RBI backs govt on demonetisation in SC

Wednesday 14th December 2022 06:25 EST

Backing Centre's 2016 demonetisation decision, the Reserve Bank of India told the Supreme Court that it was not a "thoughtless" process as contended by petitioners who are challenging the decision and submitted that the court should refrain from scrutinising it for being a economic policy decision.

Senior attorney Jaideep Gupta testified before a five-judge constitution bench consisting of Justices S Abdul Nazeer, B R Gavai, A S Bopanna, V Ramasubramanian and B V Nagarathna and claimed that there was consensus on the issue, with the exception of a few opponents.

Gupta, speaking on behalf of the RBI, argued that the court shouldn't interfere with the government's economic strategy and shouldn't review the legality of the decision to demonetize the Rs 500 and 1,000 notes in 2016. Referring to various judgments of the apex court, Gupta said that courts should not interfere in policy matters unless the policy is found to be discriminatory and arbitrary.

However, the bench declared that the court would not consider the decision's merits but rather its decision-making procedure. Justice Nagarathna stated, "We are not delving into the law of the decision, but the process of decision-making. Gupta submitted that elaborate arrangement was done for smooth implementation of the decision but accepted that citizens had to face hardship due to it.

"Temporary hardships are also an integral part of the nation-building process. Some of the hardships may not have been anticipated. But we had a mechanism by which problems that arose were solved," he said.

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