Huge victory for the Centre, as Supreme Court upholds demonetisation in a 4:1 majority verdict

way2barak, Jan.2: The Supreme Court in a 4:1 majority verdict upheld the govt’s 2016 decision to demonetise Rs 1,000 and Rs 500 denomination notes and said the decision-making process was not flawed. Justice BR Gavai read out the majority verdict on behalf of himself, SA Nazeer, AS Bopanna, and V Ramasubramanian. Justice BV Nagarathna authored a dissenting judgment.

The court said the notification dated November 8, 2016, which announced the decision to scrap the high-value currency notes, cannot be said to be unreasonable and struck down on the ground of decision-making process. The judgment added the records adduced before the court showed there was adequate consultation between the Centre and the Reserve Bank of India (RBI) before the decision was taken. It said, therefore, the move cannot be held to be bad in law just because the proposal emanated from the government and not from the RBI as provided under the RBI Act.

Justice Nagarathna, however, differed from the majority judgment on the point of the Centre’s powers under section 26(2) of the RBI Act. “Parliament should have discussed the law on demonetisation, the process should not have been done through a gazette notification. Parliament cannot be left aloof on an issue of such critical importance for the country,” Justice Nagarathna said.

Reacting to Supreme Court’s decision to uphold the demonetisation policy, former law minister and senior Bharatiya Janta Party (BJP) leader Ravi Shankar Prasad hailed the apex court’s move to junk all 58 pleas against the note ban on Monday saying the court has accepted that government’s decision was within the frame of the law.

Congress leader Jairam Ramesh said, “To say that demonetisation has been upheld by the Honourable Supreme Court is totally misleading and wrong. One Hon’ble Judge in her dissenting opinion has said that Parliament should not have been bypassed.”