new Delhi: Demonetisation in 2016 took a toll on India’s economy and turned out to be a nightmare for many. As a result, many people filed a petition against the decision arguing that it was not a ‘considered’ decision of the government and should be quashed. Today, January 2, 2023, the Supreme Court is likely to pronounce its verdict on a petition challenging the decision to ban Rs 500 and Rs 1,000 notes. This decision badly affected the economy of India. A five-judge constitution bench headed by Justice SA Nazeer heard 58 petitions challenging demonetisation in 2022.
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Here’s what we know so far about the backlash against the government’s decision on demonetisation:
– Demonetisation created a lot of confusion and chaos across the country and as a result, forty-eight petitions were filed in the Supreme Court challenging demonetisation, arguing that it was not a ‘considered’ decision of the government and that the court should put it down . ,
However, the government has argued that the court cannot decide a matter when no concrete relief can be given. It would be like “turning back the clock” or “unraveling a scrambled egg”, the Center said.
A five-judge constitution bench headed by Justice SA Nazeer heard the arguments before its winter break and adjourned the judgment to December 7.
In its defence, the Center said demonetisation was a “well thought out” decision and part of a larger strategy. He further said that the decision was taken to tackle the menace of counterfeit money, terror financing, black money and tax evasion.
Former Union minister and senior advocate P Chidambaram argued that the Center has not examined alternative methods to control fake currency or black money.
The government, it said, cannot initiate an offer on legal tender on its own. This can be done only on the recommendation of the Central Board of the Reserve Bank of India (RBI), he said.
According to reports, the Center was also withholding important documents on the decision-making process, including the November 7 letter to the Reserve Bank and minutes of the bank’s central board meeting, Chidambaram argued.
When the bank’s counsel argued that judicial review cannot apply to economic policy decisions, the court said the judiciary cannot sit with folded hands just because it is an economic policy decision.
RBI’s view on demonetisation: The RBI acknowledged that there were “temporary difficulties” which are part of the nation-building process.
Opposition parties allege that demonetisation was a failure of the government, businesses were being destroyed and jobs were being lost. Congress President Mallikarjun Kharge said, six years after the ‘masterstroke’, the cash available with the public is 72 per cent more than in 2016.