The High Court of Delhi on Monday rejected a public interest litigation that challenged the Reserve Bank of India (RBI)’s decision to withdraw bank notes in the denomination of Rs 2,000 from circulation.
The order was passed by the Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad on the plea filed by Advocate Rajneesh Bhaskar Gupta.
Earlier on May 29, the High Court had dismissed a similar PIL, which challenged the notifications issued by the Reserve Bank of India and the State Bank of India, allowing exchange of banknotes in the denomination of Rs 2000 without the requirement of any identity proof.
The orders were passed by the Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad on a petition moved by Advocate and Bharatiya Janata Party leader Ashwini Kumar Upadhyay.
The PIL had challenged the notifications on the grounds that allowing the deposit of banknotes in the denomination of Rs 2000 without any demand slip and identity proof was arbitrary, irrational and in violation of Article 14 of the Constitution.
It further sought directions from the High Court to both RBI and SBI that banknotes of Rs 2,000 be deposited in respective bank accounts instead of any other bank account, so that people with black money and disproportionate assets could be identified.
The plea requested declaration of notifications published on May 19 and 20, as arbitrary and against Article 14 of the Constitution. .
Representing RBI, Senior Advocate Parag P. Tripathi opposed the petition and said the same must be dismissed with exemplary costs.
The Senior Counsel contended that this was not demonetisation. He said it was a statutory exercise, adding that none of the points raised by Upadhyay in any manner impinged upon the public issues.
Tripathi further referred to various judgments of the Apex Court, wherein it has been held that the courts will not be persuaded to interfere in matters concerning economic policy. He relied on cases – RK Garg vs Union of India and Small Scale Manufacturers Association vs Union of India.
Additional Solicitor General (ASG) Chetan Sharma appeared for the Central government. Respondents in the case include the Ministry of Home Affairs, the Union Ministry of Finance, RBI and the SBI.
The petitioner, however, contended that he had not challenged the notification as a whole, only as far as it allowed the exchange of currency without any proof of identity.
The petition further sought directions to the Union of India to take appropriate steps against black money and disproportionate assets holders, in order to eliminate corruption and benami transactions, apart from securing the fundamental rights of the citizens.
On May 19, the central bank had announced withdrawal of banknotes in the denomination of Rs 2,000, saying that though it will remain a legal tender, but people were advised to deposit or exchange the same at bank branches or designated RBI offices till September 30.
As per the banker’s bank, individuals had the option to exchange Rs 2,000 banknotes for other denominations up to a limit of Rs 20,000 at a time at any bank, beginning May 23. However on May 20, a day after the announcement, the Central government clarified that there was no daily limit on the number of times to exchange notes.
RBI Governor Shaktikanta Das said on May 22 that banknotes in the denomination of Rs 2,000 were introduced with the primary purpose of quickly replenishing the value of money that was being taken out of the system via demonetisation.
As that purpose has been fulfilled and there were enough notes of other denomination now, the decision was taken to withdraw these notes, he said. As per Das, the printing of these notes had been stopped. He said people should see this particular exercise as part of RBI’s currency management operation.
Earlier on May 26, the Reserve Bank of India had defended its decision before the same Bench, stating that it was a currency management exercise and could not be termed as demonetisation.
Appearing for RBI, Senior Advocate Parag P Tripathi had contended that the decision was purely of economic policy nature.
Tripathi had apprised the High Court that a similar matter was listed for hearing on Monday and requested the Bench to list the plea filed by Advocate Rajneesh Bhaskar Gupta for hearing with Upadhyay’s petition. He said most of what was being argued here, would be dealt with there.
Moved by Advocate Rajneesh Bhaskar Gupta, the petition contended that RBI has no independent power under the Reserve Bank of India Act to take such a decision.
It said the decision to withdraw the banknote in the denomination of Rs 2000 only after 4-5 years of circulation within a specific deadline was unjust, arbitrary and against public policy.
Gupta submitted that the impugned circular did not mention that the Central government has taken the decision.
He pointed out that no other reason except ‘Clean Note Policy’ was given by RBI to take such a ‘big’ and ‘arbitrary’ decision of withdrawing the banknotes in the denomination of Rs 2000 from circulation, without ‘analysing’ the expected problems of the public at large.
The petition submitted that as per the provision of clean note policy of RBI, damaged, counterfeit or soiled banknote of any denomination were withdrawn from circulation and newly printed banknotes were circulated in the market, however, it was not happening in the present case, wherein banknotes in the denomination of Rs 2000 were being withdrawn within a specific deadline and no new banknotes of the denomination were being printed by RBI.
Alleging that small vendors and shopkeepers have already stopped taking the banknot of Rs 2,000, the PIL submitted that RBI has not cleared so far as to what was the benefit to the Central Bank or to the National Economy after withdrawing the Rs.2000 banknotes from circulation.
However, the hardship faced by the citizens was very well known, as had happened after November 8, 2016, when the central government announced at 8 pm that banknotes in the denomination of Rs 500 and Rs 1000 would no longer be legal tender.
The petition further mentioned the loss caused to the public exchequer as crores of rupees were spent on the printing of Rs 2000 banknotes, which would now be discontinued.
Gupta further alleged in the plea that the RBI Circular would create troubles for the common man as the panicked citizens would line up at banks across the country in this hot weather of May/June/July, which may lead to loss of many lives, similar to what happened after demonetisation, when more than 100 citizens lost their lives due to the Union of India’s policy decision.
The post Delhi High Court dismisses plea challenging withdrawal of Rs 2000 notes from circulation appeared first on India Legal.
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