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RBI to Bombay High Court: ‘Will hold old notes from lockers, inventories under orders’

The high court has listed additional safeguards to ensure that this assurance is not misused by people.

Written by Ruhi Bhasin | Mumbai | Published: February 14, 2017 1:37:52 am
rbi, reserve bank of india, bombay high court, bombay hc, old note, old note ban, demonetisation, note withdrawal, indian express news, bank lockers, economy Reserve Bank of India

The Reserve Bank of India (RBI) has informed the Bombay High Court that it will continue to “hold” withdrawn currency notes in all future cases where such notes are found in bank lockers and have been inventoried under orders of a court. Regarding exchanging such notes, the RBI said it has sought clarification on the matter from the Centre if an exception could be made for such cases. The high court has listed additional safeguards to ensure that this assurance is not misused by people.

“The additional requirement is that it must be ascertained and confirmed in advance that none of the disputants before the court had access to the locker or vault in question after November 8, 2016,” said Justice Gautam Patel.

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He stated that it was not reasonable to expect the RBI to always give value to demonetised currency found in a locker that has been accessed after November 8, 2016 without such further enquiries as it thinks fit. “Lockers or vaults accessed after November 8, 2016, and those not accessed after that date will stand on different and distinct footings and will need to be dealt with differently,” the Judge said.

The court was further informed that the RBI had sought for a clarification from the Centre to look at issuing a notification seeking exemption in such cases as per clause in the ordinance relating to demonerisation.

“The RBI may place a copy of this order before the appropriate central government authority if the RBI thinks fit. Till the clarification is obtained, RBI’s undertaking to hold the physical currency notes is accepted,” said the court.

The high court was hearing a case where the wife of a man had approached the HC with a testamentary petition on her husband’s will, and requested the court to intervene as she suspected his locker might have demonetised currency notes.

On December 20, 2016, Justice G S Patel ordered that the locker, in Kotak Bank, be opened in the presence of an officer of the court and that the old notes be exchanged by approaching the RBI. However, the RBI refused to exchange the notes as the December 31, deadline had passed. The high court had then come down heavily on the RBI for not complying.

An affidavit was then submitted by RBI before court on February 7. RBI counsel V Dhond informed the court that it “will hold in physical form” any such notes found in bank lockers.

Meanwhile, the court came up with further requirements to safeguard the process.

“The inventory must be under an order of the court and must be carried out in the presence of an officer of the court. There should be a statement either noted in the order or in an affidavit accepted by the court that none of the parties to the disputes nor any of the signatories to the bank locker or vault (including the deceased) had access to the locker or vault in question after November 8, 2016. Moreover, the court officer in whose presence the locker or vault is inventoried must make a note of the serial numbers of all currency notes found(though this may be cumbersome) and sign this listing and inventory,” ordered the court.

An authenticated copy of this signed inventory will be made available to the RBI, in addition to the parties. A copy of the bank’s access records will also be supplied to RBI.

“I believe all this is necessary since I anticipate that in the weeks ahead there will be several such cases. A party may need to apply to court for inventory of a locker held in the name of the deceased, or forming part of the deceased’s estate. The heir who applies may not know what the locker contains. On inventory, should the contents of the locker be found to include demonetised currency, then it is obviously in the interest of the estate, the heirs and perhaps even the banking system, that some value should be given to this currency and have it brought back into circulation,” observed Justice Patel.

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