Centre asked to explain why coop. banks not given old note exchange task

A Division Bench of the Hyderabad High Court comprising Acting Chief Justice Ramesh Ranganathan and Justice A. Shankara Narayana on Monday asked the Union of India to explain by Wednesday why cooperative central banks were kept out of the process of accepting deposits and exchanging of old currency notes of the denomination of Rs. 500 and Rs. 1000.

The Bench was dealing with two separate writ petitions filed from Andhra Pradesh and Telangana. M. Saya Reddy of Nizamabad and the Prakasam District Cooperative Central Bank (DCCB) contended that cooperative banks dealt with farmers and their credit needs and that they must be given such a facility in the wake of the demonetisation.

They said the decision to keep away cooperative banks was a disaster for rural folk and would spell death knell for farmers. The Bench wanted the Reserve Bank and the Centre to explain the rationale of keeping out the cooperative banks. The Bench will hear the arguments on behalf of the Union of India on Tuesday in two cases filed challenging the decision of demonetisation. Two advocates addressed the Bench on the constitutional validity of the decision announced by the Prime Minister.

It was contended that the RBI Act had provided for cancellation of one series of currency notified and that the present omnibus demonetisation was illegal. Another counsel said the board of the RBI reportedly took note of terrorism and corruption.

The Board had no business to look into such issues and recommend decisions like the one taken now.

The Bench will hear the arguments of Union of India in these two cases on Tuesday.

Meanwhile, former Minister M.V. Mysoora Reddy filed a Public Interest Litigation seeking directions to the Union of India for remedial measures to see that the difficulties faced by poor people, farmers and the like were taken care off.

He challenged the restrictions on withdrawal of cash and wanted supply of adequate currency notes of lower denomination. If the papers were found to be in order, the PIL is likely to come up for hearing on Tuesday before a Division Bench headed by the acting Chief Justice.