The demonetisation of high-denomination currency notes on November 8, 2016, was a way of converting black money into white, Supreme Court’s Justice BV Nagarathna said on Saturday, Bar and Bench reported.
“We all know what happened on November 8, 2016, when Rs 500 and Rs 1000 notes were demonetised,” Nagarathna was quoted as saying at the Courts and the Constitution annual conference at a law university in Hyderabad. “The interesting aspect is that in the Indian economy at that time, Rs 500 and Rs 1000 notes comprised 86% of the currency, which the central government lost sight of while demonetising the currency notes.”
Nagarathna said that a daily wage worker who went to work a day before demonetisation was announced and received a Rs 500 or Rs 1000 note at the end of the day, had to get that note exchanged before buying daily essentials.
The decision was announced by Prime Minister Narendra Modi at 8 pm on November 7, 2016, and came into force at midnight. At the time, the Bharatiya Janata Party government had said that the exercise would eradicate black money from circulation.
In August 2017, the Reserve Bank of India said in its report that 98.96% of the demonetised currency notes had been deposited with the banks. Arun Jaitley, the Union finance minister at the time, had said: “That people have been compelled to deposit even black money into banks is itself a good evidence of its [success].”
On Saturday, the judge questioned the goal of the demonetisation exercise since 98% of the currency came back into circulation.
“So, where are we in black money eradication,” she asked. “So I thought [at the time] it was a good way of making black money white money, of unaccounted cash entering the system. What happened with regard to income tax proceedings thereafter, we do not know. So this common man’s predicament really stirred me and I had to dissent.”
Nagarathna was the dissenting judge in a 4:1 Supreme Court judgement that upheld the demonetisation exercise in January 2023.
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, many even killed themselves after failing to exchange old notes for valid currency.
Also read: Did the Supreme Court really vindicate the Modi government’s demonetisation decision?
Embarrassing to tell governors what to do: Nagarathna
Justice Nagarathna also on Saturday said that it was not a healthy trend that the court has to ask governors to act according to the Constitution.
In recent years, governors in states where the Opposition parties are in power have delayed or denied giving assent to some crucial bills.
Earlier this month, the top court had reprimanded Tamil Nadu Governor RN Ravi for not reinducting Dravida Munnetra Kazhagam MLA as a Cabinet minister in the state. In November, the Kerala government had moved the Supreme Court against the delay by Governor Arif Mohammed Khan in considering bills waiting for his assent.
“This is not a healthy trend under the Constitution to bring what the Governor does before constitutional courts for consideration,” Nagarathna said. “Though it is called a gubernatorial post, it is a serious constitutional post, and Governors must act as per the Constitution so this kind of litigation reduces. It is quite embarrassing for Governors to be told to do or not do a thing.”
Also read: Is the BJP’s use of aggressive governors for political ends backfiring?
Article 370 verdict did not answer issue of federalism: Retired SC judge
The December 11 judgement upholding the abrogation of Article 370 of the Constitution did not address the key issue concerning federalism, retired Supreme Court Justice Ravinder Bhat said while addressing the same event in Hyderabad on Saturday, Bar and Bench reported.
A Constitution bench headed by Chief Justice DY Chandrachud and comprising Justices Sanjay Kishan Kaul, Sanjiv Khanna, BR Gavai and Surya Kant had passed the judgement on more than 20 petitions challenging the Union government’s decisions to revoke Jammu and Kashmir’s special status and split the erstwhile state into two Union territories in 2019.
“The other important judgement, which has long-term implications, is the Article 370 of the Constitution judgement,” Bhat said. “The Court spoke in unison through three judgments. It left unanswered an important issue on federalism.”
The bench in December ruled that Article 370 was a temporary provision.
“Article 370 was an interim arrangement due to war conditions in the state,” the bench said. “Textual reading also indicates that [Article 370] is a temporary provision. Marginal note says it is temporary and transitory.”
Justice Kaul’s concurring judgement with the chief justice said that the purpose of Article 370 was to slowly bring Jammu and Kashmir at par with other Indian states.
Also read: How the Supreme Court upheld Modi government’s Article 370 abrogation
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