The Supreme Court's constitutional bench today reserved its decision on a batch of petitions challenging the Union Government's decision to demonetize Rs. 500 and Rs. 1000 currency notes six years ago. Justices S Abdul Nazeer, BR Gavai, AS Bopanna, V Ramasubramanian, and BV Nagarathna sat on a Constitution Bench that heard arguments in 58 petitions. The bench set a deadline of December 10 for parties to submit written submissions.

Given that the decision was made six years ago, the bench initially stated that the issue was "academic," and wondered if it could reverse the actions. Following Senior Advocate P Chidambaram's persuasive arguments, the bench agreed to hear the case on merits on 12th October 2022. The bench ordered the Union Government and the Reserve Bank of India to submit all relevant documents and files related to the decision. It was the main contention of Mr. Chidmbaram that the Parliament is the only authorized body to take such a decision and not the executive. It was one of the biggest economic policy decisions of the Government since independence, therefore, it should have been discussed on the floor of parliament. Taking a decision under section 26 of the RBI Act is bad in the eyes of law.

The Attorney General of India, R Venkataramani, appeared on behalf of the Union Government to defend the decision. He mainly argued That the decision was made to combat the evils of counterfeit currency, black money, and terror funding. He claimed that judicial review of economic policy decisions is severely restricted. Even if it is assumed that demonetisation did not produce the desired results, this cannot be used in court to invalidate the decision because it was made in good faith following due process.

Sr. Adv. Jaideep Gupta appearing for the RBI mainly contended that there was a good amount of time was given to people to exchange their 500 and 1000 notes and it was the policy decision of the RBI and the Government to close the window by the end of the year 2016. It was argued that the policy decision was fair and there is no illegality in the process and manner in which the process was initiated. He also argued that Section 26 of the RBI Act empowers the RBI to take such a decision and no separate legislation is required in this regard.

The petitioners' arguments were started by Senior Advocate P Chidambaram. Although the decision's consequences cannot be reversed, the Court should set the precedent for future governments to avoid "similar misadventures." Some petitions were argued by Senior Advocate Shyam Divan, Advocate Prashant Bhushan, and others. Individuals filed petitions seeking an extension of the deadline for exchanging the notes among the petitions.

Case Title: Vivek Narayan Sharma v. Union Of India and other connected matters

Citation: WP (C) No. 906/2016