RBI should consider genuine applications to exchange demonetised notes of persons who missed deadline: Apex Court

‘A series of extensions cannot be granted with respect to the extension of time because it will introduce endless uncertainties in the process’ 

MP | 27 Nov 2022 | New Delhi: During the hearing of the pleas challenging demonetisation, the Supreme Court on Friday orally said the Reserve Bank of India should consider the genuine applications made by persons who missed the deadline for exchanging the demonetised currency notes, Live Law reported. 

The five-judge Bench, comprising Justices S Abdul Nazeer, B R Gavai, A S Bopanna, V Ramasubramanian, and B V Nagarathna, is considering, inter alia, the legality of the November 8 decision of the Union government to demonetise the currency notes of Rs 500 and Rs 1000 denominations. 

Attorney General for India R Venkataramani said the extension of dates to exchange demonetised banknotes is non-negotiable, but the Reserve Bank will consider individual cases subject to the fulfilment of requisite conditions by the applicants and the satisfaction of the central bank. Speaking about the "700 odd applications" received by the Reserve Bank to credit the value of demonetised notes after the expiry of the grace period, Venkataramani also added: 

"A series of extensions cannot be granted with respect to the extension of time because it will introduce endless uncertainties in the process." Justice Gavai pointed out that a power was vested in the Reserve Bank of India under Sub-section (2) of Section 4 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017, which must be exercised if the central bank is satisfied as to the genuineness of a claim. 

"Because this element of satisfaction and discretion exists, there is also a corresponding duty to decide whether a particular case is genuine. Rejection of claims in genuine cases would be an arbitrary exercise of power," the judge said. Justice Gavai added: "You would also not like to open a pandora's box, but if there are genuine cases, the Reserve Bank will have to consider them." 

At the same time, Justice Gavai conceded that the apex court could not "sit in appeal" over the decision rendered by the central bank as to the genuineness of a claim, as long as relevant factors were taken into account while making that determination. 

The Attorney-General also disputed the contention that demonetising high-value banknotes amounted to the compulsory acquisition of property and as such, subject to the discipline of Article 300A. 

He said: "There is an exchange provision available under the Act. Therefore, there is no acquisition of property at all. If an exchange provision had not been given under the Act, then this article could have been invoked." He submitted. 

He added: "The next question is where the line must be drawn for fixing of a date. This was ascertained on the basis of criteria that the government found suitable. 

Unless any mala fide intentions can be imputed to the government, this is not amenable to judicial review." 

https://www.millenniumpost.in/big-stories/rbi-should-consider-genuine-applications-to-exchange-demonetised-notes-of-persons-who-missed-deadline-apex-court-500334