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The Supreme Court is scheduled to rule on the note ban on January 2.

On January 2, 2023, the Supreme Court will rule on a group of petitions contesting the government’s 2016 move to demonetize Rs 500 and Rs 1,000 currency notes.

The Supreme Court reopens on January 2 following its winter recess.

A five-judge constitution panel led by Justice S Abdul Nazeer reserved its decision on December 7 after hearing the petitioners’, the Centre’s, and the Reserve Bank of India’s lengthy arguments.

The bench, which also included Justices B R Gavai, A S Bopanna, V Ramasubramanian, and B V Nagarathna, had requested that the government and RBI disclose the relevant records relating to the decision-making process that led to the notification issued on November 8, 2016.

The retirement date for Justice Nazeer is January 4, 2023.

Upon receiving the 58 petitions challenging various components of the government, the Supreme Court originally questioned whether it had become an intellectual dispute purely. It subsequently decided to investigate the matter, with petitioners arguing that the procedure outlined in Section 26(2) of the RBI Act of 1934 was disregarded.

The provision states that “on the recommendation of the [RBI] Central Board, the Central Government may, by notification in the Gazette of India, declare that, with effect from such date…any series of bank notes of any denomination shall cease to be legal tender except at such office or agency of the Bank and to the extent specified in the notification.”

P Chidambaram, appearing on behalf of one of the petitioners, argued that according to the Section, the recommendation should have “emanated” from RBI, but in this case, the government counselled the central bank, which then made the recommendation. He stated that when previous governments demonetized currency, in 1946 and 1978, they did so through a bill passed by Congress.

Chidambaram further said that the government withheld relevant papers from the court and questioned if the quorum for the RBI Central Board meeting had been met.

Senior attorney Jaideep Gupta, representing RBI, rebutted the claim by pointing out that “the Section does not discuss the initiation process. It just states that the process cannot be completed without the final two phases.” He added, “We (RBI) provided the recommendation…”

Attorney General R Venkataramani stated that demonetisation was not an isolated move, but rather part of a larger economic agenda, and hence RBI or the government cannot act independently. “They act through consultation,” he argued.

Of the issue regarding prior demonetization choices, Gupta stated that the Reserve Bank of India (RBI) did not approve the recommendations, thus the previous government enacted the law. In addition, he disputed that any documents were kept from the court.

The central bank also noted that the quorum for the Central Board meeting, as determined by the RBI General Regulations of 1949, was met. In addition to the then-RBI Governor and two Deputy Governors, five directors appointed under the RBI Act were present, according to the document. Accordingly, the statutory requirement that three of them be nominated “has been met,” Gupta stated.

Under Section 26(2), Chidambaram contended the government cannot demonetize all series of a denomination’s banknotes. He requested the court to interpret the rule so that the word “any” be interpreted as “some.”

Gupta said that such an approach would result in “nothing but confusion.”

 

Nisha

Hi, my name is Nisha and I'm an educational journalist based in India. I've always been passionate about the power of education to transform lives, and that's what led me to pursue a career in journalism focused on this area. I completed my Bachelor's degree in English from Hindu College in Delhi in 2013 and then went on to earn my Master's in Journalism and Mass Communication from the Indian Institute of Mass Communication in 2017. During my studies, I also completed several short-term courses on Education in India, Sociology, and other related subjects to deepen my knowledge in this field. I'm particularly interested in improving access to quality education in rural areas, where students often face significant challenges. I've worked on a number of initiatives to address this issue, including advocating for better policies, resources, and practices that can make a difference. As an educational journalist, I'm passionate about using my platform to highlight important issues in the education space. I've covered a wide range of topics, including the impact of technology in the classroom, innovative approaches to teaching and learning, and the challenges facing students from marginalized communities. One of the things I love most about my work is the opportunity to constantly learn and grow. I'm an avid reader and believe that reading is key to expanding one's knowledge and perspective. I'm always seeking out new ideas and insights to help me better understand the world around me. In summary, as an educational journalist, I'm dedicated to using my skills and expertise to make a positive impact in the field of education. I'm committed to improving access to quality education for all students and to using my platform to raise awareness about important issues in this area.

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