Constitution Bench says ‘embarrassing’ to adjourn demonetisation case

“Normally, a Constitution Bench never adjourns like this. We never rise like this once we have started,” says judge

November 09, 2022 09:54 pm | Updated November 10, 2022 12:27 am IST - New Delhi

The Supreme Court deferred to November 24 the hearing on a batch of pleas challenging the Centre’s 2016 decision to demonetise currency notes of the denomination of ₹500 and ₹1000. File

The Supreme Court deferred to November 24 the hearing on a batch of pleas challenging the Centre’s 2016 decision to demonetise currency notes of the denomination of ₹500 and ₹1000. File | Photo Credit: PTI

A Constitution Bench on Wednesday found it “very embarrassing’ when the government sought an adjournment in the demonetisation case to file a “comprehensive affidavit”.

“Normally, a Constitution Bench never adjourns like this. We never rise like this once we have started. It is very embarrassing for this court,” a five-judge Bench, led by Justice S. Abdul Nazeer, said.

Usually, setting up a Constitution Bench requires a lot of planning as judges are drawn from different Benches and away from their regular cases to hear the issue in question, which would be a significant one.

However, Attorney-General R. Venkataramani, for the government, urged the court to grant him a week’s time while apologising for the delay. The court postponed the hearing to November 24.

On October 12, in a preliminary hearing, the Bench had asked the government and the Reserve Bank of India (RBI) whether it had realised its stated objectives of choking black money, terror financing and fake currency through its policy to demonetise ₹500 and ₹1,000 notes in 2016.

The government had been urging the Bench not to “waste” judicial time on the issue of demonetisation. Mr. Venkataramani had termed the case as “academic” in nature as things had long settled. Solicitor General Tushar Mehta had questioned the very maintainability of the case which concerned a purely economic policy of the government. Senior advocates P. Chidambaram and Shyam Divan, for petitioners, had however countered that the issue was “very much alive”.

Demonetisation in 1946 and 1978 were implemented through separate Acts debated by the Parliament. In 2016, it was done through a mere notification issued under provisions of the Reserve Bank of India Act, 1934. They had said the court should declare the law or nothing would stop the government from repeating the exercise, which had seen “horrendous consequences”.

Also read | Demonetisation behind the buoyancy in tax collections, says RBI MPC member

Mr. Chidambaram, citing the RBI’s annual report, had submitted that ₹15.44 lakh crore worth of currency was demonetised. The withdrawn money amounted to 86.4% of the currency in circulation at the time. Only ₹16,000 crore out of the ₹ 15.44 lakh crore was not returned. He said only .0027% fake currency was “captured” following demonetisation.

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