Lagatar24 Desk
New Delhi, Dec 6: The Reserve Bank of India and the Centre defended the Centre’s decision to demonetize the 500 and 1,000 rupee notes in front of the Supreme Court on Monday, stating that the proper protocol was followed.
Senior attorney Jaideep Gupta argued in favour of the Centre, Attorney General R Venkatramani, and the RBI before a five-judge constitution bench of the Supreme Court to defend the Centre’s decision to implement demonetisation.
The AG said that there were two primary reasons that Section 26 of the RBI Act cannot be considered excessive delegation as the Section 3 of the RBI Act transfers the complete powers of the RBI for taking over the management of currency to the central government and transfer of power is not the same as a delegation of power.
According to Jaideep Gupta, the method was followed, hence the process cannot be criticised on the grounds that the RBI and the Center broke the rules.
The Supreme Court brought up the petitioner’s contention throughout the hearing that RBI has supremacy over currency matters and that recommendations should have come from RBI rather than the central government.
AG retorted that Section 26 of a crucial monetary policy helps them both because RBI and the government worked in collaboration. According to the Center, Section 26(2) of the RBI Act cannot be read in isolation.
In a separate affidavit, the RBI, represented by Advocate-on-Record HS Parihar and Advocates Kuldeep Parihar and Ikshita Parihar, stated that the Central Board of the RBI met on November 8, 2016, in accordance with Section 26 of the RBI Act and the Reserve Bank of India General Regulations, 1949, and that following extensive discussion, the Board determined that the withdrawal would be in the best interest of the general public.
The central government was informed of the resolution’s passage on November 8, 2016, according to the RBI’s affidavit.
