Top court seeks RBI, govt files on note ban decision
NEW DELHI: The Supreme Court on Wednesday reserved its verdict on the Union government’s move in November 2016 to outlaw currency notes of ₹500 and ₹1,000, and directed the ministry of finance and the Reserve Bank of India to produce the relevant files leading to the decision. Concluding hearing on whether the government followed due procedure provided under the RBI Act before undertaking a massive exercise to withdraw over 86% of the currency from circulation on November 8, 2016, a five-judge bench headed by justice S Abdul Nazeer said: “Counsel for Union of India and Reserve Bank of India are directed to produce the relevant records. Judgment reserved.” RBI permitted the exchange of outlawed currency notes till December 30, 2016, and the next day an Ordinance was introduced that barred them as legal tender, while making the possession and use of the old notes a punishable offence after a limited exchange period.
The court’s decision to call for records came at the fag end of five-day marathon hearing despite demands made in this regard by petitioners led by senior advocate and former finance minister P Chidambaram.
“If you (Centre) have the records, pass it on for the perusal of the court. If it is readily available, give it now or you may give it later in the day,” said the bench, also comprising justices BR Gavai, AS Bopanna, V Ramasubramanian and BV Nagarathna.
Attorney General R Venkatramani, who appeared for the Centre, had on an earlier occasion indicated that the government had nothing to hide. On Wednesday he reasoned that much of what is contained in the records was captured by the affidavits of the Centre and RBI. “Our affidavit captures what is said here (in the files) to a large extent,” AG said. However, the bench in reply stated, “It (the submission of the files) is for our satisfaction”. On Tuesday, Chidambaram made a case for the government to disclose the documents, saying that nowhere in the arguments did the Centre or RBI claim privilege over the files. “I am not asking that they show us. But the court can certainly look into it and satisfy if the proportionality of the enormity of this decision was considered. Without that it is the blind leading the blind. According to me, decision making was completely flawed,” he said.
The government undertook demonetisation under Section 26 (2) of the Reserve Bank of India (RBI) Act, 1934 after a recommendation from the central board of RBI.
The provision empowers the government to declare that “any series of bank notes of any denomination shall cease to be legal tender”.