The Supreme Court heard the batch of 58 pleas which challenged the decision of demonetisation by the Central government in 2016 that devalued ₹500 and ₹1,000 bank notes.
A five member Constitution Bench with Justice S Abdul Nazeer,Justice BR Gavai, Justice AS Bopanna, Justice V Ramasubramanian and Justice BV Nagarathna utilised the entire day hearing detailed arguments by Senior Advocate and former Union Minister P Chidambaram.
The senior leader argued the case and said that the power to demonetise is a special power that should only be exercised when the Reserve Bank of India recommends it.
He added that whenever there is something related to currency ,it should ideally be coming from RBI even when the power to demonetise rests with the Central Government it should be hand held by RBI. It was argued
To emphasise his point the lawyer added that Section 26(2) of the RBI Act does not permit declaring as no longer legal tender all series of notes of a specified denomination,”
Chidambaram also said that the provision, amounted to impermissible delegation of legislative power.
He added that if not read down, Section 26(2) would be unconstitutional and confer unguided power.
The Senior lawyer also said that decision-making process for demonetisation was deeply flawed as in this case the government was making a proposal to the RBI and it had to meekly obey the command and made a recommendation.
The lawyer touched another issue on how the Demonetisation resulted in job losses, and pain for citizens. He cited examples of people in hose in rural areas as well as North-East India who suffered the most as a result of these factors not being considered adequately.
P Chidambaram said to the Court that the reason for demonetisation is eliminating financing subversive activities such as drug trafficking and terrorism, and to stop circulation of black money but in this case none of these objectives were fulfilled by the exercise.
Another relevant point put forward by the senior advocate was that it imposed a disproportionate and intolerable burden on people, resulting in the loss of hundreds of lives and livelihoods.