HYDERABAD: While submitting that the issuance of notification on Nov 8 for demonetisation of `500 and `1,000 is not violative of the provisions of the Constitution of India, the Reserve Bank of India (RBI) on Thursday told the Hyderabad High Court that giving any prior intimation to the public about demonetisation would have defeated the very purpose of the Central government’s decision.
In this regard, the RBI filed its counter affidavit before the HC, which is hearing batch petitions filed challenging the notification issued by the Centre.
On earlier occasion, a division bench of Acting Chief Justice Ramesh Ranganathan and Justice A Shankar Narayana, while dealing with petitions filed by Venkateswara Rao and K Srinivas of the city challenging the Constitutional validity of demonetisation, and another petition by former minister MV Mysura Reddy challenging the restrictions imposed on withdrawal of cash from banks, directed the respondents - Union of India and RBI to file counter affidavit.
The RBI, represented by its assistant general manager Manabhanjan Misra, in its counter defended its action.
“The impugned notification was issued in the best interests of the country. It also intended to check funding by unaccounted wealth and fake notes which subserve activities such as terrorism and cause damage to the economy and security of the country. Section 26 of the RBI Act does not suffer from arbitrary or unbridled power conferred on the Government of India nor does it suffer from the vice of lack of guidelines in any manner.”
It said that the decision to issue the notification was taken to deal with an emergent situation and the question of giving any prior intimation to the people and calling for objections and conducting public hearings would not arise in such emergencies as any delay in taking a decision or any advance notice about the move would defeat the very purpose of the Central government’s move.
The RBI further stated that apart from having a recommendation by the Central Board of the RBI, the notification was very much within the law. In fact, the Centre indeed has the power to demonetise the currency under section 26(2) of the RBI Act, it noted.
The matter is expected to come up for hearing on Friday.