'Any' Means 'All' : Supreme Court Says Centre Can Demonetise All Series Of Bank Notes Invoking Section 26(2) Of RBI Act

Interpreting the word "any" in Section 26(2) of the Reserve Bank of India Act 1934 as "all", the Supreme Court by 4:1 majority held that the Central Government has the power to demonetise all series of currency notes of a particular denomination.A 5-judge bench comprising Justices S Abdul Nazeer, BR Gavai, AS Bopanna, V Ramasubramanian and BV Nagarathna was deciding a batch of petitions challenging the 2016 decision of the Union Government to entirely cancel the currency notes of Rs.500 and Rs.1000. One of the arguments raised by the petitioners to question the legality of the decision was that as per Section 26(2), the Central Government can only demonetise certain specified series of currency notes of a denomination and not the all series, as the provision uses the words "any series of bank notes".Senior Advocate P Chidambaram, appearing for the petitioners, had argued that since the statute chose to use the specific words "any series", it meant that the legislative intention was to confer the power on the Central Government to withdraw certain specified series of notes. He also pointed out that the previous two acts of demonetisation of whole currency notes were carried out by special legislations passed by the Parliament and not through notifications issued under Section 26(2).Pragmatic and purposive interpretation must be adopted, says majorityRejecting the petitioners' argument, the majority opined that a purposivee and pragmatic interpretation must be adopted with respect to this provision. The majority judgment written by Justice Gavai stated that "the modern approach of interpretation is a pragmatic one, and not pedantic" and that "an interpretation which advances the purpose of the Act and which ensures its smooth and harmonious working must be chosen"."When the legislature itself has provided that the Central Government would take a decision after considering the recommendation of the Central Board of the RBI, which has been assigned a primary role in matters with regard to monetary policy and management and regulation of currency, we are of the view that the legislature could not have intended to give a restricted power under sub-section (2) of Section 26 of the RBI Act", Justice Gavai wrote in the majority judgment.Restrictive meaning for "any" will lead to anomalyAccording to the majority, if Section 26 (2) is interpreted in a restricted manner, it may "lead to an anomalous situation". The following example was cited :"For example, if there are 20 series of a particular denomination, and if the argument of the petitioners is to be accepted, the Central Government would be empowered to demonetize 19 series of a particular denomination, leaving one series of the said denomination to continue to be a legal tender, which would lead to a chaotic situation...If the Central Government finds that fake notes of a particular denomination are widely in circulation or that they are being used to promote terrorism, can it be said, for instance, that out of 20 series of bank notes of a particular denomination, it can demonetize only 19 series of bank notes but not all 20 series?In our view, this will result in nothing else but absurdity and the very purpose for which the power is vested shall stand frustrated".The majority stated, "An interpretation which, in effect, nullifies the purpose for which a power is to be exercised, in our view, would be opposed to the principle of purposive interpretation. Such an interpretation, in our view, rather than advancing the object of the enactment, would defeat the same".As regards the argument that previous instances of demonetisation were through legislations, the Court observed that on earlier two occasions, since the RBI was not in favour of the demonetization, the Government resorted to promulgating ordinances for the said purpose. "We are, therefore, unable to accept the contention that the word “any” has to be given a restricted meaning taking into consideration the overall scheme, purpose and the object of the RBI Act and also the context in which the power is to be exercised. We find that the word “any” would mean “all” under sub-section (2) of Section 26 of the RBI Act", the majority judgment held.The judgment referred to several precedents where "any" has been interpreted to mean "all".Dissent of Justice NagarathnaJustice Nagarathna differed from the majority on this issue. "When the words of a statute are clear, plain or unambiguous, i.e., they are reasonably susceptible to only one meaning, the court is bound to give effect to that meaning and admit only one meaning and no question of construction of a statute arises, for, the provision/Act would speak for itself", the judge stated at the outset while answering this issue.Applying the above rule, if Section 26(2) is read as per the plain meaning of the words of the provision, Justice Nagarathna said that it does not lead to any ambiguity. "The plain meaning rule is the golden rule of construction of...

'Any' Means 'All' : Supreme Court Says Centre Can Demonetise All Series Of Bank Notes Invoking Section 26(2) Of RBI Act

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