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Vivek Narayan Sharma v. Union of India

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Vivek Narayan Sharma v. Union of India

This case relates to the decision of the Indian government to demonetise notes of Rs. 500 and Rs. 1000 through a Notification dated 08-11-2016.

Petitioners Arguments
The RBI must assure that the entire amount that is offered by the District Co-operative Banks for exchange after due verification in the form of demonetised notes will be duly replaced with legal tender notes. The exemption period for use of demonetised notes had expired as per the relevant notification and the same were not allowed to be used even in case of emergency citations like hospitalisation, travel by railways or air etc. The denial of Right to Withdraw as per RBI Notification was raised. The government had issued such notification after due consideration and was obligated to ensure its commitment made under the said notification without any exception. The ground reality was that Banks were refusing to allow payment of the full amount on the ground of non-availability of enough volume of legal tender currency.
Responders Arguments
Financial Policy has been adopted on the basis of experience. With respect to District Co-operative Banks, the respondent argued that there was an apprehension that demonetised notes were being converted or exchanged without proper audit, control or supervision, especially since these banks were not directly under the control of the RBI but within the preview of NABARD . The dispensation provided by NABARD was not in conformity with the strict regime provided under the provisions of the Banking Regulation Act, 1949 and the RBI Act, 1934. The Attorney General presented written instructions received by the Under Secretary to the Government of India dated 14-12-2016 according to which, the policy of replacement of the legal tender notes as applicable to public Sector Banks and other Banks will be applied even in case of District Co-operative Banks. The Government argued that it would take around 50 days time to streamline the cash flow and the period had not been exhausted at the time the case was being heard. It also contended that 40% of the demonetised notes already deposited with the Banks have been infused with the new legal tender notes in form of Rs. 500 and Rs. 2000. The authorities would try their best to defuse the crisis of the cash flow situation by printing new notes. The government could not print notes in advance because the nature of the decision taken was to unearth black money or unaccounted money, to dry up the terror fund and end circulation of large scale counterfeit currency. It was imperative to maintain secrecy of such a decision.
Last Listed On
2023-01-02
Start Date
2016-12-16
End Date
2023-01-02
Card Stage Date
2023-03-02
Review Petition No
W.P.(C) No. 906/2016
Case Status
Archive
Bench Status
Constituted
Subject Matter
Constitution
Disposal Time
6 years, 17 days

5 Judge Bench

Judgment delivered

Consider As Stage Of Pendency
false

Date of institution of case

Date of reference to 5 Judge Bench

Judgement pronounced

The present case relates to the decision of the Indian government to demonetise currency notes of Rs. 500 and Rs. 1000 through a Notification dated 08-11-2016 (in exercise of the powers conferred by Section 26(2) of the Reserve Bank of India Act, 1934 ). The matter was heard by the Supreme Court and a division bench of Hon’ble Justices A. M. Khanwilkar and D. Y. Chandrachud decided to refer the matter to a five-judge bench.

Is the notification dated 08-11-2016 ultra vires Section 26(2) and Sections 7, 17, 23, 24, 29 and 42 of the Reserve Bank of India Act, 1934 ? Does the notification contravene the provisions of Article 300A of the Constitution? Assuming that the notification has been validly issued under the Reserve Bank of India Act, 1934, is it ultra vires Articles 14 and 19 of the Constitution? Does the limit on withdrawal of cash from the funds deposited in bank accounts have no basis in law and violates Articles 14, 19 and 21 of the Constitution? Does the implementation of the impugned notification(s) suffer from procedural and/or substantive unreasonableness and thereby violates Articles 14 and 19 and, if so, to what effect? In the event that Section 26(2) is held to permit demonetization, does it suffer from excessive delegation of legislative power thereby rendering it ultra vires the Constitution? What is the scope of judicial review in matters relating to fiscal and economic policy of the Government? Is a petition by a political party on the issues raised is maintainable under Article 32 ? Have District Co-operative Banks been discriminated against by excluding them from accepting deposits and exchanging demonetized notes?

Government of India Gazette Notification No. 2652 dated 08-11-2016

Keeping in view the general public importance and the far reaching implications which the answers to the questions framed by the bench may have, the Supreme Court considered it proper to direct that the matters be placed before the larger Bench of five judges for an authoritative pronouncement.

NA

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Supreme Court notice to petitioners challenging demonetisation

Supreme Court notice to petitioners challenging demonetisation
Source Of Info
The Economic Times
Date Of Fr
2016-11-23

Awaiting judgment on demonetisation

Awaiting judgment on demonetisation
Source Of Info
The Hindu
Date Of Fr
2017-02-24

Remembering Demonetisation on its Fourth Birth Anniversary

Remembering Demonetisation on its Fourth Birth Anniversary
Source Of Info
Taxguru
Date Of Fr
2020-11-08

With no Constitution bench set up yet, challenges to demonetisation now an ‘academic exercise’

With no Constitution bench set up yet, challenges to demonetisation now an ‘academic exercise’
Source Of Info
https://theprint.in/judiciary/with-no-constitution-bench-set-up-yet-challenges-to-demonetisation-now-an-academic-exercise/579203/
Date Of Fr
2021-01-05