The Supreme Court’s dissenting verdict on the 2016 demonetisation exercise may only be a slap on the wrist of the Central government but it is a welcome one, Congress MP P Chidambaram said on Monday.
“We are happy that the minority judgement has pointed out the illegality and the irregularities in the demonetisation [move],” Chidambram said in a series of tweets.
In its 4:1 majority verdict earlier on Monday, the Supreme Court said that the demonetisation exercise cannot be struck down on the grounds of proportionality or on the process followed to make the decision. The judgement was delivered on a batch of petitions challenging the government’s move to ban Rs 500 and Rs 1,000 bank notes through a gazette notification in 2016.
Justice BV Nagarathna, who wrote a separate judgement, said the exercise was unlawful. However, she said that there is no point in striking it down now as the notification has been acted upon and reversing it would not change the actions that have been taken.
In his tweets, the Congress MP said that Nagarathna’s judgement will be ranked among the famous dissents in the history of the Supreme Court verdicts.
“The minority judgement brings out the profound distinction between the plenary legislative power of Parliament and the limited power of the executive government,” he said.
While stating that his party was obliged to accept the Supreme Court’s ruling, Chidambaram said that the majority verdict steered clear of the question of whether the stated objectives of the demonetisation exercise were achieved. The Centre had claimed that the move was aimed at weeding out black money and countering terrorism, among other things.
Meanwhile, Congress General Secretary (communications) Jairam Ramesh said that the Supreme Court only pronounced its verdict whether Section 26(2) of the Reserve Bank of India Act was correctly applied when undertaking the demonetisation exercise.
The provision allows the Centre to declare that any series of bank notes of any denomination would cease to be legal tender.
“Our Hon’ble judge in her dissenting opinion has said that Parliament should have not been bypassed,” Ramesh said.
The Congress leader added that the verdict had nothing to do with the impact of demonetisation, which he said is a “singularly disastrous decision” that damaged the country’s growth rate, crippled Micro, Small and Medium Enterprises and destroyed lakhs of livelihood.
“The majority Supreme Court verdict deals with the limited issue of process of decision making, [and] not with its outcomes,” the Congress leader said. “To say that demonetisation has been upheld by the Honourable Supreme Court is totally misleading and wrong.”
Shiv Sena MP Priyanka Chaturvedi also praised Nagarathna for her verdict.
BJP welcomes SC verdict
Meanwhile, the Bharatiya Janata Party hailed the Supreme Court verdict upholding the government’s demonetisation exercise as historic.
BJP spokesperson Shehzad Poonawalla claimed that through the verdict, the Supreme Court has given its approval to exercise’s objective of fighting corruption.
“Even the dissenting judge they are quoting has lauded the noble intentions of DeMo [demonetisation] but Congress will continue to be the patron of corruption!” he said, referring to Chidambaram’s tweets.
Former law minister and BJP leader Ravi Shankar Prasad asked if Congress leader Rahul Gandhi will tender an apology after the verdict. “He spoke against it even abroad,” Prasad said.
Demonetisation and SC judgement
At 8 pm on November 8, 2016, Prime Minister Narendra Modi had announced that Rs 500 and Rs 1,000 currency notes would cease to be legal tender in India from midnight. Modi had said that the decision had been taken to “fight corruption, black money and terrorism”.
Soon after the decision was announced, several persons, many of them elderly, had died while standing in long queues to exchange their money. As millions of families were left stranded with no cash, some even killed themselves after failing to exchange old notes for valid currency.
In the majority judgement, Justice BR Gavai said the demonetisation exercise had a “reasonable nexus” with the objectives of the move such as eradicating black marketing, weeding out counterfeit notes and stopping terror funding.
“It is not relevant whether the objective was achieved or not,” he added.
Gavai held that the period of 52 days prescribed for exchanging demonetised currency could not be called unreasonable.
However, Nagarathna in her judgement observed that Gavai’s ruling does not take into account the fact that the Centre’s power to demonetise any legal tender comes from Entry 36 of the Union List, and not the Section 26(2) of the RBI Act.
Entry 36 of the Union List deals with currency, coinage and legal tender, among other things.
She held that the proposal to change status of the legal tender has to come by the way of legislation and if secrecy is needed in the case, it needs to be done by passing an Ordinance.
The judge also held that the Union government initiated the demonetisation exercise and sought the opinion of the RBI. “Such an opinion given by the RBI cannot be construed as a “recommendation” under Section 26(2) of the RBI Act,” she said.
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