The Supreme Court will deliver on Monday the verdict on a batch of petitions challenging the government’s November 2016 decision to demonetise Rs 500 and Rs 1,000 currency notes. According to the apex court cause-list — the list of business of the court, there will be two judgments, one by Justice B R Gavai and another by Justice B V Nagarathna. It remains to be seen whether these are concurring or dissenting views.
Fifty-eight petitions were filed in the Supreme Court challenging the notes ban, arguing that it was not a considered decision of the government and should be struck down by the court.
The government has argued that the court cannot decide a matter when no tangible relief can be granted. It would be like “putting the clock back” or “unscrambling a scrambled egg”, the centre said.
A five-judge Constitution bench headed by Justice SA Nazeer heard the arguments before its winter break and on December 7, suspended the verdict. The other members of the bench are Justices BR Gavai, BV Nagarathna, AS Bopanna and V Ramasubramanian. Justice BR Gavai and Justice BV Nagarathna have authored two separate judgments, it’s learnt.
While the government, in its affidavit, said that it was a “well-considered” decision and the consultation process with the RBI had begun in February 2016, the central bank, too, said that due process was followed and it was the one that recommended the demonetisation.
Senior Advocate P Chidambaram on Thursday termed the decision-making process leading to the Centre’s 2016 move to demonetise currency notes of Rs 500 and Rs 1,000 as “deeply flawed”. He told a five-judge Constitution bench of the Supreme Court, presided by Justice S Abdul Nazeer, which is hearing a clutch of petitions challenging demonetisation, that the process could have started only from the RBI.
Chidambaram referred to the Preamble of the Reserve Bank of India Act, 1934, which said the right to regulate the issue of banknotes is entirely with RBI. It also generally operates the currency and the credit system. “That is why anything to do with currency must have emanated from the Reserve Bank of India,” he argued. He said the government could have exercised the power to demonetise only on RBI’s recommendation.
When the bank’s counsel argued that judicial review cannot apply to economic policy decisions, the court said the judiciary cannot fold its hands and sit just because it is an economic policy decision.The RBI admitted that there were “temporary hardships” which are part of the nation-building process. The problems were solved by a mechanism, it said in its submission.
The opposition alleges that the demonetisation was a failure of the government, destroying businesses and ending jobs. Congress chief Mallikarjun Kharge said, “Six years after the ‘masterstroke’ the cash available in public is 72 per cent higher than that in 2016. PM (Narendra Modi) is yet to acknowledge this epic failure that led to fall of economy.”