Demonetisation| Prime Minister's Statement On Deadline For Note Exchange Won't Create Promissory Estoppel : Centre, RBI Tell Supreme Court

Even if the Prime Minister had, on the eve of demonetisation, assured that the exchange window would be extended beyond the end of the year, it would not be binding on the Government or the Reserve Bank of India in light of the statutory notification that was issued, Senior Advocate Jaideep Gupta told the Supreme Court on Wednesday(December 7). "In his address to the nation, the Prime Minister told the people that their money would remain theirs only if they followed the directions issued under the law. He also mentioned a timeline of fifty days. He did not say that more time would be given later. But, even if he had, it cannot be said that any promissory estoppel operated on the statutory notification causing the deadline to be extended," he submitted before the Constitution Bench hearing a batch of 58 petitions challenging the Union Government's decision to demonetise high-value currency notes of Rs 500 and Rs 1,000 in November 2016. The five-judge Bench, comprising Justices S. Abdul Nazeer, B.R. Gavai, A.S. Bopanna, V. Ramasubramanian, and B.V. Nagarathna, was invited to examine, inter alia, the legality of the November 8 circular that set the policy in motion, six years after it sent shockwaves through the nation. On Wednesday, after a marathon hearing over a period of six days, the Bench finally reserved its judgement.In his speech on November 8, 2016, Prime Minister Narendra Modi had said that those who, for some reason, were unable to deposit their old banknotes by the close of banking hours on December 30 would still be allowed to go to specified offices of the Reserve Bank till March 31 of the next year and deposit the notes after submitting a declaration form. By a notification, a 'grace period' was provided that extended up to March 31, 2017, for residents of India and up to June 30, 2017, for non-residents. However, this facility for exchanging the demonetised currency notes was made available only to such citizens who were not in India during the period from November 9 to December 30, 2016. On the final day of the demonetisation hearing, the Attorney-General for India, R. Venkataramani, echoed the sentiment of the counsel for the Reserve Bank and told the Constitution Bench, "There cannot be an argument of estoppel on the Prime Minister's statement. It was also made at a time when the notification had not yet been issued." He added, "In any case, the Prime Minister had said 'someone, for some reason'. This meant a good reason, legally acceptable reason, or legitimate reason." "Can the state sit back and say a non-resident Indian who failed to avail of the opportunity because he refused to forego the benefits derived from his residential status had a good enough reason?" the Attorney-General asked sarcastically.In the same vein, Gupta argued, "The November 8 notification, which is the law, said the exchange period would end in December. It was irrelevant what liabilities and guarantees existed. The notification is what matters." He asked, "The petitioner came back to the country in February, when he could have returned in November. What was he doing in the two months?" "This is an absolutely callous submission on part of the Reserve Bank," Divan hotly responded.On behalf of the Reserve Bank, it was further submitted that the Central Government and the legislature, in their wisdom, had decided against extending the window for exchanging old currency notes to prevent abuse of the process. Gupta also emphasised that under the extant mechanism, anyone who attempted to actuate such an exchange would be prosecuted for holding demonetised notes in contravention of the law. Justice Nagarathna asked how the government or the central bank planned to address situations such as the one faced by a petitioner who sought to exchange her husband's savings unearthed only after the window was closed. Gupta bluntly admitted, "It would be very difficult to deal with every situation like this." Senior Advocate Shyam Divan also spoke about the 'yawning gap' of persons facing genuine hardships who had not been covered by the grace period introduced to exchange demonetised banknotes. The main thrust of his argument was that the common people, such as the petitioner whom he represented, had around twenty-four hours to exchange the old currency notes since they had been led to believe that the exchange period would be extended. Such an understanding was predicated on the repeated assurances made by the Prime Minister, government bureau, finance ministry, press bureau, and Reserve Bank on various occasions, the senior counsel said. Divan contended, "The liability of the Reserve Bank and the statutory guarantee of the central government with respect to the demonetised banknotes lingered beyond November 8. On November 8, their legal tender status was withdrawn immediately and instantaneously, but the promise of the central government to honour the notes persisted. That is why, they provided for a window when the banknotes...

Demonetisation| Prime Minister's Statement On Deadline For Note Exchange Won't Create Promissory Estoppel : Centre, RBI Tell Supreme Court

Awstika Das

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Demonetisation| Prime Minister's Statement On Deadline For Note Exchange Won't Create Promissory Estoppel : Centre, RBI Tell Supreme Court

Awstika Das

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