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Justice B V Nagarathna of the Supreme Court, who gave a dissenting verdict on demonetisation on Monday, said the scrapping of the whole series of Rs 500 and Rs 1,000 currency notes had to be done through a legislation and not through a gazette notification as Parliament cannot be left aloof in a matter of such critical importance.
Justice Nagarathna, who was the juniormost judge in the Constitution bench also comprising justices S A Nazeer, B R Gavai, A S Bopanna and V Ramasubramanian, said the demonetisation of an entire series of notes at the Centre’s instance is a far more serious issue that has wider implications on the economy and the citizens of the country.
Observing that there was no independent application of mind by the Reserve Bank of India (RBI), Justice Nagarathna said the entire exercise was carried out in 24 hours.
“In my view, the power of the central government being vast has to be exercised through a plenary legislation rather than by an executive act by issuance of notification. It is necessary that Parliament, which consists of the representatives of the people of the country, discusses the matter and thereafter, approves the matter,” she said.
The judge said the proposal originated from the Centre while the RBI’s opinion was sought and such an opinion given by the central bank cannot be construed as a “recommendation” under section 26(2) of the RBI Act.
“Parliament is often referred to as a nation in a miniature. It is the basis of democracy. Parliament provides representation to the people of the country and makes their voices heard. Without Parliament, democracy cannot thrive. Parliament, which is the centre of democracy, cannot be left aloof in a matter of such critical importance,” she said.
In her minority verdict, Justice Nagarathna held that the demonetisation of the Rs 500 and Rs 1,000 currency notes was vitiated and unlawful.
The apex court in a 4:1 majority verdict upheld the government’s 2016 decision to demonetise the Rs 1,000 and Rs 500 denomination notes, saying the decision-making process was not flawed.
The top court’s judgment came on a batch of 58 petitions challenging the demonetisation exercise announced by the Centre on November 8, 2016.
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