DEMONETISATION Valid Or Not? : Supreme Court Constitution Bench Hearing- LIVE UPDATES

BVN J: The impact of a govt action cannot have any bearing on its legality.

Chidambaram: Govt action can be tested on the proportionality. Time cannot be turned back, but an act can be declared to be unreasonable.

Sr Adv Shyam Divan's client has lost Rs 30,000 during demonetisation.

Nazeer J, laughing: We are contemplating contributing Rs 5,000 each, we have heard this Rs 30,000 so many times.

Nazeer J: 1st point, we appreciate. It's a legal point. All other points, what will we do? It is over now.

Chidambaram: This court can declare law, even if there is no relief. This will prevent govt from embarking on such a misadventure.

Chidambaram: My next proposition is that arbitrary executive action must be subject to judicial review and tested on the touchstone of proportionality.

Chidambaram: The only conclusion is that the govt had set false objectives to justify its arbitrary and unreasonable policy.

Chidambaram: The intro of Rs 2000 notes facilitated the storing of unaccounted wealth. You remember the famous episode of Ram Jethmalani trying to prove that 1 crore can be stuffed in a suitcase. Now, he would have needed half a suitcase.

Chidambaram: Out of Rs 15.44 lakh by value of demonetised notes, Rs 15.31 lakh crores was returned. Practically, all allegedly unaccounted wealth in black money stored in Rs 500 and Rs 1000s was returned.

Chidambaram: Insofar as fake currency for subversive activities is concerned. Neither drug trafficking, nor terrorism has abated. Eg, in Punjab, which is a conduit for drug trafficking. These can be financed with real & fake currency.

Chidambaram: Soon after demonetisation, Rs 500 notes were issued again. The quality of fake notes improved considerably after this, making the counterfeit notes more difficult to spot.

Chidambaram: Obj of weeding out fake currency was not achieved. Eg, millions of Indians abroad are entitled to keep Indian currency, they would not have returned it. I concede that a portion was fake, but not 100% of unreturned currency.