PIL in HC against cap on withdrawal of pre-nov 8 deposits
‘Clause 2 (vi) of notification intended for cash deposits tendered from Nov 9 to Dec 30, 2016’
NEW DELHI: A businessman on Tuesday moved Delhi High Court seeking direction to the government to remove the cap on withdrawal of money deposited in banks before the November 8 decision to demonetise Rs 500 and Rs 1,000 currency notes.
The plea for urgent listing was mentioned before a bench of Justices B D Ahmed and Jayant Nath, which allowed the matter to be listed for hearing before the appropriate bench on Wednesday.
The petitioner, a resident of Delhi, urged the court to quash the notification which also imposes conditions on withdrawal of money from bank accounts, besides banning the use of Rs 500 and Rs 1,000 notes from November 9 onwards.
“A bare reading of the notification shows that clause 2 (vi) was intended for cash deposits which were to be tendered for the period November 9, 2016, to December 30, 2016. This clause as well as the notification has no connection with the bank deposits which were made prior to November 8, 2016,” the plea by Ashok Sharma said.
The petitioner while seeking direction to the Ministry of Finance and Reserve Bank of India (RBI), said that “on account of the notification, there is no normal banking transaction available, so he is unable to carry out his business and consequently clause 2(vi) of the notification has affected his right to livelihood”.
Under the older clause 2(vi) of the notification, the weekly withdrawal limit from the banks was Rs 20,000, while the daily limit was of Rs 10,000.
Thereafter, the weekly limit was increased to Rs 24,000 and the daily limit scrapped.
While seeking to declare clause 2(vi) of the notification as illegal, the plea stated that under Banking Regulation Act, deposits with banks are “payable on demand” and under no set of circumstances could the government have imposed such conditions on normal banking transactions (bank deposits) which were with the bank on November 8.
The plea, filed through advocate A Maitri, alleged that the government’s action was “arbitrary and unconstitutional” as on one hand it cancelled the currency notes, on the other it simultaneously banned normal banking.
The plea said that the money, which is lying with the banks prior to demonetisation, has no connection with the legal tender of bank notes of Rs 500 and Rs 1,000.
Therefore, the government should restrain itself from interfering into the normal banking transactions, it said.
The petitioner claimed that the government’s decision is not applicable to bank deposits prior to November 8 and “its enforcement is unconstitutional as the same is against the mandate of section 26 of the RBI Act”.
“Section 26 of the Act never empowered the government to immobilise banking transactions and at the most the government could have imposed conditions on the cash deposits which were to be made post demonetisation,” the plea said. The Reserve Bank of India asked banks to ensure adequate cash supply to cooperative banks and Regional Rural Banks (RRBS) so that farmers can have enough valid notes needed for purchase of seeds, fertiliser and other inputs during the ongoing rabi season.
The decision comes a day after Finance Minister Arun Jaitley had a meeting with RBI, Nabard and all bankers and impressed upon them to make available funds to the cooperative sector as it is an important financing mechanism for rural India. According to RBI, it is imperative that farmers are adequately supported financially to ensure unhindered farming operations. “It is estimated that about Rs 35,000 crore would be required by DCCBS for sanction and disbursement of crop loans to farmers at the rate of Rs 10,000 crore per week,” an RBI notification said.