 10,000, according to a new bill introduced in the Lok Sabha on Friday with an aim of eliminating the “possibility of running a parallel economy” using these.
The bill, to replace the ordinance promulgated on December 30, also provides for a minimum fine Rs 50,000 for false declaration by persons who were abroad during the demonetisation period (November 9 - December 30, 2016) and given time to deposit the scrapped notes with RBI till March 31.
Once passed by Parliament, possession of more than 10 pieces of the old notes by individuals and more than 25 pieces for study, research or numismatics purpose will be a criminal offence attracting fine of Rs 10,000 or five times the cash held, whichever is higher.
The Specified Bank Notes (Cessation of Liabilities) Bill, which seeks to end the liability of RBI and the government on the currency notes demonetised in November last, was introduced by Finance Minister Arun Jaitley amid stiff opposition by Trinamool Congress, which called it “illegal” and “anti-national”.
Giving rationale behind the legislation, the document placed before Lok Sabha says it is aimed at eliminating the “possibility of running a parallel economy using the scrapped notes.
“There is a possibility of running in a parallel economy by unscrupulous elements with Specified Bank Notes unless the possession of such notes is declared illegal,” it said.
The bill states that the government took the demonetisation decision on the recommendations of the RBI’s central board to eliminate unaccounted money and fake currency notes from the financial system.
The bill prohibits the holding, transferring or receiving of such notes from December 31, 2016 and seeks to confer power upon the court of a first class Magistrate to impose penalty.
Introduction of the bill was opposed by Trinamool Congress leader Saugata Roy, triggering a banter between him and Jaitley who questioned the ground on which Roy was opposing the move.
Roy then took a jibe at Jaitley, saying the minister was not aware of the Lok Sabha rules as he was never its member. Jaitley is a member of the Rajya Sabha.
The jibe evoked strong objections from the treasury benches with parliamentary affairs minister Ananth Kumar saying the finance minister is an esteemed member of the Cabinet and adjudged outstanding Parliamentarian.
Allowed by speaker Sumitra Mahajan to express his objection, Roy said the bill is “illegal” as the demonetisation statement made by Prime Minister Narendra Modi was without any notification and it should have come from the RBI as it is the central bank which promises to pay the bearer of a currency note its real value.
“It is outside the minister’s legislative competence. It (bill) is anti-national... Having never been a member of this House, he does not understand its rules,” he said.
Jaitley said Roy was “incorrect” in several aspects and cited the law under which the demonetisation notification was introduced to asset that the due process was followed.
He then took a counter dig at Roy, saying “It will add to his parliamentary experience as now he is getting to learn.”
The issue of demonetisation had virtually washed out the Winter session.