The Supreme Court is hearing several petitions challenging the demonetisation decision of the Modi government. Senior advocate P. Chidambaram termed the decision as ‘seriously flawed’ and said that the Center itself cannot initiate any resolution related to currency notes. This can happen only on the recommendation of the Central Board.
New Delhi: Describing the decision to demonetise Rs 500 and Rs 1,000 notes as ‘seriously flawed’, senior advocate P. Chidambaram told the Supreme Court on Thursday that the central government cannot itself make any proposal related to legal tender.
He further said that this can be done only on the recommendation of the Central Board of the Reserve Bank of India (RBI).
Chidambaram, one of the petitioners opposing the Centre’s 2016 decision, argued before a five-judge constitution bench headed by Justice SA Nazeer that the right to regulate the issue of bank notes rests solely with the Reserve Bank of India.
He said, ‘The central government cannot initiate any proposal related to currency notes on its own. This can happen only on the recommendation of the Central Board. This decision making process should be cancelled.
Chidambaram told the bench, ‘This is the most outrageous decision-making process which makes a mockery of the rule of law. This process should be scrapped as it is seriously flawed.
The constitution bench also included Justice BR Gavai, Justice AS Bopanna, Justice V. Ramasubramaniam and Justice BV Nagaratna.
Chidambaram alleged that the potentially dire consequences of demonetisation were not assessed, researched or documented.
He said, ‘More than 2,300 crore currency notes were demonetised, while the government’s presses could print only 300 crore notes per month. Thus this imbalance meant that it would take several months to print the notes.
Referring to the notification issued by the government on November 8, 2016, the former Union finance minister said that the three objectives that were aimed to be achieved through demonetisation were to control fake currency, black money and terrorism.
Chidambaram said, ‘None of these objectives could be achieved. The annual report of the RBI for the year 2016-17 states that fake currency worth only Rs 43 crore was detected in currency exchange of about Rs 15.31 lakh crore. Counterfeit currency has been 0.0028 per cent compared to the returned and exchanged currency, then how has this objective been achieved?’
Chidambaram said that it is known to all that drugs are being traded on a large scale despite demonetisation and even ministers have said that Punjab is becoming a conduit for drug smuggling.
He said, ‘It is also common knowledge that terrorism has not ended. Only last week there was an international conference on terrorism and the Home Minister said that we should set up a separate agency to deal with the financing of terrorism.
Justice Nazeer said, ‘What can be done now? It is over now. We will consider the first point.
Chidambaram replied that if the apex court held that the demonetisation process was flawed, it would be well and good and the government would not indulge in such ‘adventure’ in future.
It may be noted that the Center had recently told the top court in an affidavit that the demonetisation exercise was a well thought out decision and part of a larger strategy to tackle the menace of fake money, terrorism financing, black money and tax evasion.
Defending its decision to demonetise Rs 500 and Rs 1,000 denomination notes, the Center had told the top court that the move was taken after extensive consultations with the Reserve Bank of India and advance preparations were made before the demonetisation was implemented. Was.
In the affidavit, the central government had said that the decision of demonetisation was taken on the special recommendation of the Central Board of Directors of the Reserve Bank and the RBI had also proposed a draft plan for its implementation.
It was said in the affidavit, ‘RBI had also proposed a draft plan for the implementation of the recommendation. The recommendation and the draft scheme were duly considered by the Central Government and based on that, notification was published in the Gazette of India announcing that the specified bank notes would be abolished as legal tender.’
The hearing of the case will continue next week. The court was hearing at least 58 petitions against the central government’s decision of demonetisation.
Significantly, on December 16, 2016, a bench headed by the then Chief Justice TS Thakur had referred the legality of the decision of the central government and other related matters to a larger bench of five judges for an official decision.
The petitioners opposing the government’s decision have been saying that it involves issues of constitutional importance. They have argued that the question is still very much alive whether the government can invoke the Reserve Bank of India Act, 1934 to demonetise the entire currency of a particular class and if the answer is no then the government can do it in future. I can also repeat.
At the same time, the court has already said that it will examine the process adopted and the manner in which demonetisation was implemented.
On October 12, the bench had said, “The wisdom of the government is one aspect of the matter, and we know where the Lakshman Rekha is.” But the manner in which it has been done and the process followed can be scrutinised. For this we need to have a hearing…’
(With inputs from news agency Bhasha)
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