Constitution Bench to consider questions of law on demonetisation on September 28

The case is coming up before a Constitution Bench after six years

September 28, 2022 12:41 am | Updated 12:11 pm IST - New Delhi

A series of nine questions were referred to be considered by a Constitution Bench.

A series of nine questions were referred to be considered by a Constitution Bench. | Photo Credit: File photo

A Constitution Bench led by Justice S. Abdul Nazeer will hear on Wednesday a reference to test the legality of a November 8, 2016 notification on the demonetisation of ₹500 and ₹1,000 currency notes and the government’s implementation of the policy.

A series of nine questions were referred to be considered by a Constitution Bench in December 2016. The case is coming up before a Constitution Bench after six years.

The questions of law include whether the Reserve Bank of India (RBI) notification and the “limited withdrawal” of one’s own money were violations of Articles 14 (right to equality), 19 (freedom of speech, trade, occupation, etc.), 21 (fundamental right to protection of life) and 300A (right to property) of the Constitution. The three-judge Bench led by then Chief Justice of India T.S. Thakur had wanted a Constitution Bench to study if the implementation of the notification suffered from “substantive and procedural unreasonableness”.

The court had at the time refrained from providing any drastic interim relief in terms of complaints raised by the petitioners, including grievances that banks were not honouring the notified ₹24,000 weekly withdrawal limit of money and the expiry of exemptions granted to the public’s use of demonetised ₹1,000 and ₹500 notes for essential services and services like railway ticketing and payments at government hospitals and pharmacies.

The Supreme Court had trusted the government to be the best judge of its own economic and fiscal policies. It had placed its faith in the government’s assurances that the policy was triggered to weed out black money, counterfeit currency and choke terror funding.

In fact, the court at the time had accepted the government’s assurance that the ₹8,000 crore collected by a total of 367 district central co-operative banks between November 10 and 14 would be allowed to be deposited with the RBI after a “100% audit” of the KYC (Know Your Customer data) of the account holders by NABARD. The government said this amount would then be replaced with the new currency as per rules uniformly applied to all banks.

The three-judge Bench had also refused to extend exemptions for the use of demonetised currency, instead stating the decision was “best left to the Government of India”, which it trusted to take a “responsive and sensitive” attitude to the needs of the common man.

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