Ordinance on Demonetisation Supersedes PM Modi’s Promise: AG to SC

The apex court was responding to grievances by those who were unable to deposit notes due to ‘genuine’ reasons.

The SC was responding to complaints by those who couldn’t exchange the currency due to ‘genuine reasons’. (Photo: Reuters)

The Supreme Court on Tuesday asked the Centre to consider creating new categories of people who can be allowed to deposit old notes banned during the demonetisation exercise.

The apex court asked the Centre to respond within two weeks and explain the reason if it decides not to create such categories.

A bench led by Chief Justice of India JS Khehar, Justice DY Chandrachud, and Justice Sanjay Kishan Kaul, said the court can later pass the orders to allow deposit of old notes, if needed. The next hearing is scheduled for 11 April.

The apex court was responding to a batch of petitioners who said they were unable to deposit banned notes within the deadline due to “genuine” reasons, and now face the risk of prosecution.

The deadline to deposit demonetised notes was 30 December 2016. Those who were abroad between 8 November and 30 December were given time until 31 March, and non-resident Indians till 30 June to deposit the banned notes at select branches of the Reserve Bank of India (RBI).

The court had on 6 March sought responses from the Centre and the RBI as to why demonetised notes were not accepted till 31 March, as was promised.

According to petitioners, Prime Minister Narendra Modi while announcing demonetisation had said those who failed to deposit the notes by 30 December would be given more time. The government’s notification issued on 8 November also promised more time after the deadline.

During the hearing on Tuesday, Attorney General of India Mukul Rohatgi said the 30 December 2016 ordinance was the final word in the matter, superseding the Prime Minister’s speech and the notification. The ordinance gave time until 31 March to only those who were abroad during the 50-day period from 8 November to 30 December.

The apex court observed that the ordinance was promulgated on the very last day (30 December) without any prior notice to the public. The AG countered by saying that it is formulation of a law, and a notice was not necessary.

After the government scrapped old Rs 500 and Rs 1,000 notes on 8 November 2016, rules regarding their exchange and deposit were changed several times.

On 31 December, the RBI had designated its five offices – Mumbai, New Delhi, Chennai, Kolkata, and Nagpur – to exchange invalid currency notes beyond the 50-day demonetisation period.

(The story was first published on BloombergQuint.)