NEW DELHI: In the aftermath of the RBI’s decision to withdraw currency notes of Rs 2,000 denomination from circulation, two pleas were moved in the Delhi High Court. One petition argued that the Reserve Bank of India (RBI) does not have independent power to do so and it is only acting so under the directives of the Central government.
Another plea, moved by a BJP leader, was against the RBI and State Bank of India permitting the exchange of Rs 2,000 currency notes without producing any identity proof and requisition slip. It expressed the apprehension of “black money hoarded by the separatists, terrorists, Maoists, drug smugglers, mining mafias and corrupt people”. Dismissing this petition, the high court, said the government call is purely a policy decision and courts should not sit as an appellate authority over the decision taken by the government.
The high court, further stated that the “purpose of issuing Rs 2,000 note denominations has been achieved", the purpose was to meet the currency requirement of the economy in an expeditious manner in November 2016 when all Rs 500 and Rs 1,000 denomination banknotes were declared to be not legal tender and in order to meet the situation at that point of time, the Government took a decision to bring banknotes of Rs 2,000 denomination to ensure adequate supply of money to meet the day-to-day requirements of the people,” the court order added.
Another plea strongly opposed the RBIs May 19 decision of withdrawing Rs 2,000 banknotes from circulation. The court has reserved its verdict on this plea. The plea filed by Rajneesh Bhaskar Gupta termed the decision as “arbitrary and unreasonable”, arguing that RBI does not have independent power under RBI Act 1934 to direct non-issuance or discontinuation of the issue of bank notes of any denominational value. The RBI’s power is restricted only to issue and re-issue bank notes under Sections 22 and 27 of the RBI Act, but the period for issuing such notes is fixed by the Central Government, the petitioner argued.
Therefore, all powers of supplying the bank notes, its period of validation and withdrawal from circulation in public, vests only with the Central government. The RBI is only acting under the directives of the Central Government, it was submitted.