Tuesday, April 16, 2024

Reserve Bank of India defends decision for withdrawal of Rs 2,000 notes from circulation before Delhi High Court

The Reserve Bank of India has defended its decision for the withdrawal of Rs 2,000 notes from circulation before the Delhi High Court stating that it was a currency management exercise and not demonetisation.

The submission was made before the Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad during the hearing of a public interest litigation challenging the decision of the central bank.

Senior Advocate Parag P Tripathi, while opposing the plea, suggested that the matter should be heard later as the judgment in a similar PIL related to the impugned decision was awaited.

The Counsel further said that this was an exercise of currency management and not demonetisation.

The Bench had earlier reserved judgment in the matter.

The lawyer representing the RBI, while noting that the decision was purely of economic policy nature, apprised the High Court said that another similar matter was listed for hearing on Monday.

He said most of what was being contended, would have been dealt with it there.

The PIL was filed by Advocate Rajneesh Bhaskar Gupta, conteding that RBI has no independent power under the Reserve Bank of India Act to take such decision.

The court after listening both parties, listed the matter on Monday and asked the parties to submit short note in the matter.

Besides arguing that the RBI has no independent power under the Reserve Bank of India Act to take such decision, the PIL also contends that the decision of withdrawal of the banknote only after 4-5 years of circulation within specific deadline is unjust, arbitrary and against the public policy.

Gupta submitted that the impugned circular does not mention that the Central government has taken the decision.

He added that the PIL submits that no other reason except ‘Clean Note Policy’ has been given by RBI to take such a “big arbitrary decision” of withdrawing the banknotes from circulation, “without analysing the expected problems of the public at large.

It added that as per the provision of clean note policy of RBI, damaged, counterfeit, or soiled banknote of any denomination were withdrawn from circulation and newly printed banknotes were circulated in the marked but it is not happening in the present case, only denomination of Rs.2000/- is being withdrawn within a specific date/deadline and no new similar banknote is given by the RBI in circulation.

Alleging that small vendors and shopkeepers have already stopped taking Rs 2,000 note, the PIL submits that RBI has not cleared so far that what is the benefit to the RBI or National Economy after withdrawing the denomination of Rs.2000 banknote from circulation.

However, the PIL adds, the hardship faced by the citizens is very well known as seen during demonetisation of Rs 500 and Rs 1000 notes in 2016.

The PIL talks about crores of rupees which have been spent from public exchequer on the printing of Rs 2000 which would now be discontinued.

“It is respectfully submitted that it could not be ruled out that RBI notification/Circular under challenge will be leading panicked citizens to line up at banks across the country in this hot weather of May/June/July which may cause loss of many life like the period of demonetization in the year 2016 when more than 100 citizens lost their life i’or wrong policy decision of demonetization of Rs. 1OOO and Rs.500 by the Centre Govt, and now the same thing is happening in the name of Clean Note Policy of RBI without any statutory power.

The plea was moved by BJP leader and Advocate Ashwini Kumar Upadhyay seeking to declare the notifications as arbitrary and against Article 14 of Constitution of India. The impugned notifications were published on May 19 and 20.


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