Justice B V Nagarathna of the Supreme Court, who gave a dissenting verdict on demonetisation on Monday, said the scrapping of the whole series of Rs 500 and Rs 1,000 currency notes had to be done through a legislation and not through a gazette notification as Parliament cannot be left aloof in a matter of such critical importance.
Justice Nagarathna, who was the juniormost judge in the Constitution bench also comprising justices S A Nazeer, B R Gavai, A S Bopanna and V Ramasubramanian, said the demonetisation of an entire series of notes at the Centre’s instance is a far more serious issue that has wider implications on the economy and the citizens of the country.
The judge noted that there was no application of mind on the part of the Reserve Bank of India (RBI) while considering the demonetisation proposal sent by the Central government.
“Looking at the records submitted by RBI, it is noted that it says “as recommended by the Central government”. This shows there was no independent application of mind by the RBI. Such a proposal with serious economic ramifications must be placed before the Central Board of Bank so that there is an application of mind by the experts.”
Supreme Court Justice BR Gavai, while upholding Centre’s 2016 move to demonetise Rs.500 and Rs.1,000 currency notes, said, “It is not relevant whether the objective (of note ban) was achieved or not.” He said the process of decision-making on the move “cannot be flawed” as there was consultation between Centre and RBI. The move was upheld by a 4:1 vote.
Former Finance Minister and senior lawyer P Chidambaram, who represented a few petitioners challenging Centre’s 2016 decision to ban Rs.500 and Rs.1,000 notes, said, “Once the honourable Supreme Court has declared the law, we are obliged to accept it.” He added, “We are happy that the minority judgment has emphasised the important role of Parliament in a democracy.”