The court also referred to a larger five judges bench the batch of petitions challenging the demonetisation as it stayed proceedings before different high court on petitions challenging the decision and barred all the courts from entertaining any plea on this count. It framed nine questions to be addressed by the larger bench which included the validity of demonetisation decision vis-a-vis Section 26(2) and Sections 7, 17, 23, 24, 29 and 42 of the Reserve Bank of India Act, 1934 and whether it contravene the provisions of Article 300(A) of the Constitution.
The larger bench will also examine the scope of judicial review in matters relating to fiscal and economic policy of the Government.
Refusing to issue direction to the government on extending the period of exemption on using the defunct currency notes, the bench of Chief Justice T.S. Thakur, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud left it to the government to take a call on the issue. “In our opinion, whether the exemption period should be extended or not must be best left to the judgment of the government of the day with a hope that the government will be responsive and sensitive to the problems encountered by the common man,” said the order by the court pronounced by Chief Justice Thakur.
“…, we may commend to the authorities to fulfill their commitment… permitting withdrawal of Rs.24,000 per account holder of the bank per week to the extent possible and review that decision periodically and take necessary corrective measures in that behalf,” said the court as it referred to the reasons for the demonetisation of Rs 500 and Rs 1,000 denomination notes.
Attorney General Mukul Rohatgi had told the court that demonetisation decision was taken to eliminate the black money, counterfeit currency and terror funding.
The order also noted the government telling the court that it would take around 50 days time to streamline the cash flow and that period is still not exhausted. It also noted government telling the court the Reserve Bank of India has been able to infuse around Rs. 5 lakh crore of the new currency notes of Rs 500 and Rs 2,000 denomination which was almost over 40 per cent of the demonetised currency.
Issuing notice on the government plea for the transfer of a large number of matters before different High Courts challenging the November 8 decision of demonetisation, the court stayed their proceedings. It asked those petitioners to approach the top court instead.
It would be “just and proper” to” withdraw all the petitions/proceedings pending in different high courts across the country and to be heard by this court” along with the petitions which are already pending and raising same or similar issues, the order said.
On the District Co-operative Banks, the court, taking note of the government decision, directed the competent authority to issue necessary notification within two days by which defunct currency notes collected by them could be exchanged for new currency after 100 per cent verification of the KYC.
The DCB which had received deposits to the tune of Rs 8,000 crore in four days from November 11 to 14 were barred from accepting deposits or exchanging demonetised notes.