The Supreme Court on Tuesday noted that the government cannot deprive genuine persons of their hard-earned money and property and pointed out that the Centre cannot close all options for such persons and should open a window for them to approach the authorities and exchange their demonetised notes for new currency .
"It is harsh if you close all options of exchange for genuine persons who were unable to deposit their [demonetised] notes within the stipulated period," a Bench of Chief Justice of India J.S. Khehar and D.Y. Chandrachud told the Centre.
"If I am terminally ill and could not deposit my money. I should be given an opportunity now to approach you and establish my facts... You can't just deprive me of my money because I am terminally ill," Chief Justice Khehar addressed Solicitor General Ranjit Kumar.
"You are taking away my money because I am terminally ill? Citizens are facing problems and you are there to solve them. If not, serious problems will arise... and you provision is at risk," Chief Justice Khehar orally observed.
Mr. Kumar said the government has already filed an affidavit explaining why the period to deposit the demonetised notes was restricted.
"We saw many malpractices, large purchases of gold. More than 800 raids were conducted and 5100 notices were issued in cases of high value deposits. We found an unusual surge in purchases and money transfers through shell companies. We had to constantly review exemptions granted, like depositing the banned notes in petrol pumps, etc. We found that cash dealings worth ₹610 crore were made through these avenues," Mr. Kumar submitted.
The government can only issue notifications for a class of persons and cannot extend dates for individuals.
"But you should have opened a window for genuine persons to approach you... But you do not want to... we want to know why you want to debar genuine persons... why you want to deprive them of their property?" Chief Justice Khehar asked.
Mr. Kumar sought time to seek instructions on whether a mechanism can be introduced for individuals to approach the authorities to prove that theirs is a genuine case.
In the hearing in March last, the court asked the Centre to explain why it chose to leave the “people in the lurch” by closing all options for them to deposit demonetised notes beyond the cut-off date of December 30, 2016.
The court had indicated that Parliament had left it to the Centre’s discretion to offer a grace period for those who were genuinely unable to deposit their ₹1000 notes and old ₹500 currency by December 30.
The Specified Bank Notes (Cessation of Liabilities) Ordinance of 2016 allows Indian citizens abroad and “any other class of persons specified by the Central government” to deposit their old notes beyond the cut-off date of December 31, 2016.
However, the Centre restricted the grace period till March 31, 2017 only to Indian citizens who were abroad during the period between November 9 and December 30, 2016.
“If you see the Prime Minister’s speech on demonetisation on November 8, 2016, he talks clearly about extending the grace period till March 31, 2017. Then comes the RBI notification, which also talks clearly about extending the time. Both gave people hope that there shall be... there would be an extension. The ordinance promulgated also gives you discretion to widen the categories of people beyond those who were abroad... So why did you choose to close this window completely? You left the people in the lurch,” Chief Justice Khehar said.
