Demonetisation was a way of converting black money into white: Justice B.V. Nagarathna

Supreme Court judge criticises demonetisation, highlighting the lack of consultation and arbitrary decision-making process

Supreme Court judge B.V. Nagarathna said that she had to disagree with demonetisation as the common man’s predicament really stirred her. File | Photo Credit: K. Gopinathan

About 98% of the demonetised currency of ₹500 and ₹1000 notes came back to the Reserve Bank of India (RBI). “I thought it was a way of converting black money into white,” said Supreme Court judge Justice B.V. Nagarathna while speaking at the fifth edition of the Courts and the Constitution annual conference organised at the NALSAR University of Law in Hyderabad on Saturday.

“We all know what happened on November 8, 2016 when ₹500 and ₹1000 notes were demonetised. The interesting aspect is that in the Indian economy at that time, ₹500 and ₹1000 notes comprised 86% of the currency, which the central government lost sight of while demonetising the currency notes,” said Justice Nagarathna.

She further cited how a labourer who went to work those days and received a ₹500 or ₹1000 note at the end of the day, had to go and get that note exchanged before buying daily essentials.

Justice Nagarathna said that she had to disagree with demonetisation as the common man’s predicament really stirred her. She highlighted the absence of a legally sound decision-making process, highlighting its arbitrariness and lack of consultation before making the call for demonetisation. “If really India wanted to go from paper currency to plastic currency, demonetisation was not a reason for it,” she added.

During her address, she cautioned against instances of governors sitting on bills passed by popularly elected legislatures indefinitely, referring to the case involving the Governor of Punjab, and reiterated the high constitutional nature of the governor’s office. She also highlighted the Maharashtra Legislative Assembly case as another instance of gubernatorial overreach, where the governor lacked sufficient material to declare the floor test. 

Also present at the conference were Justice Sapana Pradhan Malla from the Supreme Court of Nepal and Justice Syed Mansoor Ali Shah from the Supreme Court of Pakistan. The session also featured contributions from Justice Alok Aradhe, Chief Justice of Telangana High Court and Chancellor of NALSAR.