On July 10, the Supreme Court declined to entertain a plea challenging RBI’s decision permitting citizens to exchange Rs 2000 banknotes, which are being pulled out of circulation, without any requisition slip and ID proof.
A bench of Chief Justice of India DY Chandrachud and Justice PS Narasimha dismissed the plea filed by advocate Ashwini Upadhyay citing it as an “area of executive domain”. “This is the matter of executive policy decision”, the bench said while dismissing the appeal filed against the Delhi High Court order.
He approached the apex court against the Delhi High Court order which dismissed a plea challenging RBI’s decision permitting citizens to exchange Rs 2000 banknotes, which are being pulled out of circulation, without any requisition slip and ID proof.
He moved the apex court against the May 29 order of the High Court which had dismissed his plea.
On May 19, the Reserve Bank of India (RBI) announced it will pull out the Rs 2,000 denomination from circulation as part of a “currency management exercise”. The RBI has given citizens time till September 30 to exchange these notes with those of other denominations.
On May 20, the State Bank of India (SBI), too, instructed its local head offices that the facility of exchange of Rs 2,000 denomination banknotes to all members of the public up to a limit of Rs 20,000 at a time will be allowed without obtaining any requisition slip.
Seeking a stay on RBI and SBI’s notifications, the advocate said that it gives an opportunity to legalise illegal money and hence contrary to the aims and objects of the Prevention of Corruption Act, Benami Transactions Act, Money Laundering Act, Lokpal and Lokayukta Act, CVC Act, Fugitive Economic Offenders Act and the Black Money Act.
“Therefore, Court may stay the notifications so far as they permit the exchange of banknotes without requisition slip and identity proof,” it has stated in its appeal before the top court.
The High Court dismissed Upadhyay’a plea saying, “This decision of the government is purely a policy decision and courts should not sit as an appellate authority over the decision taken by the Government.”
Upadhyay sought a direction to ensure that people deposit Rs 2,000 notes in their “respective bank accounts only, so that no one could deposit the money in others’ bank accounts”.
“A large amount of notes of this denomination has either reached in lockers of individuals or been “hoarded by separatists, terrorists, Maoists, drug smugglers, mining mafias and corrupt people”, he has said in his plea before the High Court.
The RBI has told the High Court that the withdrawal of Rs 2,000 notes is a “statutory exercise” and the decision to enable their exchange was taken for “operational convenience”.
According to the RBI, the Rs 2,000 denomination banknote was introduced in November 2016 primarily to meet the currency requirement of the economy in an expeditious manner, after the withdrawal of the legal tender status of all Rs 500 and Rs 1,000 banknotes in circulation at that time.
Notably, “according to the data received from the banks, the total value of Rs 2,000 bank notes received back from circulation after the announcement on May 19 is Rs 2.72 lakh crore up to June 30, 2023.
“Consequently, Rs 2,000 bank notes in circulation as at the close of business on June 30 stood at Rs 0.84 lakh crore,” the central bank said in statement.
Data collected from major banks indicates that out of the total bank notes in Rs 2000 denomination received back from circulation, about 87 per cent is in the form of deposits and the remaining around 13 per cent has been exchanged into other denomination bank notes.
