Adhere To 2017 Notification On Production Of Demonitized Currency, So It Can Be Exchanged As Legal Tender: Karnataka HC To Trial Courts

The Karnataka High Court has asked trial courts, before whom demonetized banknotes have been produced by investigating agencies on or before December 30, 2016, to follow the procedure for releasing the notes mentioned in Centre's 2017 notification, so that concerned persons can exchange it for legal tender.A division bench of Justice S Sunil Dutt Yadav and Justice Ramachandra D Huddar in its order said “Unless there is adherence to the requirements of the notification strictly, parties to the litigation would be prejudiced irreparably without any lapse on their part. Accordingly, the investigating agencies and the Courts are to adhere to the requirements of the notification dated 12.05.2017 strictly.”The Union Ministry of Finance's May 12, 2017 notification prescribes that where specified Bank notes are confiscated by the investigating agencies and is deposited by the Court, and once the same are returned by the Court to a person who is the party in the case pending/decided before that Court, then such person "who is in receipt of the Bank notes may on production of direction of the Court", seek for exchange of such specified Bank notes. However, "twin obligations" are required to be followed for getting the benefit of the notification. First condition is that the law enforcement agency which confiscates the notes and/or produces them before the Court must mention the serial number of the specified Bank notes that have been confiscated and/or produced before the Court. The second condition is that direction of the Court referred to in the notification which would enable the litigant to request for exchange of notes should mention the "serial numbers of the Bank of the specified Bank notes seized by the Law Enforcement Agency" while the Court permits returning of that amount to the person, who is a party in the case pending before that Court. Thus the court said “Directions referred to above may be taken note of by the investigating agencies and courts concerned so as to enable the parties to the litigation to obtain exchange of the amount of the demonetized currency with legal tender.” The division bench passed the order while deciding an appeal filed by Reserve Bank of India, which had challenged a single judge bench's order directing it to consider the representation made by one Sanjukumar seeking exchange of certain bank notes. The bench firstly accepted the RBI's contention that direction for considering the representation could be given only to the Union of India and not the RBI. The court then said, “The proceedings in the course of which the currency was seized was quashed and the trial Court was directed to consider release of the seized properties. The Trial Court though has ordered for release of the demonetized currency, it is admitted that the order is not in accordance with the circular of the Ministry of Finance as referred to above.” It thus held, “Petitioner has to approach the same court that has returned the demonetized currency, with a request to pass a fresh order taking note of the requirements of the notification of Ministry of Finance, New Delhi, dated 12.05.2017.” The bench said that after Sanjukumar avails such liberty and obtains order of the concerned court, copy of the order passed may then be submitted to the Union of India along with the fresh representation, which may take note of it and pass appropriate directions and take steps. Case Title: Reserve Bank of India & ANR AND Sanjukumar & ANRCounsel for Appellant RBI: Senior Advocate B C Thiruvengadam for Advocates Manik B T, Ajay Jawali Counsel for Sanjukumar: Ashok B MulageCounsel for UOI: DSGI Sudhir Singh R VijapurCitation No: 2024 LiveLaw (Kar) 425Case No: WA 200185 OF 2024Click Here To Read/Download Order

Adhere To 2017 Notification On Production Of Demonitized Currency, So It Can Be Exchanged As Legal Tender: Karnataka HC To Trial Courts

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