Why no category for those who could not exchange banned notes by Dec. 30 was created, SC asks Centre

The government should file an affidavit by April 11, explaining the reason why such a window was not created, says Bench

Updated - November 29, 2021 01:34 pm IST

Published - March 21, 2017 03:25 pm IST - New Delhi

A view of the Supreme Court of India. File photo

A view of the Supreme Court of India. File photo

The Supreme Court on Tuesday said the Central government left the “people in the lurch” by closing all options for them to deposit demonetised notes beyond the cut-off date of December 30, 2016.

The court indicated that Parliament had left it to the Centre’s discretion to offer a grace period for those who were genuinely unable to deposit their old ₹500 and ₹1000 notes by December 30. The Specified Bank Notes (Cessation of Liabilities) Ordinance of 2016 allows Indian citizens abroad and “any other class of persons specified by the Central government” to deposit their old notes beyond the cut-off date of December 31, 2016.

However, the Centre restricted the grace period till March 31, 2017 only to Indian citizens who were abroad during the period between November 9 and December 30, 2016.

“If you see the Prime Minister’s speech on demonetisation on November 8, 2016, he talks clearly about extending the grace period till March 31, 2017. Then comes the RBI notification, which also talks clearly about extending the time. Both gave people hope that there shall be... there would be an extension. The ordinance promulgated also gives you discretion to widen the categories of people beyond those who were abroad... So why did you choose to close this window completely? You left the people in the lurch,” Chief Justice Khehar asked.


Grace period

The court said the people believed in the PM’s words that they would be offered grace period to deposit the old notes till March 31. “With the PM saying so, they had good reason to believe... these may have been people who were hospitalised for the entire duration between November 9 and December 30,” Chief Justice Khehar addressed Attorney-General Mukul Rohatgi for the Centre.

“Parliament through the ordinance gave you the power of choice to extend the window, why did you not give people of other classes a chance?” the Chief Justice asked.

Mr. Rohatgi said the Prime Minister’s assurances had been overridden by the parliamentary law.

Though the ordinance gave the government absolute discretion to extend the window, allowing classes of persons other than those abroad to deposit, the government chose to ignore it.


‘Centre’s choice’

“It was my [Central government] choice. There was no cause for another window. Just because the law gave me a discretion does not mean I will allow everybody to come and deposit their old notes,” Mr. Rohatgi defended.

The AG said the government had witnessed a lot of abuse during the 50-odd days given to deposit the demonetised notes.

“The government cannot arbitrarily close its window to people in genuine difficulty. That attitude will not work here,” Chief Justice Khehar reacted.

The court directed the Centre to file an affidavit explaining why they chose not to extend the deadline for the deposit of old notes post December 30 despite Parliament giving it discretion to do so.

The Chief Justice highlighted how the ordinance was brought on the very last day — December 30 — allowed for deposit of old notes. “Why was there no notice given to the people? The people had drawn hope from the PM’s words that those in dire circumstances would be given more time till March 31, 2017 to deposit their old notes,” the court asked.

“The ordinance is a law. Law does not require prior notice. Where does this concept come from?” Mr. Rohatgi retorted.

The court conveyed its alarm at the fact that the law allows criminalisation of people who are found in possession of the demonetised notes. “Even then you did not deem it necessary to extend the window?” the court asked the government.

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