Cap on cash withdrawal a decision beyond judicial review: HC

Restrictions on daily withdrawal of cash by bank account holders is a policy decision which is beyond judicial review, the Delhi High Court ruled.

Published: 02nd December 2016 10:05 PM  |   Last Updated: 02nd December 2016 10:05 PM   |  A+A-

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NEW DELHI: Restrictions on daily withdrawal of cash by bank account holders is a policy decision which is beyond judicial review, the Delhi High Court today ruled, in a fillip to the Modi government's demonetisation exercise.

The ruling by a bench of Chief Justice G Rohini and Justice V K Rao came on a plea seeking removal of cap on daily withdrawal of money deposited in banks before demonetisation kicked in. The judges dismissed the petition on the ground that it was "devoid of merit" as there were "no restrictions" for operating the bank account by "non-cash transactions".

"It may be added that the manner in which the decision to withdraw the bank notes of specified amount with effect from November 9, 2016 is to be implemented is a policy decision which is beyond the scope of powers of judicial review," the bench said. "The law is well settled that the court can only interfere if the policy framed is absolutely capricious or not informed by reasons or totally arbitrary and found 'ipse dixit' (a dogmatic and unproven statement) offending basic requirement of Article 14 (equality before law) of the Constitution of India," it said.

The high court's order assumes importance as the Supreme Court is also seized of the matter related to demonetisation and is hearing a batch of pleas challenging the November 8 notification.

The apex court is also hearing the plea of Centre seeking transfer of all the petitions pending before separate high courts to either the Supreme Court or one of the high courts.

In its order, the high court noted that it was a settled principle of law that courts cannot strike down a policy decision taken by government merely because another decision would have been fairer or more logical.

"The wisdom and advisability of the policies are ordinarily not amenable to judicial review unless the policies are contrary to statutory or constitutional provisions or arbitrary or irrational," the bench said. It further said that the restriction imposed under Clause 2 (vi) of the notification on capping of withdrawal was "only with regard to cash withdrawal from the bank account over the counter".

"There are no restrictions or limits for operating the bank account by non-cash method. This is clear from Clause (vii) which provides that there are no restrictions on the use of any non-cash method of operating the account of a person including cheques, demand drafts, credit or debit cards, mobile wallets and electronic fund transfer mechanisms," the bench said.


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