What Did You Expect to Achieve With Demonetisation, SC Asks Govt

The Supreme Court said it will decide on the constitutional validity of demonetisation on 14 December.

The Supreme Court said it will decide on the constitutional validity of demonetisation on December 14. (Photo: The Quint)

The Supreme Court on Friday asked the government to clarify what it had hoped to achieve from demonetisation, and whether a proper plan had been in place ahead of its roll-out.

Significantly, the SC said it will decide on the constitutional validity of the move on December 14. The apex court also instructed the Centre to fix a ceiling for withdrawal from banks, saying that people must be allowed to withdraw at least Rs 10,000 per week.

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The bench of Chief Justice TS Thakur, AM Khanwilkar and DY Chandrachud also directed the Centre to list a definitive plan to reduce the hardships being faced by people after the currency ban was imposed.

Here are some of the other key questions the apex court asked Attorney General Mukul Rohatgi, who represented the Centre.

‘Was There a Plan or Was It an Impulsive Decision?’

Stressing on the fact that demonetisation is a matter of grave concern, the Chief Justice of India (CJI) asked Attorney General Mukul Rohatgi to list a definitive plan to deal with the resultant problems.

Was any thought applied to how much money will come in and how much was to be printed? Was there a plan? 

Supreme Court bench

The SC also sought clarity on the objectives of demonetisation in the first place.

Replying to this, the Attorney General said that the primary objectives were to eradicate black money, terror funding and fake currency.

The government in its defence also maintained that secrecy was needed to carry out demonetisation, which led to the shortage. Rohatgi added that the inconvenience will ease out soon.

He even tried to play down the hardships faced by people saying that there are on an average only 10 people outside any ATM queue now. The petitioners rebutted this assertions of the AG, saying it would take around 7 months to get over the cash crunch.

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The Attorney General also claimed that the figure of over 90 people dying due to demonetisation reflects political overtones. But the petitioners and the court both said that the situation was drastically different from what the AG was claiming.

‘Promised Withdrawal Limits Should be Met’

The Supreme Court asked the Attorney General to inform it by December 14 whether the limit on withdrawals per week can be raised.

You promised people they can withdraw Rs 24,000 a week. Instead, RS 2,000, 5,000 and 10,000 were given. A promise must be met.

The SC directed the government to fix a limit for withdrawal from banks, saying that people must be allowed to withdraw at least Rs 10,000.

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SC to Look Into Legality of Demonetisation

The court however did not take any decision on the petitions challenging demonetisation during Friday’s hearing. It clarified that it would focus only on the legal aspect of the move and not pay heed to emotional pleas.

The court will also examine December 14 whether demonetisation is in violation of the fundamental rights guaranteed under the Constitution and if the move is unconstitutional.

The SC said it will frame nine questions on the demonetisation issue during the next hearing on December 14 and put up the issues for adjudication in January.

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‘Clarify Position on Cooperative Banks’

The Chief Justice of India asked the Attorney General why were the co-operative banks being discriminated against.

Why are you not allowing deposits into co-op banks? It is one thing to stop something and to intelligently curb fake money.

Cooperative banks are currently not allowed to accept cash, leading to a lot of inconvenience to citizens. The SC therefore instructed the government to revise its position on these banks.

The court also asked the Centre to inform by December 14 whether cooperative banks could accept deposits under stringent regulations.

(With inputs from IANS)

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