NEW DELHI — The Delhi High Court on Monday dismissed a petition filed against the Reserve Bank of India (RBI)'s decision to withdraw INR 2,000 notes from circulation.
A division bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad rejected petitioner lawyer Rajneesh Bhaskar Gupta's plea filed as a Public Interest Litigation (PIL) challenging RBI's decision arguing that it lacks the independent authority, as per the RBI Act to make such a decision.
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The petitioner had earlier argued that the RBI cannot withdraw from circulation or discontinue banknotes and only the Centre has such powers.
On May 29, the High Court had dismissed a similar plea by petitioner lawyer Ashiwini Upadhyay challenging RBI and State Bank of India (SBI) notifications, that permits exchange of the withdrawn INR 2,000 notes without any identity proof.
The court had dismissed the plea observing that decision to dispense with INR 2,000 denomination banknotes is not a decision towards demonetisation.
Gupta, however, had argued that RBI has no independent power to direct non-issuance or discontinuance of banknotes of any denominational value and this power is vested only with the Central government under section 24 (2) of the RBI Act, 1934.
[bsa_pro_ad_space id=1]He had said: “The RBI’s power is restricted only to issue and re-issue banknotes under section 22 and 27 of the RBI Act, but the period for issuing such notes is fixed by the Central government."
Gupta had contended that the withdrawal of the banknotes after 4-5 years, with a specific deadline, is deemed "unjust, arbitrary, and contrary to public policy".
"This is beyond the jurisdiction of the RBI. There is no provision in the RBI Act saying that RBI can take such a decision independently. I would have understood if the central government had taken the decision," the petitioner had earlier said.
His PIL argue that the RBI has provided no explanation other than the "Clean Note Policy" for taking such a significant and arbitrary step of withdrawing the banknotes from circulation, without adequately considering the potential repercussions for the general public.
The plea raised concerns over the impact of withdrawing the INR 2,000 banknote, claiming that small vendors and shopkeepers have already ceased accepting it.
A copy of detailed order is awaited.