Supreme Court's Constitution Bench seeks Centre, RBI response on demonetisation

The Supreme Court's Constitution Bench on Wednesday asked the Centre and Reserve Bank of India (RBI) to file a comprehensive affidavit on the decision to demonetize currency notes of Rs 500 and 1,000 in 2016.

A five-judge bench of Justices Abdul Nazeer, BR Gavai, AS Bopanna, V Ramasubramanian and BV Nagarathna issued notice on all the intervening applications and fresh petitions relating to challenging the Centre's decision to demonetize currency notes of Rs. 500 and 1,000 in 2016.

Counsel for Centre and RBI seeks time to file their respective comprehensive affidavit. The court listed the matter for November 9.

The court said that they will address the main legal issue and then it will take up all these individual issues.

The court direction came after Senior Advocate P Chidambaram stressed that the Court must examine the powers under Sections 24 and 26 of the RBI Act, 1934 as tomorrow if this goes unchallenged they can invoke these powers again.

Senior Advocate P Chidambaram apprised the court that demonetisation in 1978 was by a separate law. He also said whether the demonetisation of this kind requires a separate law, that is not academic as this is a live issue.

Advocate Chidambaram said that in 2016, 86.4 per cent of the legal tender was made illegal.

Senior Advocate P Chidambaram also apprised the court that Section 26 of the RBI Act only relates to the demonetisation of any particular series of banknotes of any denomination, not all series of banknotes.

The lawyer said that one needs legislation to do all series of a denomination.

Senior Advocate also mentioned about the hardships faced by people due to the decision as many people lose livelihoods and jobs.

Various petitions were filed arising from the decision of the Government of India to demonetize the old notes of Rs 500 and Rs1000. One of the petitions was filed by Vivek Narayan Sharma. The petition has challenged the notification dated November 8, 2016.

( With inputs from ANI )