SC seeks affidavit from Center & RBI on demonetization, bench will investigate
Supreme Court of India has issued notice to the Center and RBI and has sought response on demonetization. The Constitution Bench will examine whether the issue is now academic only. The petitions challenge the Centre’s decision of November 2016.
The Constitution Bench comprising Justices S Abdul Nazeer, BR Gavai, AS Bopanna, V Ramasubramaniam and BV Nagarathna. The matter has come before the Constitutional Bench after six years. Center and RBI have sought time to file affidavits on demonetisation. The next hearing of the case will be held on November 9.
A constitution bench headed by Justice SA Nazeer had said on September 28 that it would consider whether the petitions were an academic exercise. The observation was made by a bench of Justices BR Gavai, AS Bopanna, V Ramasubramaniam and BV Nagarathna after hearing a batch of 58 petitions challenging the demonetisation of notes.
Court will examine the decision making process
Hearing the matter today, Justice Nazeer said he would look into the decision-making process behind the demonetisation exercise undertaken by the Narendra Modi government in 2016. The top court asked the Center and the Reserve Bank of India to file a detailed affidavit.
On November 8, 2016, Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 notes. One of the major objectives of this unprecedented decision was to promote digital payments and curb the flow of black money. The sudden decision of the central government to withdraw the two high denomination currencies led to long queues of people outside banks to enter/deposit the currency.
There was a long queue of people outside the ATM to withdraw cash. Several sectors of the economy, especially the unorganized sector, were affected by the government’s decision. After withdrawing the then prevalent Rs 500 and Rs 1,000 notes as part of the demonetisation exercise, government had introduced new Rs 2,000 notes as part of the re-monetisation. It also introduced a new series of Rs 500 notes. Later, a new denomination of Rs 200 was also added.