Opposing the Supreme Court’s attempt to revisit the 2016 demonetisation exercise, the government on Friday said the court cannot decide a case when there is a “turn back the clock” and “opening a fried egg”. No concrete relief can be given through Attorney General R Venkataramani’s remarks came after the apex court asked the central government to inform whether it consulted the central board of the Reserve Bank of India (RBI) before demonetising Rs 500 and Rs 1,000 denomination notes in 2016. was.
A five-judge constitution bench headed by Justice SA Nazeer is hearing 58 petitions challenging demonetisation.
“You have only submitted that all these economic issues have been done by experts (so) don’t touch it. What is your objection to the plea of the other side? Tell us what is your submission to counter their submissions. They Said it is not in consonance with Section 26(2) of the RBI Act,” the court asked.
The bench, also comprising Justices BR Gavai, AS Bopanna, said, “You are arguing that the objectives laid down have been achieved. But, we would like you to address the allegation that the process that was followed is flawed.” Show us whether the procedure was followed or not.” , V Ramasubramanian and BV Nagaratna said.
Section 26(2) of the Reserve Bank of India Act says, “The Central Government may, on the recommendation of the Central Board, by notification in the Gazette of India, declare that with effect from such date as may be specified in the notification, any chain of banks shall Notes of any denomination except those of the agency and to the extent specified in the notification shall cease to be legal tender.”
The court’s remarks came after Venkataramani defended the demonetisation policy and said that the court should refrain from judicial review of an executive decision.
“It is well established that if the relevance of the investigation vanishes, the court will not give opinion on questions of academic value. Scrambled eggs,” Venkataramani said.
The AG submitted that “pedestrian” considerations such as whether there was a recommendation or consultation would reduce Section 26(2) of the RBI Act to a narrow sphere, thereby obfuscating the entire complexity of managing monetary policy.
“Demonetisation was not an isolated economic policy. It was a complex monetary policy. There will be completely different views. The degree of respect should also be higher… RBI’s role has evolved. We are not looking at some black money here. Have been.” And a few fake currencies here and there. We’re trying to see the bigger picture… Also, no sane person would say that just because you failed, your intentions were wrong. It doesn’t make logical sense,” he said.
At this juncture, Justice Gavai said that the argument of the petitioners opposing demonetisation is about everything that is done with respect to currency.
Justice Gavai remarked, “It is the primary duty of the RBI and therefore Section 26(2) of the RBI Act must come from the RBI. There is no dispute with the contention that the RBI has a primary role in setting monetary policy.”
Venkataramani said the petitioners argued that the RBI should apply its mind independently, but the functioning of the RBI and the government should be viewed from a flexible perspective as both have a symbiotic relationship.
Justice Nagaratna said the argument was that the Act recognizes the expertise of those in the RBI and the law recognizes the expertise of the Central Board of the RBI.
“We are not saying whether you are bound by that recommendation or not. The question is, where should it come from? Central government legislation recognizes the expertise of the Central Board of RBI. The argument is where is that? ” He asked.
As the hearing began in the morning, senior advocate Shyam Divan, appearing for a person seeking exchange of old notes worth Rs 1.62 lakh, submitted that his client had gone abroad on April 11, 2016.
“When the PM’s announcement came, there was assurance from the PM and the RBI that there was a deadline of December 30, 2016, but even after that they would be able to exchange the demonetised notes.
Diwan said, “He had withdrawn Rs 1.62 lakh. On February 3, 2017, he returned and tried to exchange the money. But his application was rejected. An ordinance was passed, which said December 31 No exchange will be allowed after 2016.” Adding notice by the government does not consider a situation where someone leaves money in the country and goes abroad.
He said his client cannot be arbitrarily deprived of his property and sought extension of the grace period to exchange the old notes.
“This court can interfere in individual matters, but considering the vastness and circumstances of our country, the RBI needs to take a comprehensive approach. They should have a general circular for such situations,” he said.
Justice Gavai said that prima facie genuine cases can be independently considered by the RBI.
The hearing remained inconclusive and will resume on 5 December.
Terming the demonetisation of Rs 500 and Rs 1,000 currency notes as “deeply flawed”, senior advocate P Chidambaram told the apex court on Thursday that the central government cannot on its own initiate any resolution relating to legal tender, Which can be done only on the recommendation of. Central Board of RBI.
Chidambaram, appearing for one of the petitioners opposing the Centre’s 2016 decision, submitted before a five-judge constitution bench that the authority to regulate the issue of banknotes rests solely with the Reserve Bank of India.
The Center recently told the top court in an affidavit that the demonetisation exercise was a “well thought out” decision and part of a larger strategy to tackle the menace of fake money, terrorism financing, black money and tax evasion.
Defending its decision to demonetise Rs 500 and Rs 1,000 denomination notes, the Center had told the top court that the move was taken after extensive consultations with the Reserve Bank of India and advance preparations before implementing the note ban. Went.