Holding of more than 10 banned Rs 500 and Rs 1,000 notes will be a criminal offence from tomorrow for all, including those who were abroad during the demonetisation period (8 November-30 December) as the deadline to exchange such notes ends today (31 March).
As per the Specified Bank Notes (Cessation of Liabilities) Act, 2017, passed by Parliament last month and notified earlier this month, holding of more than 10 scrapped notes is punishable with a minimum fine of Rs 10,000.
The deadline to exchange the notes for people other than NRIs had ended on 31 December itself as the Reserve Bank of India was refusing to entertain any such requests from 1 January itself. The exchange of such notes were possible only at the RBI counters after 31 December.
According to reports, many are still queuing up in front of the RBI to exchange the notes even now. The decision to not allow exchange of the banned notes after 30 December came as a shock to the common man as Prime Minister Narendra Modi had in his demonetisation speech promised time until 31 March for the exchange.
However, just ahead of the end of demonetisation deadline of 30 December, the government promulgated an ordinance that made holding of a specified number of the scrapped notes an offence. The ordinance was later made into an Act of law in Parliamentary.
The law prohibits the holding, transferring or receiving of scrapped notes from 31 December 2016 and seeks to confer power on the court of a first class magistrate to impose penalty.
The law was passed with a view to eliminating the "possibility of running a parallel economy" using the old Rs 500/1,000 notes that have been demonetised.
The law, signed by President Pranab Mukherjee on 27 February, also provides for a minimum fine Rs 50,000 for false declaration by persons who were abroad during the demonetisation period (9 November-30 December, 2016) and given time to deposit such scrapped notes with RBI till 31 March.
With the law coming into force, possession of more than 10 pieces of the old notes by individuals and more than 25 pieces for study, research or numismatics purpose will be a criminal offence, attracting fine of Rs 10,000 or five times the cash held, whichever is higher.
The Act also ends the liability of the Reserve Bank and the government on the demonetised currency notes.
Meanwhile, the Supreme Court earlier this month sought to know from the Centre why it chose not to create a separate category for those who couldn't deposit demonetised notes by 30 December 2016 unlike the NRIs and people who were abroad.
Petitioner, Sudha Mishra, had argued that the Prime Minister's address to the nation on the evening of 8 November 2016 and subsequent notification of the RBI had valid assurances that banned noted can be exchanged at RBI offices even up to March 31, 2017. The ordinance breached these promise, he said.
It is in response to this a bench comprising Chief Justice J S Khehar raised the question why a separate category was not created.
"Prime Minister in his address had said that people with genuine difficulties can deposit the demonetised currency even after December 30, 2016, till March 31, 2017 with the RBI branches. Give us the reasons why despite having powers under the law, you did not create a category for those people who couldn't deposit the demonetised notes before December 30, 2016" the bench said.
The apex court bench also comprising Justices D Y Chandrachud and S K Kaul said that the PM's address had given hope that those in difficulty would get a chance, till March 31, 2017, after giving valid reasons.
It also said that the government should file an affidavit by 11 April explaining the reason why the window was not created for the people having difficulty and the chance was only given to NRIs and the citizens who travelled abroad.
The SC also asked the Centre whether it intends to give a chance to those category of people with genuine reasons to deposit demonetised currency.
Now for those still holding huge amounts of old notes, the Supreme Court seems to the only hope. But for now, if you have any banned old notes with you, rush to the RBI gates to make a final attempt.
With PTI inputs
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Updated Date: Mar 31, 2017 11:28:58 IST