On extending the window for exchanging the demonetised currency, the Centre expressed its concern that it will open the floodgates for more such pleas under Article 14 of the Constitution.
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THE Supreme Court constitution bench of Justices S. Abdul Nazeer, B.R Gavai, A.S. Bopanna, V. Ramasubramaniam and B.V. Nagarathna, on Friday, asked the Attorney General for India (‘AGI’), R. Venkataramani to explain why the demonetisation notification was not issued in the name of the President of India.
The five-judge bench is hearing petitions filed in 2016 challenging the Union Government’s demonetisation decision of November 8, 2016.
One of the petitioners, advocate Viplav Sharma, appearing in person, told the bench that all the acts of the Union Government have to be done in the name of the President of India.
Sharma argued, “The notification, issued by the Government of India under Section 26(2) of the Reserve Bank of India Act, 1934 is foul to Article 77(1) of the Constitution.”
According to section 26(2), by notification in the Gazette of India, the Union Government can declare to cease any series of bank notes of any denomination to be legal tender. Article 77(1) states that all executive actions of the Union Government must be in the name of the President.
The AGI, who appeared rather surprised by this question, sought time to explain the same.
Genuine cases
Advocate Prashant Bhusan requested the bench to pass a general order to accommodate all those people who were not able to exchange their money by March 31, 2017. He argued that even ordinary people were impacted by the arbitrary cut-off date as they could not exchange the then-declared illegal tender with the currency that was in place.
The AGI, while stating that Reserve Bank of India (‘RBI’) has received around 700 applications, made clear the Union Government’s stand to not extend the window for exchanging the demonetised currency.
“If we open up an exception, then there will be numerous claims under Article 14. It will continue and we will not be able to manage it”, the AGI told the bench.
Justice Gavai told the AGI that the RBI Act allows the Union Government to exercise its discretion and decide the genuineness of a case based on their subjective satisfaction.
Justice Gavai observed, “Even in a genuine case if you are rejecting a claim, this would be an arbitrary exercise of power.”
The AGI replied, “But where do you draw a line to the number of requests that may come?”
Justice Gavai then made a reference to one of the petitioners, whose husband was in a coma. He died after the cut-off date. The wife recovered the money after his death and hence was unable to exchange the demonetised currency within the deadline.
We may be able to accommodate those applications within the powers under the RBI Act, the AGI told the bench.
The next hearing will be on December 5.
