The Supreme Court on Monday pronounce its judgment on a batch of petitions challenging the central government’s 2016 demonetisation move that debarred currency notes of Rs 1,000 and Rs 500 denominations. The top court upheld the Centre’s decision on demonetisation.
Justice B R Gavai said that the Centre’s decision-making process cannot be flawed as consultation was undertaken between the Reserve Bank of India (RBI) and the government.
Dismissing the batch of pleas challenging the demonetisation decision, SC upheld the Centre’s move saying that it was not relevant whether its objective was achieved or not. The Supreme Court said that the notification related to demonetisation, dated November 8, 2016 was valid and satisfied the test of proportionality.
A five-judge Constitution bench headed by Justice S A Nazeer pronounced the verdict as the top court reopened after its winter break. Other members of the bench included Justices B R Gavai, B V Nagarathna, A S Bopanna and V Ramasubramanian.
Earlier, the top court had heard the arguments of petitioners lawyers, senior advocates P Chidambaram and Shyam Divan, and RBI’s counsel Attorney General R Venkataramani. It had asked Centre and RBI to put the relevant records related to the 2016 decision on record.
The petitioners’ lawyers had called the decision of the currency note ban by the Centre deeply flawed. They had argued that any proposal related to legal tender can only be initiated by the government on the recommendation of the RBI’s central board and not on its own.
The RBI had admitted in its submissions that the demonetisation move resulted in “temporary hardships” and that those were also integral part of nation-building process. However, there had been a mechanism through which problems were solved when they arose.
The Centre had called its note ban exercise a “well-considered” decision in an affidavit to the SC. It had also said that the move was part of a larger strategy to tackle the menace of fake currency, black money and tax evasion and terror funding.
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(With inputs from PTI)
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