SC to hear pleas challenging demonetisation, Centre’s steps to mitigate issues

The Supreme Court will on Monday take up petitions challenging the constitutional validity of demonetisation and the inconvenience caused to people by the government’s sudden decision.
People wait outside an ATM to withdraw and deposit money in Chennai in November 2016.(PTI)
People wait outside an ATM to withdraw and deposit money in Chennai in November 2016.(PTI)
Updated on Dec 05, 2016 10:47 AM IST
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Hindustan Times | ByBhadra Sinha, New Delhi

The Supreme Court will on Monday take up petitions challenging the constitutional validity of demonetisation and the inconvenience caused to people by the government’s sudden decision.

A bench headed by Chief Justice of India TS Thakur had last week asked the government to file additional affidavit explaining ‘schemes and steps’ taken to ease the situation.

Read | SC says situation after demonetisation serious, fears riots

In its affidavit on December 1, the Centre had said scrapping of Rs 500 and Rs 1,000 bank notes did not violate citizens’ “fundamental rights,” as alleged, but imposed “reasonable restrictions” with a view to eradicate black money and counterfeit currency.

The Centre rebutted the challenge on the legal validity of the November 8 notification. It was not an act of deprivation but regulation, it clarified.

“In the present case, the public is not deprived from using the money or the value for the legal tender possessed by them. They can still use their money by use of cheques, e-transfer, etc. The government, however, in view of the changeover of the fake notes, has for a limited period, imposed certain reasonable restrictions in the form of limited withdrawal of money and or exchange thereof,” read the affidavit to be taken up by the CJI’s bench.

Earlier, the Centre had moved the apex court seeking transfer of all the petitions pending in various high courts to either the Supreme Court or one of the high courts.

It had contended that demonetisation was a ‘bold move’ aimed at eradicating black money circulating since Independence which cast a ‘parallel economy’ hitting the poor and the middle class.

The Centre has also defended its decision to introduce Rs 2,000 currency notes, saying it was done keeping in view “the erosion of purchase value of money due to rising inflation”.

There was nothing illegal in the printing of the high denomination note, it said.

The Centre rejected arguments that the government has no power to demonetize as the authority is vested only with the RBI, which, it said, is under its management and control.

The RBI Act states all currency belongs to the Union government and the central bank has the right to issue bank notes that are, at any time, considered to be legal tender in circulation, it said.

Also read | Why govt’s demonetisation move may fail to win the war against black money

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Wednesday, December 08, 2021