Demonetisation: Delhi HC to hear plea against 'unconstitutional' currency ban

Delhi High Court agreed to hear a plea against demonetisation, saying once the currency was invalidated then how could the government direct certain public utilities including hospitals and petrol pumps to accept old notes.

PTI November 21, 2016 15:50:42 IST
Demonetisation: Delhi HC to hear plea against 'unconstitutional' currency ban

New Delhi: Delhi High Court on Monday agreed to hear a plea against demonetisation, saying once the currency was invalidated then how could the government direct certain public utilities including hospitals and petrol pumps to accept old notes.

A bench of Justices BD Ahmed and Jayant Nath are listed for hearing the plea on Tuesday, which also sought discontinuation of the new Rs 2,000 currency note, terming the move as "unconstitutional and bad in law".

Petitioner Pooja Mahajan, running a designer showroom, mentioned the matter pleading urgency on the ground that she is being deprived of earning her livelihood and her fundamental rights are being infringed.

She also blamed the government for taking a dual stand saying on one hand it was encouraging people to deposit old notes in bank accounts and on the other hand threatening them of prosecution for depositing over Rs 2.50 lakh.

Advocates, A Maitri and Radhika Chandrashekhar, counsel for the petitioner, urged the court to quash various notifications with regard to demonetisation issued on and after 8 November, saying they are in contravention of the Constitution of India and Reserve Bank of India (RBI) Act.

Demonetisation Delhi HC to hear plea against unconstitutional currency ban

Representational image. PTI

Section 24 of RBI Act deals with denomination of notes which empowers the RBI and Centre to issue bank notes for various denominations as mentioned in section 24 (1) and (2) of the Act, the plea said.

"Till date, government has not issued any notification under section 24 (2) of the RBI Act for discontinuing currency notes of Rs 500 and Rs 1,000."

It further said that Rs 2,000 notes are being circulated by the government against mandate of section 24(1) of the Act.

Seeking direction to Ministry of Finance, the petitioner said the government's decision is "arbitrary and unconstitutional" as on one hand it has cancelled the currency notes of Rs 500 and Rs 1,000 but simultaneously circulated high denomination notes of Rs 2,000 without the mandate of RBI Act.

The petitioner also alleged that "on the pretext of exchange of notes, government cannot prosecute and misuse the provisions of Income Tax Act by treating the cash deposit for exchange as unaccounted money".

As per Section 24 (1) of the RBI Act, bank notes shall be of denominational value to Rs 2, Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 or of such other denominational values, not exceeding Rs 10,000 as the Central Government may, on the recommendation of the Central Board, specify in this behalf.

Section 24 (2) of the Act says the Centre may, on the recommendation of the Central Board, direct the non-issue or the discontinuance of issue of bank notes of such denominational values as it may specify in this behalf.

Prime Minister Narendra Modi had on 8 November announced the demonetisation of Rs 1,000 and Rs 500 notes with effect from midnight, making these notes invalid in a major assault on black money, fake currency and corruption.

Updated Date:

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