Gujarat HC seeks response from Centre, RBI on PIL challenging legality of demonetisation

The petitioner questioned legality of Centre's decision to demonetise Rs 500 and Rs 1000 currency notes, saying it cannot be carried out merely on the basis of a gazette but an Act is required to be passed through Parliament.

By: PTI | Ahmedabad | Published:November 30, 2016 5:58 pm
demonetisation, note ban, ban of 500 and 1000 rupees, gujarat petition against demonetisation, reserve bank of india, RBI, Gujarat high court, India news, Indian Express The petitioner raised the question on legality of Centre’s decision to demonetise Rs 500 and Rs 1000 currency notes, saying it cannot be carried out merely on the basis of a gazette but an Act is required to be passed through Parliament. (AP Photo/Bikas Das, File)

The Gujarat High Court has sought response from the Centre and RBI on a PIL challenging the legality of demonetisation and exclusion of district cooperative bank account holders from exchanging or withdrawing currency notes.

A division bench of Chief Justice R Subhash Reddy and Justice V M Pancholi sought the response on a PIL moved by farmers’ body Gujarat Khedut Hitrakshak Samiti, and kept the matter for hearing on December 5, together with another PIL on the same issue by Bhavnagar District Cooperative Bank that was heard yesterday by the high court.

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The petitioner raised the question on legality of Centre’s decision to demonetise Rs 500 and Rs 1000 currency notes, saying it cannot be carried out merely on the basis of a gazette but an Act is required to be passed through Parliament.

Citing the example of demonetisation carried out in 1978, the petitioner said the then Morarji Desai government had issued an ordinance and passed an Act in Parliament to make
currency notes of Rs 1000, Rs 5000 and Rs 10,000 illegal.

“According to section 26 (2) of the RBI Act, only a certain series of currency notes of particular denominations can be demonetised, and not entire currency notes,” the petitioner said, adding that the government’s order is illegal and unconstitutional.

The petition also challenged the limitation imposed on bank account holders from limitation on withdrawals, saying that the Centre has no right to pass such an order.

It further said that DCCBs are on par with nationalised or private banks as all these banks registered with the RBI are guided by the same Act.

“All the banks have been registered under the same section of the RBI Act and hence, RBI cannot discriminate among them. Rights taken away from the DCCBs to allow their account
holders from withdrawing or exchanging currency notes are illegal,” the petitioner said.