The Supreme Court said on Wednesday it is aware of the “Lakshman Rekha” on judicial review of the Government’s policy decisions but will have to examine the 2016 demonetisation decision to come to a conclusion whether the issue has become a mere “academic” exercise.
Observing that when an issue arises before a constitution bench, it is its duty to answer, a five-judge bench headed by Justice SA Nazeer directed the Centre and the Reserve Bank of India to file a comprehensive affidavit on the petitions challenging demonetisation of `500 and `1,000 currency notes.
Attorney General R Venkataramani submitted that unless the Act on demonetisation is challenged in a proper perspective, the issue will essentially remain academic.
He said the High Denomination Bank Notes (Demonetisation) Act was passed in 1978 to provide in public interest for demonetisation of certain high denomination bank notes in order to check illicit transfer of money harmful to the economy which such currency notes
facilitate.
The top court said in order to declare whether the exercise is academic or has become infructuous, it needs to examine the matter since both sides are not agreeable.
“In order to answer that issue, we will have to hear and give an answer whether it’s academic, not academic or beyond the scope of judicial review. The point in the case is the Government policy and its wisdom which is one aspect of the matter.
“We always know where the Lakshman Rekha is, but the manner in which it was done has to be examined.”
We have to hear the counsel to decide that,” the bench, also comprising Justices B R Gavai, A S Bopanna, V Ramasubramanian, and B V Nagarathna said.
Solicitor General Tushar Mehta, appearing for the Centre, said the court’s time should not be “wasted” on academic issues. Objecting to Mehta’s submission, senior lawyer Shyam Divan, representing petitioner Vivek Narayan Sharma, said he was surprised at the words “waste of constitutional bench’s time” as the earlier bench had said these cases must be placed before a constitution bench.
Senior advocate and former Finance Minister P Chidambaram, appearing for one of the parties, said the issue has not become academic and has to be decided by the top court. He said this kind of demonetisation requires a separate Act of Parliament. Chidambaram pointed out that in 24 hours between November 7 and November 8 of 2016, the decision was taken in a totally non-transparent way to cancel 86 per cent of the currency in circulation.
He pointed out that on November 7, the Government asked RBI to recommend demonetisation and the RBI meeting with very less number of members conducted the meeting in Delhi to recommend demonetisation and within hours Cabinet took the decisions.
“In the evening Prime Minister Narendra Modi announced the policy by putting the Cabinet Ministers in the room, “ said Chidambaram. The top court has now posted the matter for hearing on November 9, 2022.
On December 16, 2016, a bench headed by then Chief Justice TS Thakur had referred the question of the validity of the decision and other related matters to a larger bench of five judges for an authoritative pronouncement.