The Delhi High Court on Monday rejected a petition challenging the notifications that removed the need for requisition slip and identity proof for exchanging ₹2,000 banknotes, which are being pulled out of circulation.
A Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad said, “This decision of the government is purely a policy decision and courts should not sit as an appellate authority over the decision taken by the government.”
On May 19, the Reserve Bank of India (RBI) announced it will pull out the ₹2,000 denomination from circulation as part of a “currency management exercise”. It has given citizens time till September 30 to exchange these notes with those of other denominations. To avoid inconvenience to citizens, the central bank later notified that no identification will be necessary for this process.
On May 20, the State Bank of India (SBI), too, instructed its local head offices that the facility of exchange of ₹2,000 denomination banknotes to all members of the public up to a limit of ₹20,000 at a time will be allowed without obtaining any requisition slip.
In a public interest litigation filed last week in the HC, advocate and Bharatiya Janata Party member Ashwini Kumar Upadhyay sought a direction to ensure that people deposit ₹2,000 notes in their “respective bank accounts only, so that no one could deposit the money in others’ bank accounts”.
He submitted that a large amount of notes of this denomination has either reached in lockers of individuals or been “hoarded by separatists, terrorists, Maoists, drug smugglers, mining mafias and corrupt people”.
Responding to the plea, the RBI told the court that the withdrawal of ₹2,000 notes is a “statutory exercise” and the decision to enable their exchange was taken for “operational convenience”.
The HC order said, “It is well settled that [the] decision taken by the government in relation to the economic policies is not ordinarily interfere[d] with by the courts unless the decision of the government is manifestly arbitrary.”
It noted that the decision to withdraw the ₹2,000 notes from circulation was taken as the issuing of this denomination has achieved its purpose.
According to the RBI, the ₹2,000 denomination banknote was introduced in November 2016 primarily to meet the currency requirement of the economy in an expeditious manner, after the withdrawal of the legal tender status of all ₹500 and ₹1,000 banknotes in circulation at that time.
“About 89% of the ₹2,000 denomination banknotes were issued prior to March 2017 and are at the end of their estimated life-span of 4-5 years. The total value of these banknotes in circulation has declined from ₹6.73 lakh crore at its peak as on March 31, 2018 (37.3% of Notes in Circulation) to ₹3.62 lakh crore constituting only 10.8% of Notes in Circulation on March 31, 2023,” it had said.
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