New Delhi: The Delhi high court on Friday said the move to demonetize Rs500 and Rs1,000 notes did not violate banking laws and the definition of banking contained therein.
The court dismissed a plea by Ashok Sharma, a businessman, who contended that the limit placed on over-the-counter withdrawals from banks was unconstitutional, arbitrary and contrary to Section 5(b) of the Banking Regulation Act, which says “banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or otherwise”.
“Even assuming that the restriction so imposed on cash withdrawal from a bank account has resulted in some inconvenience or prejudice to the petitioner, we are unable to hold that the same runs contrary to Section 5(b) of the Banking Regulation Act,” the court said in its order.
The two-judge bench comprising chief justice G. Rohini and justice V. Kameswar Rao also noted that as there was no restriction on non-cash method of accessing a person’s bank account, like “cheques, demand drafts, credit or debit cards, mobile wallets and electronic fund transfer mechanisms”, there was no infringement of the right of the petitioner to withdraw from his bank account on demand.
The high court did not deal with the issue of validity of the 8 November notification on demonetization of Rs500 and Rs1,000 notes. The Supreme Court is considering that issue.
The court had earlier dismissed the case on 25 November as the limits placed originally were reviewed the day before. However, the petitioner asked the high court to reconsider the matter.