Legal questions on demonetisation find no answer in SC
legal provision under which the Reserve Bank of India’s (RBI) demonetisation notification of November 8 was issued only empowers the Central Government to scrap “series” of bank notes and not the “entire existing currency” of Rs. 500 and Rs. 1000 notes.
Section 26 (2) of the Reserve Bank of India (RBI) Act of 1934 — the provision under which the notification was issued — allows the Centre to make a declaration only to the extent that “any series of bank notes of any denomination ceases to be legal tender.”
The argument was pressed before a Bench of Chief Justice of India T.S. Thakur and Justice D.Y. Chandrachud on Wednesday, and remains to be addressed by the apex court.
“We are on the constitutional validity of the November 8 notification. Under what diktat have all series of Rs. 500 and Rs. 1000 notes become black money? Does this mean any note of Rs. 500 is black money?” senior advocate Kapil Sibal, appearing for petitioner Adil Alvi, had submitted.
Secondly, the Supreme Court was informed of how the government has insisted on identity cards for people coming to exchange the demonetised Rs. 500 and Rs. 1000 notes for the new currency. Section 26 (2) of the 1934 Act poses no such requirements. Even the latest development to use indelible ink mark to avoid repeat exchanges is a restriction not found in the legal provision.