The SC's order came in response to a petition filed on November 10, against the government's November 8 announcement of demonetizing Rs 500 and Rs 1000 notes.
The Chief Justice of India signed off on his last working day by questioning the constitutional validity of the demonetization of Rs 500 and Rs 1,000 notes and the legality of the implemented policies as announced by Prime Minister Narendra Modi.
A three-judge bench comprising of the chief justice along with Justices AM Khanwilkar and DY Chandrachud refused to "interfere" underlining that these were "matters of fiscal policies" and declined to issue any interim direction. The top court placed their faith in the government's assurances that things would look up at the end of the 50th day on December 31. The apex court also stayed all ongoing petitions in the various high courts across the country and transferred them to a five-judge constitutional bench.
The SC's order came in response to a petition filed on November 10, against the government's November 8 announcement of demonetizing Rs 500 and Rs 1000 notes. Two petitions were filed by Delhi-based lawyers Vivek Narayan Sharma and Sangam Lal Pandey, while two others were filed by individuals, S Muthukumar and Adil Alvi. All petitioners, seeking a stay on demonetization, had alleged that the sudden decision created chaos and harassment to the public at large.
The top court further framed questions on law after extensively hearing the matter by understanding the matter from a legal and political point of view from the Attorney General (AG) Mukul Rohatgi and by hearing the pains suffered by the common man from advocate Kapil Sibal representing the petitioners who filed the PIL.
Though there is no immediate relief to the common man, the court has however started a debate on the constitutionality of passing such notifications. The bench touched upon the various issues the common man was plagued with and made observations.
Withdrawal limit
The denial of right to withdraw the prescribed amount of Rs 24,000 per week despite a Reserve Bank of India (RBI) notification permitting the same was a cause of serious concern, the bench observed. Responding to complaints that banks are refusing to pay full prescribed amount on the ground of non-availability of enough volume of legal tender currency, it said the government was obliged to ensure that "its commitment made under the said notification is implemented without any exception."
Accepting the government's claim that the old demonetized notes will be replaced by new legal tender notes in the form of Rs 500 and Rs 2000 progressively in right earnest, the court directed the authorities to fulfill their commitment, and to review the decision periodically, taking necessary corrective measures.
Issue of secrecy
The top court agreed that the Centre's call to maintain absolute secrecy before declaring Rs 500 and Rs 1,000 notes illegal was imperative to "unearth the black money or unaccounted money and to dry up the terror fund and defeat the attempt of circulation of large-scale counterfeit currency."
The bench accepted that to maintain secrecy, new currency notes could not be printed well in advance.
District & co-op banks
The Bench accepted the Centre's assurance that the RBI would credit the entire amount offered by the District Cooperative Banks for exchange after due verification in the form of demonetized notes, with the commensurate amount of legal tender notes.
Exemption period
The apex court hoped that the government would be "sensitive" to the needs of the common man observing that the decision to extend the exemption period to use demonetized notes at specified counters, even in case of emergency situation like hospitalization, travel by rail or air etc. was best left to the government. The Bench advised the government to take a "sympathetic" approach to the exemption of using the demonetized currency for emergencies.
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