The South India Times
(Special Correspondent)
New Delhi: In a path-breaking judgment, the Supreme Court on Monday upheld the Narendra Modi government’s 2016 demonetization decision, causing considerable embarrassment to the entire Opposition, including the Congress.The Centre decided to ban Rs 500 and 1000 notes six years ago. As many as 58 petitions were filed against the government’s decision to suddenly withdraw the currency. Some of them contended that the government has not followed due procedures, while others demanded to reopen the fresh window for the exchange of these notes.
However, the majority view of the five-member Constitutional authored by Justice BR Gavai was agreed to by Justices S Abdul Nazeer, A S Bopanna, and V Ramasubramanian.In his ruling Justice Gavai made it clear that in the notification dated 8/11/2016 by which the decision was implemented does not suffer from any flaw and satisfies the proportionality test, the majority opined that from the record, as it appears that there was consultation between the RBI and the Centre for 6 months.
The majority also opined; “The action cannot be hit by the doctrine of proportionality. In the 1978 act, the period was only three days which was further extendable by five days. In the present case, the period provided (for the exchange of the demonetized notes) was 52 days and it cannot be said to be an unreasonable period.”
“The power available to the Centre under section 26(2) of the RBI Act cannot be restricted to mean that it can be exercised only for some series of notes and not for all series of notes. Merely because on two earlier occasions the demonetization exercise was by plenary legislation, it cannot be held that such power would not be available to the central government,” Justice Gavai, who read the majority judgment, said.
Justice BV Nagarathna in her dissenting view ruled that center’s action initiated by notification dated 8/11 was an exercise of power contrary to law and unlawful. “Power of Centre being vast can be exercised through a plenary legislation rather than by an executive action by the issuance of a notification,” she said.
Differing from the majority view, she also pointed out that demonetization of banknotes at the behest of the Central government is a far more serious issue affecting the economy and citizens. She further ruled that when a statute contemplates a specific procedure to be adhered to arrive at the desired end, such procedure cannot be substituted by an alternate procedure.Observing that the decision being the executive’s economic policy cannot be reversed, the bench said there has to be great restraint in matters of economic policy and the court cannot supplant the wisdom of the executive by a judicial review of its decision.
The plea before the top court had also challenged the validity of the notification dated November 8, 2016, issued under the Reserve Bank of India Act, 1934 on the ground that it was violative of Articles 14, 19, 21, and 300A of the Constitution of India. On December 16, 2016, a three-judge bench of the SC refused to grant interim relief against the decision of demonetization but had framed questions to be determined by a larger bench.
