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Opposing a plea in Delhi HC challenging the RBI’s May 19 notification to withdraw Rs 2,000 currency note from circulation, the central bank on Friday said the decision is not demonetisation but a part of “currency management system”.
The submission was made by senior advocate Parag Tripathi who stated before a division bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad that currently Rs. 2000 notes were not being used really adding that, adding that “this issue of alleged demonetisation was also subject matter of an earlier petition the verdict on which has been reserved by the HC”. He also submitted that this was a matter of “economic policy”.
The RBI further said that this exercise was only for the exchange of notes and that after September 30 (time granted for exchanging the notes), a decision may be taken after seeing a result of the exchange.
In its notification, the RBI had said that notes will continue to be legal tender adding that the existing Rs 2,000 notes can be deposited or exchanged in banks until September 30 to complete the exercise in a time-bound manner and to provide adequate time to the members of public; but set a limit of “Rs 20,000 at a time”.
The petitioner, Rajneesh Bhaskar Gupta, in his plea has said that the central bank has no independent power under the Reserve Bank of India Act, 1934, to direct the non-issue or the discontinuance of issue of bank notes of any denominational value and the said power is vested only with the Central Government under Section 24 (2) of the RBI Act.
The petitioner also submitted that the November 8, 2016, decision was a gazette notification issued by the Central Government pursuant to which RBI issued notification. It was submitted that in this case there was no gazette notification by Centre and even if there is one, the public does not know about it.
The HC has listed the matter for May 29. Among other reliefs the plea seeks quashing of the RBI notification and all other subsequent notifications calling the decision “arbitrary” and “unreasonable”.
The plea states that the RBI has not “cleared so far that what is the benefit to the RBI or national economy” after withdrawing the Rs 2,000 banknote from circulation. “However the hardship to the citizen of the country is very well known and seen during the demonetization of denomination of Rs.500 and Rs.1000 in 2016 and withdrawal of Rs.2000 is not much different from previous demonetization,” it says
On Tuesday, the HC reserved orders in a PIL challenging notifications issued by the Reserve Bank of India and the State Bank India “in so far” as it permits exchange of Rs 2000 banknotes without obtaining any requisition slip and identity proof as arbitrary and against Articles 14 of the constitution.
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