Lagatar24 Desk
New Delhi, Jan 2: A five-judge bench of the Supreme Court on Monday dismissed petitions challenging the Central government’s 2016 decision to demonetize currency notes of Rs 1,000 and Rs 500.
Judges S. Abdul Nazeer, B.R. Gavai, A.S. Bopanna, V. Ramasubramanian, and B.V. Nagarathna made up a Constitution Bench that decided a number of cases that contested the central government’s 2016 demonetisation.
“It has been held that there has to be a great deal of restraint before interfering in matters of economic significance…we cannot supplant such views with the judicial one,” Justice Gavai said delivering the majority opinion.
“There was consultation between the Centre and the RBI for a period of 6 months. We hold that there was a reasonable nexus to bring such a measure, and we hold that demonetisation was not hit by the doctrine of proportionality,” he added.
“Thus, power available to the Centre cannot be mean that it is in relation to only a specific series of bank notes. It is for all series of bank notes…There is no excessive delegation as under Section 26(2) of the RBI Act and thus cannot be struck down. Notification is valid and satisfies the test of proportionality. period for the exchange of notes cannot be said to be unreasonable,” Justice Gavai concluded that the RBI has no independent power to bring in demonetisation.
Justice Nagarathna, however, differed on the answers to each of the questions.
“I have noted that RBI is the bulwark of the Indian economy. I have cited the history of such demonetisation exercise the world over. Court is not to sit over merit of economic or financial decision…examining Section 26(2) would not mean to sit over the merits of demonetisation and thus it is well within the lakshman rekha as drawn by this Court.”
On the last day of the hearing, the Court had requested some confidential documents related to the ruling from the Central government in a sealed cover.
