“They (government) must adhere to Rs24,000 notification unless it is modified," a three-judge bench headed by Chief Justice T.S. Thakur observed after senior advocate Kapil Sibal, appearing for a petitioner who has challenged demonetisation move, said that people don’t have cash due to which they are facing hardships.
Sibal said that under the RBI notification, one is allowed to withdraw Rs24,000 per week and no one could be denied this right. “The attorney general is saying that they have a problem of currency and they don’t have enough cash. They should not have given this right if they don’t have the cash," he told the bench, also comprising justices A.M. Khanwilkar and D.Y. Chandrachud.
ALSO READ | Cash withdrawal limits to be eased after 80% remonetisation: Official
Sibal also said district cooperative central banks (DCCBs), which collected Rs8,000 crore in three days after the 8 November demonetisation notification came into effect, have been denied permission to exchange and deposit old currency notes due to which the business of these banks was suffering. Countering the submissions, attorney general Mukul Rohatgi said that old currency notes worth Rs8,000 crore collected by DCCBs across the country have been allowed to be deposited in the Reserve Bank of India (RBI).
“DCCBs have collected Rs8,000 crore in three days. We have allowed them to deposit this amount to the RBI subject to KYC norms and we will issue a notification in this regard within two days," Rohatgi said. To this, the bench asked, “They (DCCBs) want their business to continue. The other part is that why they have been discriminated upon as compared to other banks," The attorney general said DCCBs are not governed by the RBI rules and the problem in allowing them to deposit old notes was that “there may be unaccounted money and there was no way to find to out as to who has deposited it."
“People are depositing money in large number. You have to give them the currency. You are staggering the payment. What is the time frame in which you will do it. This is what we want to know from you. We understand your problem of shortage of currency but you ought to have some norms," the bench told Rohatgi.
When the bench asked the attorney general as to when the Rs8,000 crore, which DCCBs would deposit in RBI, would be returned to them, Rohatgi said he can’t give a fixed time frame for this as “it can’t be a uniform policy and it has to be seen on a day-to-day basis".
The bench, however, said, “Then it is unpredictable. You must have a policy. The ratio should be same for all banks." However, the Centre faced a barrage of searching questions from the bench which asked as to why old currency notes would not be accepted in government-run hospitals despite the fact that enough cash was not there in the market.
ALSO READ | Double check old notes deposit data, finance ministry tells RBI, banks
“In government hospitals, you should allow old notes when you have not been able to dispense enough cash to the public," the bench said. The attorney general cited the example of allowing old currency notes at the petrol pumps and said it had to be stopped as the relaxation was “misused" and the petrol pumps were taking money in low denomination notes but they were depositing it in Rs1,000 and Rs500 notes only.
“Rs 13 trillion have come so far. These are executive policy and courts can’t say what should be the exemptions," Rohatgi said. On the issue of why old currency notes were not accepted in government hospitals, he said that “legal tenders are also available in the market and there are other ways to make payments".
The attorney general also said that new currency notes of value of Rs5 trillion is in circulation in the market and besides this, Rs2.5 trillion in smaller denominations of Rs100 and Rs50 was already there. The bench, however, asked how large amount of money in new currency notes was being seized in raids by the authorities.
ALSO READ | Demonetisation updates: Here is what PM Narendra Modi has said so far
“How are some people getting crores in new currency? How is somebody able to get so much money?" the court said. To this, Rohatgi said some bank officials have been arrested for alleged swindling of money and continuous raids were being conducted for recovering unaccounted money. At the fag end of the hearing, he said that the apex court should also consider the issue that different high courts were taking up matters pertaining to demonetisation and sought a stay on it.
The bench, however, said it would consider all the aspects and would pass an appropriate order. The apex court is hearing a batch of petitions challenging the demonetisation move of the government. The Centre has also filed a plea seeking transfer of all the matters pending before separate high courts in the country to either the apex court or one of the high courts.