Hardships faced can’t be seen as shortfall of demonetisation: Centre to SC

Updated on Dec 06, 2022 05:06 AM IST

The petitioners had questioned whether the Government carried out any study linking demonetisation as an effective tool to achieve the objectives of curbing black money, terror financing or fake currency.

The Government undertook demonetisation under Section 26(2) of the Reserve Bank of India (RBI) Act, 1934 by getting a recommendation from the Central Board of RBI. (HT file)
The Government undertook demonetisation under Section 26(2) of the Reserve Bank of India (RBI) Act, 1934 by getting a recommendation from the Central Board of RBI. (HT file)
ByAbraham Thomas

Hardships caused due to demonetisation cannot be the basis for faulting the Government’s 2016 notification to ban currency notes of 500 and 1000, the Centre told the Supreme Court, adding that the cutoff date December 30 fixed by the Centre to deposit old currency notes did not violate the fundamental rights of citizens.

Defending the November 8, 2016 notification by which nearly 86% of the currency in circulation was withdrawn, Attorney General R Venkatramani said, “Difficulties and issues that might have arisen in the course of giving effect to the notification (of November 8) and the Specified Bank Notes (Cessation of Liabilities) Act, 2017 cannot be said to be flaws, affecting the decision-making process.”

He was responding to a bunch of petitions challenging the power of the Government to issue the November 8 notification, procedural flaws in the process followed, and the loss caused to several citizens who failed to deposit the demonetised currency by December 30, 2016 for various reasons. A bench of justices S Abdul Nazeer, BR Gavai, AS Bopanna, V Ramasubramanian and BV Nagarathna will continue hearing the matter on Tuesday.

Commenting on the cut-off date prescribed by Centre, he submitted, “In all instances of fixation of a particular date, it stands to reason that there will be persons on both sides of the said line and those who are left out will be aggrieved by their exclusion. As long as any exclusion is not deliberate or discriminatory, Court will not test the validity of a cut-off date.”

Nor was the apex court the forum to discuss how the government managed currency from the perspective of combating terror financing, counterfeiting, and black money, he added.

“The question as to whether the government should explore non currency management measures as better or wise choices for the purpose of addressing these evils, is not a matter for the court, nor a subject of judicial review.”

The Government undertook demonetisation under Section 26(2) of the Reserve Bank of India (RBI) Act, 1934 by getting a recommendation from the Central Board of RBI. Once the 2017 Act was introduced, the AG argued, the notification of November 8 merged with the Act and the petitioners ought to challenge the legislation.

The petitioners had questioned whether the Government carried out any study linking demonetisation as an effective tool to achieve the objectives of curbing black money, terror financing or fake currency. “Executive policies and legislations alike, are given effect by the respective branches of government with certain objectives and goals in mind, after consideration and deliberation...there may be something left to be desired in the manner of their implementation. This does not mean that the policy or legislation in question is per se bad or that it deserves to be struck down or rolled back altogether,” the AG said.

RBI on its part clarified that there was no procedural error in the passing of the November 8 notification. Senior advocate Jaideep Gupta told the Court that the RBI Central Board which met on November 8 had considered the matter at length and was having the requisite coram. The banking regulator denied that it “meekly obeyed” the command given by the Government.

The petitioners led by senior advocate P Chidambaram questioned the reluctance of the government and RBI to share the minutes, agenda and resolution of the November 8 meetings to the Court. Both the AG and Gupta told the Court that there was nothing to hide.

Get Latest India Newsalong with Latest Newsand Top Headlinesfrom India and around the world.
SHARE THIS ARTICLE ON
SHARE
Story Saved
OPEN APP
×
Saved Articles
Following
My Reads
My Offers
Sign out
New Delhi 0C
Monday, January 30, 2023
Start 15 Days Free Trial Subscribe Now
Register Free and get Exciting Deals