Delhi High Court: A PIL was filed by Ashwini Kumar Upadhyay (petitioner) seeking a declaration that the RBI Notification dated 19-05-2023 and SBI Notification dated 20-05-2023, which permits the exchange of Rs. 2000 denomination banknotes without obtaining any requisition slip and identity proof, is arbitrary and violative of Article 14 of the Constitution of India. A division bench of Satish Chandra Sharma CJ., and Subramonium Prasad, J., dismisses PIL seeking RBI decision to withdraw 2000 denomination banknotes from circulation as arbitrary because the decision of the Government is only to withdraw Rs. 2000 denomination banknotes from circulation for the reason that the purpose of issuing these denominations has achieved its purpose which was to meet the currency requirement of the economy in an expeditious manner in November, 2016 when all Rs. 500 and Rs. 1000 denomination banknotes were declared to be not legal tender and in order to meet the situation at that point of time, the Government took a decision to bring banknotes of Rs. 2000 denomination to ensure adequate supply of money to meet the day-to-day requirements of the people.
The petitioner submitted that out of the total denomination of Rs. 2000 banknotes, at present Rs. 3.62 lakh crores banknotes are in circulation and are not being commonly used for transactions. Such notes are primarily black money which has been hoarded by the separatists, terrorists, maoists, drug smugglers, mining mafias, and corrupt people. The total population of India is around 142 crores and out of which 130 crores people have Aadhar Card which means that every family has 3-4 Aadhar Cards. Out of the total 225 crore of bank accounts, 48 crore bank accounts are Jan Dhan accounts of the people who are below the poverty line. Thus, by not insisting on any form of identification at the time of exchange of Rs. 2000/- denomination banknotes to other denomination banknotes, the Government is encouraging persons who are indulged in Benami transactions, money laundering, and drug trafficking etc., and therefore, this decision of the Government must be struck down by the Court.
The Court noted that on perusal of the notification issued by RBI shows that Rs. 2000 denomination banknotes were introduced in November 2016 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. 1000 banknotes in circulation at that time and the objective of introducing Rs. 2000 banknotes was met once banknotes in other denominations became available in adequate quantities.
The Court further noted that the notification also indicates that about 89% of Rs. 2000 denomination banknotes was issued prior to March 2017 and the same are at the end of their estimated life-span of 4-5 years. At present, Rs. 2000 denomination banknotes worth Rs. 3.62 lakh crores are in circulation and because they are not commonly used for transactions thus, the Government has decided to withdraw these Rs. 2000 denomination banknotes from circulation.
The Court opined that to ensure that there is a smooth transition of Rs. 2000 denomination banknotes, which continue to be a legal tender till September 2023 i.e. for four months, banks have provided facilities for conversion of these banknotes to other denomination banknotes. The Government has taken a decision not to insist upon the requirement of identity proof for the exchange of Rs. 2000 denominations banknotes so that everybody can exchange the same with the other denomination banknotes. Therefore, it cannot be said that the decision of the Government is perverse or arbitrary or it encourages black money, money laundering, profiteering or abets corruption.
The Court held that the impugned 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.
[Ashwini Kumar Upadhyay v Union of India, 2023 SCC OnLine Del 3218, decided on 29-05-2023]
Advocates who appeared in this case :
Mr. Chetan Sharma, ASG with Mr. Apoorv Kurup, CGSC, Mr. Amit Gupta, Mr. Saurabh Tripathi, Mr. Aakansh Srivastava, Mr. Vikramaditya Singh and Ms. Apoorva Jha, Advocates for UoI. Mr. Parag P. Tripathi, Senior Advocate with Mr. Ramesh Babu, Ms. Nisha Sharma, Ms. Tanya Chowdhary and Ms. Vashundhara Bakhru, Advocates for RBI Mr. Rajiv Kapur, Mr. Akshit Kapur and Mr. Tushar Bagga, Advocates for SBI.