The Supreme Court on Wednesday directed the Centre and the Reserve Bank of India (RBI) to make their submissions till Saturday related to the Union government’s 2016 decision to demonetise currency notes of Rs 1,000 and Rs 500.
The apex court reserved its verdict on a batch of 58 petitions challenging the demonetisation on November 8, 2016.
The five-judge constitution bench of Justices S A Nazeer, B R Gavai, A S Bopanna, V Ramasubramanian, and B V Nagarathna heard the submissions made by RBI counsel Attorney General (AG) R Venkataramani and the petitioners, who were represented by Senior Advocates P Chidambaram and Shyam Divan.
“Heard. Judgment reserved. Learned counsels of the Union of India and Reserve Bank of India are directed to produce the relevant records,” the court said.
Attorney General R Venkataramani, appearing for the Union Government, submitted before the bench that he will submit relevant records in a sealed cover.
Senior Advocate Shyam Divan, appearing for one of the petitioners, said on Wednesday that a recommendation of the Central Board of the RBI was a requirement for the Centre’s decision for demonetisation.
He said the Union government was ‘duty-bound’ to honour the promise written in banknotes of paying bearers a sum.
He also pointed out that while the RBI had relaxed the deadline to exchange notes for NRIs who had taken their money abroad, it had not done so for those who had kept the notes in India.
Senior Advocate Jaideep Gupta, appearing for the RBI, argued that if every individual were to make specific demands, the deadlines would have been meaningless.
Attorney General Venkataramani had in the earlier hearing stressed that the distinctions made for grace periods for different categories were not arbitrary.
The bench earlier said it will not sit with ‘folded hands’ just because it was an economic policy decision and that it will examine how the decision was taken.
When the matter was taken up in the beginning, the court had said the issue was ‘academic’ as it had been six years since its decision. However, on October 12, the bench agreed to hear the matter after Senior Advocate P Chidambaram pointed out that though the effects of the decision cannot be undone, the court should decide so that ‘similar misadventures’ are not repeated by the future governments.
The Attorney General said demonetisation’s success or failure in curbing black money cannot be a reason to invalidate the decision judicially as the decision was taken in good faith and after following due process. He also said the decision was taken in consultation with the RBI which was later affirmed by the Parliament.
The RBI had backed the Union Government’s decision based on its recommendations.