In a significant legal win for the Central government, the Supreme Court of India upheld by a majority verdict the government's 2016 decision to demonetise Rs 500 and Rs 1000 notes in 2016.
A five-judge Constitution bench of the apex court, headed by Justice S A Nazeer, said the Centre's decision-making process could not have been flawed as there was consultation between the Reserve Bank of India (RBI) and the Union government.
The court stated that the notification announcing the demonetisation, dated November 8, 2016, was reasonable and proportional, and that it was not relevant whether the objectives behind the decision were achieved or not.
The Central government, in an affidavit, had told the Supreme Court that the 2016 demonetisation was a carefully planned decision that was part of a larger strategy to address issues such as fake money, terrorism financing, tax evasion, and undeclared wealth.
The government stated that it had consulted with the Reserve Bank of India and made necessary preparations before implementing the ban on 500 and 1000 rupee notes.
"It was an economic policy decision exercised in accordance with powers conferred by an Act of the Parliament (RBI Act, 1934), in conformity with the provisions of the said Act and was subsequently affirmatively taken note of by the Parliament in the Specified Bank Notes (Cessation of Liabilities) Act, 2017," the Centre had submitted.
The top court's judgment came on a batch of 58 petitions challenging the demonetisation exercise announced by the Centre on November 8, 2016.
(with inputs from PTI)
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