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Ahead Of SC Hearing, Centre Says Demonetisation Necessary ‘Reasonable Restriction’ Not ‘Deprivation’

LiveLaw News Network
2 Dec 2016 3:41 AM GMT
Ahead Of SC Hearing, Centre Says Demonetisation Necessary ‘Reasonable Restriction’ Not ‘Deprivation’
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In an affidavit filed just before the crucial hearing on demonetization set for today, the centre has told the Supreme Court that the scrapping of old Rs 500 and Rs 1,000 banknotes, Curb on money transactions, including withdrawals and wedding expenses banknotes does not violate citizens’ fundamental rights, as alleged, but imposed “reasonable restrictions” to eradicate black money and counterfeit currency.

“It is in no way a deprivation”, the centre said.

The affidavit which will be taken up for hearing by a bench headed by Chief Justice T S Thakur said: “In the present case, the public is not deprived from using the money or the value for the legal tender possessed by them. They can still use their money by use of cheques, e-transfer, etc. The government, however, in view of the changeover of the fake notes, has for a limited period, imposed certain reasonable restrictions in the form of limited withdrawal of money and or exchange thereof,”

Questioning the argument that the measure of demonetisation was illegal and the centre had no power for it and it vested with the Reserve Bank of India, the government pointed out that the RBI was under its “management and control”.

The Centre also defended its decision to introduce Rs2,000 currency notes, saying it was done keeping in view “the erosion of purchase value of money due to rising inflation”. There was nothing illegal in the printing of the high denomination note, it said.

It said 1.69 lakh ATMs had been recalibrated as on November 28. “By December 2, it is expected that 1.96 lakh ATMs will be recalibrated. It is noteworthy that around 8,000 ATMs are being recalibrated on a daily basis,” it said.

The government denied any lack of preparedness in implementing the demonetisation policy. It said the Central Board of the RBI had recommended to the government to cancel the legal tender of Rs. 500 and Rs. 1000 with effect from November 8, which it did.

On November 25 CJI Thakur led bench deferred the hearing in petitions against demonetisation to December 2 after senior lawyer Kapil Sibal appearing for petitioners insisted that he wanted to challenge the constitutional validity of the measure and not just confine to problems faced by the people.

At outset the Sibal had said a larger bench should hear the challenge to the constitutional validity of the step taken but the government which was causing inconvenience to the public.. Sibal repeated that the RBI rules do not allow anybody to prevent anyone from withdrawing their rightful and legitimate money from the bank and the banks were only trustees of the money.

But Attorney General Mukul Rohatgi countered it saying a two judge bench was sufficient and the petitions itself should be dismissed on the basis of affidavit submitted by the centre detailing the steps taken to alleviate the sufferings of the people.

CJI Thakur then said that if Sibal was insisting that he is challenging the constitutional validity then the bench shall wait for all other petitions and keep it for hearing on Friday as ther cant be a "piece meal approach".

This article has been made possible because of financial support from Independent and Public-Spirited Media Foundation.

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