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Supreme Court issues notices on note exchange

New Delhi: The Supreme Court on Monday issued notices to the Centre and the Reserve Bank of India (RBI) on a batch of petitions seeking a direction that old notes of Rs 500 and Rs 1,000 should be accepted in RBI branches upto March 31 as per the promise made by Prime Minister Narendra Modi in his speech on demonetisation made on November 8, 2016.

A Bench of Chief Justice J.S. Khehar and Justices D.Y. Chandrachud and Sanjay Kish-an Kaul issued notices returnable on Friday after hearing senior counsel Dhruv Mehta and others challenging the ordinance which makes retaining old notes beyond a limit as a punishable offence.

It was argued that they had genuine reasons for not depositing the old `500 and `1000 notes in banks before December 30, 2016. Both the Prime Minister and the RBI had clearly stated that such notes will be accepted by RBI upto March 31, 2017.

However, they were shocked to find that the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 provided that only the super rich (international travellers and NRIs) would avail of the so-called “grace period” up to March 31, 2017 and beyond.

This measure of the government and the RBI is a violation of Articles 14 and 21 of the Constitution, as it arbitrarily discriminates between the classes of people and also provides for criminal penalties against those who continue to possess this currency.

It was alleged that the Prime Minister and RBI had assured the people at large that demonetised currency notes can be exchanged at banks, post offices and RBI branches and if people are unable to deposit them by that day then they can do so till March 31, 2017 at RBI branches.

Referring the final ordinance, the lawyer said that it had breac-hed the assurance. The Ordinance said that only those who were abroad, the armed forces personnel posted in remote areas or others, who can give valid reasons for not being able to deposit the cancelled notes at banks, can deposit the demonetised currency notes till March 31.

The Centre had come out with the Ordinance making possession of a large number of scrapped banknotes a penal offence that will attract monetary fine.
The Ordinance also provided for amending the RBI Act to provide legislative support for extinguishing the demonetised banknotes that are not returned.


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