Supreme Court judge dissented on demonitisation calling it ‘unlawful’

New Delhi: Justice BV Nagarathna strongly dissented today after a Supreme Court Constitution bench, by a 4:1 majority, upheld the demonetisation decision by the Narendra Modi-led Centre, saying that the government’s notification on demonetisation was “unlawful” and the process of banning all currency notes of 1,000 and 500 could not have been initiated by the Centre.

She deemed the government’s November 8, 2016 notification as “unlawful” and agreed with the petitioners challenging it, saying that the RBI’s central board should have independently recommended demonetisation rather than acting on the advice of the government per section 26 of the Reserve Bank of India Act. She maintained that the RBI did not exercise any mental initiative on its own.

“Demonetisation by notification on November 8 was, in my opinion, illegal. Demonetisation was “an exercise of power, contrary to law, and therefore unlawful,” she continued, but “status quo ante cannot be restored now since it was in 2016.” “.

She clarified that she is not challenging the ‘noble objectives’ of the exercise per se, but rather the legality of how it was carried out.

“Unquestionably, good intentions were at the heart of the demonetisation. Good motives and high aspirations are not being contested. Demonetisation has been deemed unlawful only on a legal analysis, she said, adding that the decision was “well-intentioned and well thought out.” “. She elaborated that it aimed to combat problems like counterfeiting, money laundering, and financing of terrorism.

Petitioners’ central argument was that “as per RBI Act, recommendation for demonetisation should originate from the board of the Reserve Bank of India,” but in this case, the Centre wrote a letter to the RBI on November 7 advising for such a recommendation.

Like previous cases, Justice Nagarathna found that the Demonetisation could have been initiated by an Act of Parliament rather than an executive notification.

As Justice Nagarathna explained after reviewing the evidence provided by the Centre and RBI, phrases like “as desired by Centre government” indicate that the RBI did not exercise its own judgement.

According to the majority of commentators, there is a “built-in safeguard” in which the Centre must act in consultation with the Reserve Bank of India (RBI). The four judges took note of the six months of communication between the parties.

The government’s notes ban was challenged in 58 petitions to the Supreme Court, all of which argued that the ban should be overturned because it was an arbitrary and capricious decision by the government.

In its previous filing, the government argued that the court lacked jurisdiction because no actual remedy existed. It would be like “putting the clock back” or “unscrambling a scrambled egg,” the centre said.