The majority judgment of the Supreme Court on January 2, 2023 details extensively the documents placed on record by the government to conclude that the Central Board of the Reserve Bank of India was very much in the loop before recommending the demonetisation of ₹500 and ₹1,000 banknotes in November 2016.
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The documents have been discussed to counter the apprehensions raised by the petitioners that the Central Board did not independently apply its mind to the viability of the massive exercise implemented “hastily”.
In fact, the judgment said the RBI response also contained a “draft scheme to implement the proposal for demonetisation in a non-disruptive manner with as little inconvenience to the public and business entities as possible… The same was also taken into consideration by the Cabinet for implementation of demonetisation”.
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The court said the Central Board, in its 561st meeting held on November 8, 2016, had held an “elaborate discussion” and found that “the proposed step presents a big opportunity to take the process of financial inclusion further by incentivising the use of electronic modes of payment”.
“The Central Board has taken into consideration that the matter had been under discussion between the central government and the RBI for the last six months,” the judgment noted.
Justice B.R. Gavai, who authored the majority opinion, said the Note for the Cabinet had contained data available as per Economic Survey for 2014-15 and 2015-16, and the report of the Intelligence Bureau with regard to infusion of Fake Indian Currency Notes (FICN) and generation of black money.
The Note had also contained details with regard to a 2012 White Paper on black money. It had further included details with regard to a report of a Special Investigation Team headed by two former Judges of the Supreme Court on black money and their recommendations to eliminate the evil.