“Centre had the power to demonetise all series of a banknote and the Nov. 8, 2016 note ban decision can’t be said to be unreasonable nor was it hit by the doctrine of proportionality.”
New Delhi: The Supreme Court (SC) this morning backed Prime Minister Narendra Modi’s 2016 note ban (demonetisation) decision in a majority judgement and said the decision could not be faulted just because the Centre initiated it. The Centre had the power to demonetise all series of a banknote, adding the Nov. 8, 2016 note ban decision can’t be said to be unreasonable nor was it hit by the doctrine of proportionality, the Apex Court said and added that the period of 52 days given for the exchange of notes was not unreasonable.
The Centre is required to take action after consultation with the Reserve Bank of India (RBI) and there was consultation between the two for six months, four Judges in the five-member Bench said. However, Justice B.V. Nagarathna gave a dissenting judgement, saying demonetisation could have been executed through an act of Parliament and not by the Government.
Some 58 petitions had challenged the Centre’s decision of November 2016 to ban Rs. 1,000 and Rs. 500 currency notes. Rs. 10 lakh crore was wiped out of circulation overnight because of the move. The petitions argued that it was not a considered decision of the Government and should be struck down by the Court.
The Government argued that the Court cannot decide a matter when no tangible relief can be granted. It would be like “putting the clock back” or “unscrambling a scrambled egg”, the Centre said. It also said demonetisation was a “well-considered” decision and part of a larger strategy to combat the menace of fake money, terror financing, black money and tax evasion.
The Five-Judge Constitution Bench headed by Justice S.A. Nazeer heard the arguments before its winter break. The other members of the Bench are Justices B.R. Gavai, A.S. Bopanna and V. Ramasubramanian.
While giving a dissenting judgment, Justice B.V. Nagarathna, however, said: “The measure was well-intentioned and well thought of. It targeted evils such as black money, terror funding and counterfeiting. The measure is declared unlawful purely on legal grounds and not on the basis of objects.”
“Demonetisation of all currency notes of Rs. 500 and Rs. 1000 is unlawful and vitiated. Parliament is a nation in miniature. Parliament’s views on demonetisation are critical and of utmost importance. However, having regard to the fact that the notification has been acted upon, this declaration of law will act only prospectively and will not affect actions already taken. Hence, no relief is being given in the petitions,” the Justice added.
This post was published on January 2, 2023 8:40 pm