The Supreme Court on January 2, 2023 is scheduled to pronounce its judgment on the legality of the demonetisation policy.
A Constitution Bench of Justices S. Abdul Nazeer, B.R. Gavai, A.S. Bopanna, V. Ramasubramanian and B.V. Nagarathna heard over 50 petitions challenging the demonetisation exercise of the government undertaken in November 2016.
Justice Gavai, it is listed, would be pronouncing the judgment for the five-member Bench on the re-opening day after the ongoing winter recess of the court.
The court had reserved the case for judgment on December 7.
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While reserving the case for verdict on that day, the Bench had directed the Union government and the Reserve Bank of India (RBI) to place on record the "relevant records" of the demonetisation policy.
Attorney General R. Venkataramani had said the documents would be handed over to the court in a sealed cover.
The court had said it would not fold its hands and sit without judicially reviewing the procedure or manner in which ₹500 and ₹1,000 currency notes were withdrawn from legal tender in November 2016.
"Just because it is an economic policy, the court cannot fold its hands and sit… The court will go into the manner in which the decision was taken," Justice Nagarathna had addressed the government and the RBI.
Senior advocate P. Chidambaram, for the petitioners, had submitted that the RBI had "meekly submitted to the government's recommendation to withdraw 80% of the currency in the market after a deliberation of just one hour in one day".
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He had said finding the objectives of the 2016 demonetisation exercise was like looking for a "black cat in a dark room". He had submitted that the government cannot "frighten" the court to not judicially review the policy by saying that judges were not experts in economic policy.
He had flagged how the government had not shared with the court the records of the decision-making process leading to demonetisation. The senior lawyer said the government had not claimed that the demonetisation records were privileged or confidential either in its oral arguments or on affidavit.
The government had countered that demonetisation was a “transformational economic policy step” which led to a phenomenal growth in digital transactions while choking the evils of black money, terror funding and counterfeiting. It had claimed that demonetisation was a “critical” part of a policy push to “expand formal economy” and thin the ranks of the informal cash-based sector.
‘Part of nation-building’
The central bank, represented by senior advocate Jaideep Gupta, had said demonetisation was done on the recommendation of the RBI. It was not "uncanalised or unguided". Elaborate arrangements were in place. Reasonable opportunity was given to people to exchange their old notes for new. The exercise was an "integral part of nation-building".
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In one of the hearings, Justice Gavai had highlighted how a comatose person could have exchanged her old notes at the bank for new in the limited window offered to citizens between November 9 and December 31, 2016.
The petitioners had submitted that a judgment by the apex court seven years after the 2016 demonetisation would not be a "futile" exercise. They said the court should comment on whether a policy which saw millions endure hardships, unable to access their own hard-earned money, was proportional to the stated objectives for suddenly sucking out a large portion of money out of circulation. They had said the evils of black money, fake currency and terror continue to hold fort.