The Supreme Court on January 2, 2023, upheld the Centre’s decision to demonetise currency notes of Rs 500 and Rs 1000 denominations in 2016. Being the Executive’s economic policy, the note ban move cannot be reversed, the top court held.
Dismissing a batch of petitions challenging the decision saying, the Supreme Court bench, headed by Justice S A Nazeer, said that since there was consultation between the Centre and the RBI before demonetization, the decision could not have been flawed. Demonetisation was not hit by the doctrine of proportionality, it added.
“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,” the SC said, adding the decision-making process cannot be faulted merely because the proposal emanated from the Central government.
The top court has heard a batch of 58 petitions, challenging demonetization announced by the Centre on November 8, 2016.
In a 5-judge Bench, 4 judges voted in favour of upholding the note ban while one dissented.
“Parliament should have discussed the law on demonetisation, the process should not have been done through a gazette notification. Parliament cannot be left aloof on an issue of such critical importance for the country,” said Justice BV Nagarathna, who differed from the majority judgment. The bench also comprised justices B R Gavai, A S Bopanna and V Ramasubramanian.
Appearing for the petitioner, senior counsel P Chidambaram argued that the recommendation for demonetization should have come from the RBI. But, the government advised the RBI, which later made the recommendation.
An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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