Victory For Modi Govt: Supreme Court Rules 2016 Demonetisation Valid

New Delhi: In a major ‘victory’ for the BJP-headed Central government, the Supreme Court on Monday upheld Prime Minister Narendra Modi’s 2016 demonetisation decision, in a majority judgment.

The decision to ban notes can’t be faulted just because the Centre initiated it, and the demonetisation exercise can’t be struck down on grounds of proportionality, the five-judge Constitution bench ruled in a 4:1 decision.

The lone dissenting judgment was that of Justice BV Nagarathna, who said that though the Centre has the power, it should have executed the demonetisation process through an act of Parliament and not by the government.

Headed by Justice SA Nazeer, the other members of the bench were Justices BR Gavai, AS Bopanna and V Ramasubramanian.

The majority judgment said that the period of 52 days given for the exchange of notes was not unreasonable. They observed that there was due consultation between the two for six months

Centre is required to take action after consultation with the Reserve Bank of India (RBI) and there was due consultation between the Centre and Reserve Bank of India (RBI) for six months.

A total of 58 petitions were filed, challenging the Central government’s announcement on November 8, 2016, to ban Rs 1,000 and Rs 500 currency notes. The petitioners had argued that it was not a considered decision of the government and should be struck down by the court.

The government said that the Supreme Court can’t decide a matter when no tangible relief can be granted, arguing that it would be like “putting the clock back” or “unscrambling a scrambled egg”, NDTV reported.

The government also reiterated its previously stated objective that demonetisation was a “well-considered” decision to counter fake money, terror financing, black money and tax evasion.

The five-judge Constitution bench heard the arguments before the court’s winter break.