Delhi High Court: In a PIL filed by the petitioner seeking an appropriate writ, order or direction for quashing the notification issued by the Reserve Bank of India vide press release dated 19-05-2023 and all other subsequent notifications whereby the RBI has taken arbitrary unreasonable decision to withdraw the Rs. 2000 denomination banknotes from circulation under the clean note policy. A division bench of Satish Chandra Sharma, CJ., and Subramonium Prasad, JJ., held that the RBI was well within its power to issue the Notification as it is only a direction to the banks not to issue Rs. 2000 banknotes which is well within the right of the RBI.
The present petition seeks an order directing Respondent 1 & 2, i.e. RBI and Ministry of Finance to issue a notification/circular for the public at large clarifying the estimated life span of each denomination of banknote which are presently in circulation and the estimated time/year of being withdrawn from circulation in future by RBI under Clean Note Policy or otherwise. It further seeks an order directing Respondent 1 & 2 to mention year of printing on each banknote but also the estimated life span of such banknote in view of the Clean Note Policy of the RBI. It also seeks to inform the public at large by appropriate notification/circular at least one year before as and when any banknote of any denomination is to be withdrawn from circulation by the Central Govt, or RBI under Clean Note Policy or otherwise.
The Court noted that RBI has not taken any decision for discontinuance of Rs. 2000 banknotes. The press releases further state that deposit of Rs. 2000 banknotes into bank accounts can be made in the usual manner, that is, without restrictions subject to instructions and other applicable statutory provisions. To ensure operational convenience and to avoid disruption of regular activities of bank branches, the exchange of Rs. 2000 banknotes into banknotes of other denominations can be made up to a limit of Rs. 20,000/- at a time at any bank starting from 23-05-2023.
The Court further noted that till the time Rs. 2000 banknotes continue to be a legal tender, it cannot be said that the directions issued by the RBI to various banks not to issue Rs. 2000 banknotes from its currency chests or a request to the public to deposit Rs. 2000 banknotes in their accounts in as much quantity without their being any restriction, is a decision to demonetize Rs. 2000 banknotes. The said decision by the RBI is only to manage the currency notes which are under circulation.
The Court concluded that RBI has only instructed the banks not to issue to its customers notes of Rs. 2000 denomination to ensure that Rs. 2000 banknotes are not in circulation though they remain to be legal tender. The fact that permission to exchange Rs. 2000 notes is available only till 23-09-2023 does not mean that RBI has issued a direction that from 23-09-2023, Rs. 2000 banknotes will be demonetized. The RBI has, therefore, not exceeded the powers conferred to it under the RBI Act or has violated the Banking Regulation Act, 1949.
Thus, the Court held that RBI was well within its power to issue the notification being part of the currency management system, as it is only a direction to the banks not to issue Rs. 2000 banknotes which is well within the right of the RBI. The Circular is not a direction to print or discontinue to print Rs. 2000 banknotes which is the domain of the Central Government and Courts generally do not interfere in policy matters unless the decision is completely arbitrary.
[Rajneesh Bhaskar Gupta v. Reserve Bank of India, 2023 SCC OnLine Del 3819, decided on 03-07-2023]
Advocates who appeared in this case :
Mr. Sandeep P Agrawal, Senior Advocate with Mr. Rishikesh Kumar, Mr. Priyankar Tiwary, Mr. Tanya Chanda, Mr. Tushar Sannu, Advocates with Petitioner-in-person;
Mr. Parag P Tripathi, Senior Advocate with Mr. Ramesh Babu M R, Ms. Nisha Sharma, Ms. Manisha Singh, Ms. Tanya Choudhary, Mr. Rohan Srivastava, Ms. Vasundhara Bhakru, Advocates for R-1;
Mr. Chetan Sharma, ASG with Mr. Apoorv Kurup, CGSC, Mr. Saurabh Tripathi, Mr. Vikramaditya Singh, Mr. Akhil Hasija, Advocates for UOI.
