In the latest edition of India Legal show, news anchor Abhilasha talked to constitutional experts who discussed at length, the recent order of the setting up of a five-judge constitutional bench to test the validity of a November 8 demonetization notification and the legality of the government’s implementation of the notification.
The experts also discussed the nine questions which have been framed by the bench for the larger bench which will examine these questions on next hearing. The questions include whether the RBI notification and the limited withdrawal of one’s own money were violations of Articles 14 (right to equality), 19 (freedom of speech, trade, occupation, etc), 21(fundamental right to protection of life) and 300A (right to property) of the constitution.
Among the panelists were Senior Supreme Court advocate Bharat Bhushan Sahni, veteran journalist Parsa Venkateshwar Rao Jr, K Sreedhar Rao, former chief justice of the Gauhati High Court, judicial expert Rupinder Suri and economist and expert on black economy, professor Arun Kumar.
Speaking about the various questions that demonetization has raised, Parsa Venkateshwar Rao Jr said: “Every decision of the government falls under judicial review. This move has raised some important questions like whether it is a violation of the RBI Act, whether the right to life guaranteed under Article 21 has been violated or not, the restriction on district cooperative banks on exchange of notes is legal or not,” said Parsa Venkateshwar Rao Jr. He added that the apex court has the right to review financial actions and that cases pertaining to nationalization of banks in 1969 are still there with the Supreme Court.
Advocate Sahni pointed out three things in relation to demonetization. “We have to look at three aspects here: objective, mode and manner. The objective of the move is laudable. As far as the mode is concerned, it is government’s matter of policy to demonetize and court can’t investigate it and the manner in which the move is implemented has to be obeyed under a specific framework of the constitution,” Sahni said.
Sahni further added that all the work done by the government should be rational and under article 19, all kinds of freedom are given to the citizens and if need be, reasonable restrictions can be imposed on the rights.
Rupider Suri said that as far as the RBI Act under Section 26 goes, there is nothing illegal or in conflict with the Act.
Professor Arun Kumar said: “I believe that demonetization is not going to affect the black money and even if the move ends up as a success, it is not going to impact black money in a big way and the trade of printing fake currency notes will carry on.”
Sahni said that there is no particular law under which we can say that this money belongs to you but you can’t withdraw it and the larger bench will question this.
Speaking on whether demonetization was done without preparation, Suri said that things could have been planned better but the government must have thought that if it takes too much time, it’s not going to be a secret anymore. “But I do agree that agony and astonishment is there on the ground,” he noted.
To this, Arun Kumar replied that the government did not prepare for it and did not even have the understanding or knowledge about its proper implementation and execution. He added that the government had a political motive behind the move too. “They thought that they will take money from the rich and give it to the poor and thus a robin hood like image will be created before the upcoming elections since image correction at this point of time is very necessary for the government,” he said.
Justice K Sreedhar Rao admitted that fiscal policies are always decided by the Reserve Bank of India and it is the section 26(2) of the RBI Act which provides for RBI recommending the government to withdraw notes. “This action was taken in such a hurry that it has created a vacuum in the economy,” he added.
Rao also said that courts have very less to do with fiscal properties as they lack expertise on financial matters and it is clearly an exclusive domain of the RBI.
Parsa Venkateshwar Rao Jr said that the RBI is not functioning the way it should and that its relationship with the government was tensed. “The RBI must have given some suggestions for the effective implementation of demonetization but it seems like the government did not obey its suggestions,” he said.
Justice Rao further pointed out that the move could not be seen as total deprivation of property under Section 300A. “The restrictions on Right to Property is a kind of rationing and the legal question that rises is whether it is legal to impose a financial emergency without giving a prior warning or clue,” he added.
Advocate Sahni also pointed out that another big question is that whether the move is in public interest or not. Justice Rao lamented that the pain for common man due to demonetization has become irreversible.
In the concluding comments, Justice Rao said that demonetization has to take place with utmost secrecy and the manner in which it has been done can’t be questioned. Sahni added that the court will now decide whether it was a violation of the constitution or not.
—Compiled by Karan Kaushik