‘One can’t claim ownership of notes, they’re governed by conditions’

CITING THE reason for having a penalty provision in the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016, Minister of Law & Justice Ravi Shankar Prasad said that a currency note is a legal tender only upon specified terms and conditions, and that individuals cannot hold delegitimised currency notes, except for souvenir purposes.

“Currency is not your ownership, currency is something which is a legal tender upon specified terms and conditions. Therefore you cannot claim the right of ownership on that particular currency, they are governed by the terms and conditions,” Prasad told The Indian Express.

“It (the penalty provision) is designed to obliterate black money in the country. For example, dollar is not applicable in India, but you can keep dollar on specified terms and conditions. Will you say I will keep $10,000 in my home? You cannot,” he added.

As per the aforementioned ordinance, to prevent any continued parallel transactions with the notes that have been delegalised, holding, transferring and receiving the notes would attract a fine of Rs10,000 or five times the amount of the face value of the notes involved in the contravention, whichever is higher.

“Under section 26 (of the RBI Act), there is a legal obligation to pay by the RBI with guarantee by the government. In the previous demonetisation exercise, the ordinance came simultaneously. This time we're doing it relieving the (central) bank of its obligation to pay, and the guarantee of the government,” Prasad said.

“Till the evening banking closing hours of 30th of December, it is a valid tender, and thereafter, except for souvenir purposes, if you keep it, then you are subject to penalty. For specified group, and specified terms and conditions notified by the Reserve Bank, you can pay till 31st of March,” he said.