New Delhi, 02 January: The Constitution Bench of the Supreme Court dismissed the petitions filed against the demonetisation in 2016 by a majority of 4-1. Four judges upheld the demonetisation decision while Justice BV Nagaratna upheld it as wrong.
The court had reserved the decision after hearing the arguments of all the parties on December 7. Justice S Abdul Nazeer, Justice BR Gavai, Justice AS Bopanna and Justice V Ramasubramaniam were among the judges who upheld the demonetisation process.
The four judges said in their judgment that it was an economic policy of the executive which could not be reversed. There was no lapse in the process of taking the decision of demonetisation, that is why that notification cannot be cancelled.
The majority decision of the Supreme Court has said that 52 weeks was sufficient time to exchange old notes, which cannot be extended now. The court said that in 1978, three days were given for demonetisation, which was further extended for five days.
Justice Nagaratna said that at the behest of the Central Government, the withdrawal of notes of all series from circulation is a very serious matter. The decision of demonetisation should have been made through a bill and not through a notification by the central government, such important decisions should have been placed before the Parliament.
Justice Nagaratna said in his decision that it is clear from the records given by the Reserve Bank that no decision was taken autonomously by the Reserve Bank, he said that everything happened as per the wish of the central government. The decision of demonetisation was taken in just 24 hours, he added, the advice given by the Reserve Bank on the proposal of the Central Government cannot be considered as a recommendation given according to the law.
According to the powers given to RBI in law, all series of any currency cannot be banned, because under section 26(2) any series does not mean all series, he said that the central government’s decision of demonetisation on November 08 was illegal.
During the hearing of the matter, senior advocate P Chidambaram, appearing for the petitioners, had submitted that neither the Central Board of RBI nor the union Cabinet was aware of the consequences of demonetisation. Chidambaram had said that the government did not think anything about old and new notes before taking this decision, no data collected.
He raised the question whether the decision of demonetisation can be taken within 24 hours. Chidambaram had said that after demonetisation most of the notes were returned, the process adopted for demonetisation is a legal violation.
On behalf of the Central Government, Attorney General R Venkataramani had said that even before 2016, demonetisation was done twice in the country. The first demonetisation took place in 1946 and the second demonetisation took place in 1978. Grace period can be given as per section 4 of the notification.
The Attorney General had said that the contention of the petitioners that demonetisation had insulted the NRIs was baseless. After the notification of demonetisation was issued, the Parliament discussed it, the Parliament also approved it after a full discussion.
