2016 Demonitisation Is Valid: Supreme Court

Supreme Court on Monday affrimed the central government's 2016 decision of demonisation while dismissing all the petetions filed against it. 

A five-judge bench of the Supreme Court on Monday dismissed a petitions challenging the Central government's 2016 decision to demonetise currency notes of ₹1,000 and ₹500.

A Constitution Bench of Justices S Abdul Nazeer, BR Gavai, AS Bopanna, V Ramasubramanian and BV Nagarathna delivered the verdict on a batch of pleas challenging the Central government's 2016 demonetisation exercise.

SupremeCourt Constitution Bench in a 4:1 majority upheld the Centre's 2016 decision to demonetise Rs 1000 and Rs 500 notes observing that it was not unreasonable and the decision-making was not flawed. 

Justice B Nagarathana dissented in a separate judgment. 

Justice BV Nagarathna in her dissenting view held that demonetisation of the whole series of Rs 500 and Rs 1000 currency notes is a serious matter and it could not be done by the Centre by merely issuing a gazette notification. She said,

"Demonetisation of all series of notes at the instance of Central Govt is a far more serious issue than the demonetisation of particular series by the bank. So, it has to be done through legislation."

The judge further expressed that the RBI did not show independent application of mind and merely approved Centre's desire for demonetization. "On looking at the records submitted by RBI, there are words "as desired by the Central Govt"...this demonstrates there was no independent application by the RBI. The entire exercise was carried out in 24 hours."

She also differed from the majority judgment on the point of powers of Central Govt under Section 26(2) RBI Act.

(Inputs from LiveLaw)