Supreme Court reserves verdict on petition challenging demonetisation

Satya Prakash

New Delhi, December 7

The Supreme Court on Wednesday directed the Centre and the Reserve Bank of India (RBI) to furnish records relating to the November 8, 2016, decision to demonetise currency notes of Rs 1,000 and Rs 500 denomination.

“Learned counsels of the Union of India and Reserve Bank of India are directed to produce the relevant records,” a five-judge Constitution Bench led by Justice S Abdul Nazeer said while reserving its verdict.

Attorney General R Venkataramani told the Bench that he will submit relevant records in a sealed cover.

The Bench – which also included Justice BR Gavai, Justice AS Bopanna, Justice V Ramasubramanian, and Justice BV Nagarathna – heard arguments from the Attorney General for the Centre, senior counsel Jaideep Gupta for the RBI and senior advocates P Chidambaram, Shyam Divan and others for the 58 petitioners. It allowed the petitioners and the Government to file written submissions by December 10.

The Centre defended demonetisation, saying it was a major step to fight “the menace of fake currency notes, storage of unaccounted wealth, and financing of subversive activities”. In an affidavit filed in response to petitions challenging demonetisation, the Ministry of Finance said it was not a “standalone or isolated economic policy action”.

However, asserting its power of judicial review, the Supreme Court had on Tuesday said that it will not be a silent spectator and sit quietly with folded hands only because demonetisation was an economic policy decision.

“Just because it is an economic decision, does not mean we will fold our hands and sit. We can always examine the manner in which the decision was taken,” Justice Nagarathna had said after Gupta sought to emphasise that only a limited judicial review could be done on issues relating to economic policymaking.

Justice Nagarathna had also referred to the social and economic hardships and distress faced by the common people as a result of demonetisation.

“The proportionality principle should be applied only to the extent of testing whether a reasonable nexus existed between the stated objectives and the monetary policy of demonetisation,” Gupta had submitted.

Chidambaram had on Tuesday asked the Centre to come clean on the decision-making process. “They have not claimed any privilege. Then, let them place the documents to be viewed by this court. Without these documents and in the absence of material therein, it cannot be decided whether the decision-making process was flawed,” Chidambaram told the Bench.

Terming the Centre’s November 8, 2016, decision to demonetise currency notes of denomination of Rs 500 and Rs 1,000 as “deeply flawed”, Chidambaram had earlier urged the Supreme Court to declare it unconstitutional.