’Demonetisation decision-making process not flawed,’ SC’s key observations on note ban
- The court said the notification dated November 8, 2016, which announced the decision to scrap the high-value currency notes, cannot be said to be unreasonable and struck down on the ground of decision-making process.
The Supreme Court in a 4:1 majority verdict on Monday upheld the government's 2016 decision to demonetise the ₹1,000 and ₹500 denomination notes, saying the decision-making process was not flawed.
The court said the notification dated November 8, 2016, which announced the decision to scrap the high-value currency notes, cannot be said to be unreasonable and struck down on the ground of decision-making process.
A five-judge Constitution bench headed by Justice S A Nazeer, who will retire on January 4, pronounced its verdict on the matter. The top court's judgment came on a batch of 58 petitions challenging the demonetisation exercise announced by the Centre on November 8, 2016.
Supreme Court holds that the power under Section 26(2) of RBI Act can be used to demonetise whole series of bank notes and not any particular series. "Any" cannot be given restrictive meaning
Here are the top quotes by the judges of Supreme Court:
Supreme Court says there was consultation between the Centre and the RBI before demonetisation. There was a reasonable nexus to bring such a measure, and we hold that demonetisation was not hit by doctrine of proportionality.
SC said demonetisation cannot be struck down as unconstitutional on the ground of excessive delegation. Court says there are inbuilt safeguards.
Decision making process cannot be faulted merely because the proposal emanated from the Central Govt. Justice Gavai said.
“It is not relevant whether the objective was achieved or not,” he said.
“The period prescribed of 52 days cannot be said to be unreasonable."
Justice Nagarathna only differed from the majority judgment on the point of the Centre's powers under section 26(2) of the RBI Act. In her minority verdict, she held demonetisation of ₹500 and ₹1,000 currency notes vitiated, unlawful.
"On looking at the records submitted by RBI, there are words "as desired by the Central Govt"...this demonstrates there was no independent application by the RBI. The entire exercise was carried out in 24 hours, she said.
Justice B V Nagarathna of SC says scrapping of ₹500, ₹1,000 series notes had to be done through legislation, not through notification.
No independent application of mind by RBI, only opinion sought which cannot be said to be recommendation, she said.
Parliament should have discussed law on demonetisation, process should not have been done through gazette notification, she added.
Catch all the Business News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business NewsNewsIndia’Demonetisation decision-making process not flawed,’ SC’s key observations on note ban
First Published:2 Jan 2023, 12:40 PM IST
- Top Gainers
- Top Losers
- 52 Week High