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Law matters, not PM’s word: A-G to SC on note ban deadline

"There is no question of PM’s speech...if PM says March 31, 2017 but the law says December 30, 2016, the law will prevail over the PM. Let’s be clear about that first,” the A-G submitted before a bench led by Chief Justice of India J S Khehar

Written by Utkarsh Anand |
Updated: March 21, 2017 10:00:09 pm
Mukul Rohatgi, AG Mukul Rohatgi, demonetisation, Mukul Rohatgi demonetisation Attorney General Mukul Rohatgi. PTI Photo

The Central government’s top law officer, Attorney General Mukul Rohatgi, told Supreme Court Tuesday that the “law will prevail over” Prime Minister Narendra Modi in deciding that people cannot be allowed to deposit demonetised currency after December 30, 2016. Rohatgi’s statement came in the wake of contentions that the government had wronged the people by issuing an ordinance to restrict the deposit of demonetised currency till December 30, 2016, after the Prime Minister had declared that old notes could be deposited till March 31, 2017.

“There is no question of PM’s speech…if PM says March 31, 2017 but the law says December 30, 2016, the law will prevail over the PM. Let’s be clear about that first,” the A-G submitted before a bench led by Chief Justice of India J S Khehar. The bench said the “nation has to know” through an affidavit whether the government was willing to give another chance to people to deposit old currency and if not, why.

As the bench, also comprising Justices D Y Chandrachud and Sanjay K Kaul, referred repeatedly to the Prime Minister’s speech of November 8, Rohatgi sought to assert that after the ordinance, position had changed in law and that all that had to be looked into now was the effect of the The Specified Bank Notes (Cessation of liabilities) Ordinance, 2016’. “We are not at the PM’s speech anymore. We are at a law and the law says you cannot deposit it after December 30 if you don’t fall in the category of people who were abroad. Neither the PM nor the RBI Governor can now exercise discretion or jurisdiction to entertain the requests for extending the deadline now,” said the AG when the bench questioned why was the deadline changed after Modi’s assurance.

The court was hearing a clutch of PILs, which questioned the “propriety and reasonableness” of the ordinance whereby the RBI was absolved of its liability to accept demonetised notes of Rs 500 and Rs 1,000 despite a promise made by the Prime Minister on November 8, 2016, in his “address to the nation” to announce the demonetisation policy.

The petitioners have contended that they wanted to deposit the old currency which they could not do owing to various concrete reasons while the deadline was abruptly preponed. The bench pointed out that even in the ordinance, there was a provision empowering the government to open another window for allowing people facing hardship to deposit old currency.

As Rohatgi said that the government was of the view that they did not require to relax the condition anymore, the court retorted: “You cannot keep people in the lurch…why did you have this clause? You have the discretion but you cannot exercise this discretion arbitrarily. Your arguments seems to suggest ‘I the final authority and I have decided I won’t do it’. That should not be the way.” But Rohatgi maintained that the Parliament had given a discretion to the government to use its power to relax the deadline and there were “no good reasons” to do it.

At this, the bench said: “The government cannot close its minds arbitrarily. Parliament has given you this discretion so that you can use it reasonably. You can reject all the cases but you should at least examine them. The other thing is that you issued this ordinance on December 30, 2016, which was the last day. People don’t even get a notice that this window will close suddenly while everybody knew of the PM’s speech and the RBI circular that followed it, fixing a deadline of March 31, 2017.”

Rohatgi replied that there was no requirement to give a notice before bringing in a new law and that the law was clear that old currency was now as good as “scrap of papers”. The bench said that the government should also realise that these people were in “dire circumstances” since they could be prosecuted for holding old currency if they failed to establish they had this money on the cut-off date. “Understand, not all and sundry can come to you when there is a fear of being prosecuted. There could only be 30-40 such cases…you file your affidavit explaining whether the central government wants to exercise its discretion and give another window to the people to deposit old currency, and if not why,” the bench told the AG.

It has asked the government and the RBI to file their affidavits in two weeks and fixed the matter for hearing next on April 11. The bench, however, also clarified that it was not going to give any protection from prosecution to petitioners if their holding the old notes was eventually found to be illegal.

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