Litigation over demonetisation and subsequent notifications keeps on increasing. Seven District Co-operative Banks (DCBs) of Kerala have now filed a writ petition in the Supreme Court seeking a writ to strike down the notification of Reserve Bank of India and the Union Government dated November 8 and November 14 regarding demonetisation. The notification issued by the centre and the subsequent clarification issued by the RBI prohibits DCBs from accepting or allowing exchange of old 500 and 1000 rupee notes.
There are 14 DCBs in Kerala, one in each state. Seven of these are petitioners in the matter along with one account holder in one of the banks. The petition states that the “impugned notifications severely cripple and hamper the business / banking activities being carried out by the petitioner Banks thereby posing a grave threat to the very continuance and sustainability of these decades-old Institutions.” The petitioner banks have argued that these notifications violate their fundamental rights under Article 19(1)(g) of the constitution.
According to the petition, membership of the DCBs is comprised of and restricted to Primary Agricultural Credit Societies (PACS) and Urban Co-operative Banks. At the bottom of the pyramid are the Urban Co-operative Banks and other Primary Co-operative Banks, which discharge banking facilities as per licenses granted to them. There are around 1587 PACS and “they comprise of lakhs of small farmers” to whom loans and advances are given for agricultural purposes. It is the case of the DCBs that these depositors are suffering due to the notifications.
Petitioners have also pointed out that while the State and Urban Co-operative Banks have been permitted to accept deposits a similar permission has not been accorded to District Co-operative Banks.
Bombay High Court is hearing a similar petition filed by DCBs in Maharashtra. Although the court had observed that there were prima facie inconsistencies between two notifications issued, the centre took a stand via a clarification that such was not the case. This matter will be heard on December 5 after the apex court hears the transfer petitions on December 2. The Kerala DCBs petition will also be heard on December 2.
Read the petition here.
This article has been made possible because of financial support from Independent and Public-Spirited Media Foundation.