Modi government’s decision to demonetise old Rs 500 and Rs 1000 notes was right. The Supreme Court has approved it. A five-judge bench of the Supreme Court has upheld demonetisation.
On 8 November 2016, the Narendra Modi government at the Center had demonetised old notes of 500 and 1000 rupees. Challenging this decision, 58 petitions were filed in the Supreme Court.
Justice Abdul Nazeer, Justice BR Gavai, Justice AS Bopanna, Justice V. Ramasubramaniam and Justice B.V. Nagratna’s bench was conducting the hearing. The bench had reserved the judgment on December 7.
Justice BR Gavai and Justice Nagaratna read out the judgment on Monday. Justice Nazir, Justice Gavai, Justice Bopanna and Justice Ramasubramaniam have justified demonetisation. At the same time, Justice Nagaratna has expressed disagreement on this decision. Justice Nagaratna has termed the decision of demonetisation as ‘illegal’.
RBI did not get involved with the issue of demonetisation, or suddenly felt that demonetisation was going on.
RBI said that the government had told us 6 months ago that there would be demonetisation, it is not at all that we did not know, we knew everything.
RBI told that the government had announced 6 months back that demonetisation would happen.
In the Supreme Court, the RBI said that the procedure under the RBI Act was followed in making the recommendation to the Centre.
The prescribed quorum was followed in the meeting of the Central Board of RBI, which decided to recommend demonetisation to the Centre.
RBI also said that people were given a chance. Elaborate arrangements were made so that people could easily change their money.
Why did the Supreme Court justify demonetisation?
Reading out the judgement, Justice Gavai said, demonetisation was done to prevent crimes like black marketing and terror funding.
Justice Gavai said that it cannot be said that the 52 days given to exchange the old notes were not correct, but the decision cannot be faulted as it was taken by the government. Looking at the records shows that before demonetisation there were talks between the RBI and the central government for 6 months
Section 26(2) of the Justice Act empowers the Central Government to demonetise any series of notes. If the government wants, it can demonetize all the series.
The Supreme Court said that the Constitution and the RBI Act have given the central government the right to demonetise. No one can stop you from using it. So far this right of demonetisation has been used twice.
when and when demonetisation happened
Demonetization of 1946:
When the British rule came in 1946, then on January 12, 1946, the Governor General and the Viceroy implemented demonetisation, at that time after 12:00 midnight on January 26, 500 and 1000 notes became common.
When the Janata Party came to power in 1978, the government was formed and Manmohan Singh became its secretary.
At that time, on 16 January 1978, demonetisation was done for the second time. Then people had only three days to exchange the notes.
In 2016 demonetisation, people were given 52 days, on the basis of this the intention of the government cannot be questioned.
Illegal method of demonetisation: BV Nagaratna.tr
It termed the Centre’s November 8, 2016 notification as “illegal”. He argued that as per the Reserve Bank of India Act, the RBI should have recommended demonetisation independently and not through advice to the government.
was ‘illegal’ and the demonetisation process could not have been initiated by the Centre. He said, “In my view, the demonetisation action carried out vide notification of 8 November was illegal. But the position which was there in 2016 cannot be restored now.” “The exercise of the power of demonetisation was contrary to law and therefore illegal,” he said.