In W.P.(C) 7129/2023-DEL HC-  Courts should not sit as Appellate Authority over decision taken by Govt: Delhi HC junks PIL against RBI’s notification permitting exchange of Rs 2000 notes without any identity proof
Justices Subramonium Prasad & Satish Chandra Sharma [29-05-2023]

Read Order: ASHWINI KUMAR UPADHYAY Vs. UNION OF INDIA & ORS 

Tulip Kanth

New Delhi, May 29, 2023:  While reiterating that the decision taken by the Government in relation to economic policies is not to be ordinarily interfered with unless such decision is manifestly arbitrary, the Delhi High Court on Monday dismissed a PIL seeking for a declaration that the RBI Notification and SBI Notification, which permits exchange of Rs 2000 denomination banknotes without obtaining any requisition slip and identity proof, is arbitrary and violative of Article 14 of the Constitution.

“As stated earlier, this decision of the Government is purely a policy decision and Courts should not sit as an Appellate Authority over the decision taken by the Government”, the Division Bench of Justice Subramonium Prasad & Justice Satish Chandra Sharma asserted.

The petitioner appearing in person submitted that out of total denomination of Rs 2000 banknotes, at present Rs 3.62 lakh crore banknotes are in circulation and are not being commonly used for transactions. These notes are primarily black money and have been hoarded by the separatists, terrorists, maoists, drug smugglers, mining mafias and corrupt people. 

The Petitioner submitted that by not insisting any form of identification at the time of exchange of Rs 2000 denomination banknotes to other denomination banknotes, the Government is actually encouraging persons who are indulged in Benami transactions, money laundering and drug trafficking etc., and therefore, this decision of the Government has to be struck down by the Court.

Referring to the Notifications in question, the Bench opined that Rs 2000 denomination banknotes were introduced in November, 2016 to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all Rs 500 and Rs1000 banknotes in circulation at that time and the objective of introducing Rs.2000 banknotes was met once banknotes in other denominations became available in adequate quantities. 

“The notification also indicates that about 89% of Rs.2000 denomination banknotes had been issued prior to March 2017 and the same are at the end of their estimated life-span of 4-5 years. At present, Rs.2000 denomination banknotes worth Rs.3.62 lakh crores are in circulation and even they are not being commonly used for transactions and for this purpose, the Government has decided to withdraw these Rs.2000 denomination banknotes from circulation”, the Bench held.

Considering the fact that present case is not the case of demonetisation but withdrawal of Rs 2000 denomination banknotes from circulation, the Court opined that for this purpose, the Government had taken a decision not to insist upon requirement of identity proof for exchange of Rs 2000 denominations banknotes so that everybody can exchange the same with the other denomination banknotes. “Therefore, it cannot be said that the decision of the Government is perverse or arbitrary or it encourages black money, money laundering, profiteering or it abets corruption”,  the Bench added.

According to the Bench,the decision of the Government is only to withdraw Rs 2000 denomination banknotes from circulation for the reason that the purpose of issuing these denominations has achieved its purpose which was to meet the currency requirement of the economy in an expeditious manner in November, 2016 when all Rs 500 and Rs 1000 denomination banknotes were declared to be not legal tender and in order to meet the situation at that point of time, the Government took a decision to bring banknotes of Rs 2000 denomination to ensure adequate supply of money to meet the day-to-day requirements of the people.

The Bench also made it clear that in order to facilitate the exchange of Rs 2000 denomination banknotes with other denomination banknotes, the Government has given a window of four months to the citizens and in order to avoid inconvenience to citizens, the Government is not insisting of providing any kind of identification. 

Thus, finding the PIL to be devoid of merits, the Bench dismissed the same.