Demonetisation: SC again questions Centre, RBI on not allowing banned note deposits until 31 March

Everybody knew about what the prime minister said on 8 Nov but no one saw the ordinance coming; no notice was given to people on the closure of deposit window, said the court

FP Staff March 21, 2017 15:45:42 IST
Demonetisation: SC again questions Centre, RBI on not allowing banned note deposits until 31 March

The Supreme Court on Tuesday asked the Narendra Modi government and the Reserve Bank of India (RBI) why a separate category was not crated for those who couldn't deposit demonetised notes by 30 December 2016. The apex court asked the government and RBI to file affidavits explaining  this within a period of two weeks.

According to media reports, attorney general Mukul Rohatgi, the provision given to common public to exchange Rs500, Rs1000 notes till 31 March (as promised by Prime Minister Narendra Modi in his 8 November speech) became irrelevant after the promulgation of the ordinance on 28 December by the central government.

Rohtagi also told the court that the earlier notification was clear that the deposits will be allowed only until 30 December and that no rights were created for continuing the deposits in old currencies post that date.

Demonetisation SC again questions Centre RBI on not allowing banned note deposits until 31 March

Reuters

However, the court observed that the notification banning the notes indeed said, those unable to deposit old notes by 30 December, will be given chance beyond that date. Also, everybody knew about the prime minister's speech but no one saw the ordinance coming, the SC observed. The apex court also pointed out that no notice was given to people on the closure of deposit window prior to the promulgation of ordinance.

SC's observations are significant as people are still queuing up before the RBI counters to deposit the old invalidated notes they couldn't deposit/exchange in banks within the permitted period.

Media reports subsequently had highlighted the plight of the common man. One such report in The Indian Express, said many, including a soldier who was posted at the Siachen during the entire period of demonetisation, were waiting in front of the central bank in Delhi to make deposits of the old notes. However, the RBI is not accepting any such deposits saying only NRIs are allowed to use this window.

The government promulgated the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016, on 28 December going by which possession of old Rs 1,000 and Rs 500 notes after 31 March beyond a threshold amount is a criminal offence that will attract a monetary fine of Rs 10,000 or five times the cash held, whichever is higher.

The Ordinance said that only those who were abroad, the armed forces personnel posted in remote areas or others who can give valid reasons for not being able to deposit the cancelled notes at banks can deposit the demonetised currency notes till March 31 at RBI counters. Besides, the Ordinance also provided for amending the RBI Act to enable legislative support for extinguishing the demonetised banknotes that are not returned.

On 7 March, the SC bench comprising Chief Justice J S Khehar and Justices D Y Chandrachud and S K Kaul had taken note of the alleged tweaking of rules by the Centre and the RBI on exchanging demonetised currency notes and sought their responses on why old ones were not accepted until 31 March as promised earlier.

The PM's 8 November address to the nation and subsequent notification of the RBI that the devalued currency notes can be exchanged at RBI offices even up to 31 March 2017 were valid assurances which stood breached by the ordinance, the counsel for petitioner Sudha Mishra had told the court.

Of the Rs 15.4 lakh crore worth of currency that was scrapped, Rs 12.44 lakh crore has been deposited in banks or exchanged until 10 December, as per the RBI data.

With PTI inputs

Updated Date:

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