The High Court of Delhi on Monday rejected a public interest litigation that challenged the Reserve Bank of India (RBI)’s decision to withdraw bank notes in the denomination of Rs 2,000 from circulation.
The order was passed by the Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad on a plea filed by Advocate Rajneesh Bhaskar Gupta.
Noting that RBI had no independent power under the RBI Act to discontinue the bank notes in the denomination of Rs 2000, the plea said the power to discontinue any bank note was only vested with the Central government and that there was nothing to show that the Union of India had passed any such order.
Earlier on May 29, the High Court had dismissed a similar PIL filed by Advocate Ashwini Kumar Upadhyay, which challenged the notifications issued by the Reserve Bank of India and the State Bank of India, allowing exchange of banknotes in the denomination of Rs 2000 without the requirement of any identity proof.
The Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad had observed that the bank notes in the denomination of Rs 2,000 had served their purpose and that the decision to withdraw the same was a policy matter, which should not be interfered with by the courts.
It further noted that the decision of the Government could not be termed as perverse or arbitrary. It cannot be said that the Union of India took the decision to encourage black money, money laundering or profiteering, or to abet corruption, added the High Court.
Filed by Advocate and BJP leader Upadhyay, the plea had challenged the notifications on the grounds that allowing the deposit of banknotes in the denomination of Rs 2000 without any demand slip and identity proof was arbitrary, irrational and in violation of Article 14 of the Constitution.
It further sought directions from the High Court to both RBI and SBI that bank notes in the denomination of Rs 2,000 be deposited in respective bank accounts instead of any other bank account, so that people with black money and disproportionate assets could be identified.
The plea requested declaration of notifications published on May 19 and 20, as arbitrary and against Article 14 of the Constitution.
Upadhyay had submitted before the High Court that he had not challenged the notification as a whole, only as far as it allowed the exchange of currency without any proof of identity.
The petition further sought directions to the Union of India to take appropriate steps against black money and disproportionate assets holders, in order to eliminate corruption and benami transactions, apart from securing the fundamental rights of the citizens.
The BJP leader had then moved the Supreme Court with his plea, which is presently pending before the Apex Court. The top court of the country had refused to urgently list the matter in June.
On May 19, the central bank had announced withdrawal of banknotes in the denomination of Rs 2,000, saying that though it will remain a legal tender, people were advised to deposit or exchange the same at bank branches or designated RBI offices till September 30.
As per the banker’s bank, individuals had the option to exchange Rs 2,000 banknotes for other denominations up to a limit of Rs 20,000 at a time at any bank, beginning May 23. However on May 20, a day after the announcement, the Central government clarified that there was no daily limit on the number of times to exchange notes.
RBI Governor Shaktikanta Das said on May 22 that banknotes in the denomination of Rs 2,000 were introduced with the primary purpose of quickly replenishing the value of money that was being taken out of the system via demonetisation.
As that purpose has been fulfilled and there were enough notes of other denomination now, the decision was taken to withdraw these notes, he said. As per Das, the printing of these notes had been stopped. He said people should see this particular exercise as part of RBI’s currency management operation.
Earlier on May 26, the Reserve Bank of India had defended its decision before the same Bench, stating that it was a currency management exercise and could not be termed as demonetisation.
Appearing for RBI, Senior Advocate Parag P Tripathi had contended that the decision was purely of economic policy nature.