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The Delhi High Court dismissed PIL’s petition challenging the RBI notification issued on May 19 announcing the withdrawal of the highest valued Rs 2,000 banknote.
The bench of Chief Justice Satish Chandra Sharma and Justice Subramunium Prasad in his July 3 order noted, “A perusal of the relevant notification shows that the RBI has not taken any decision to discontinue the Rs 2,000 notes. It is not a decision to demonetize the Rs 2,000 notes. 2,000 rupees and this circular is merely a directive to banks to stop issuing Rs 2,000 notes to their customers and to ensure that withdrawals of Rs 2,000 notes are not allowed from banks holding currency funds.”
Referring to the various decisions of the Supreme Court which settled the “scope of judicial intervention in matters relating to economic policy”, the arbitral tribunal while dismissing the petition noted that the RBI was “within its powers to issue the relevant notification and is only part of the currency management system”.
On the petitioner’s claim that a RBI directive not to re-issue banknotes “can only be given to such torn, mutilated or excessively corrupted banknotes”, the bench said the same did not apply in the present case.
The High Commissioner said the May 19 notification is a directive to banks not to issue Rs 2,000 notes to their customers and an information for the public to exchange Rs 2,000 notes to notes of other denominations.
The relevant notification and the press release state in no uncertain terms that the 2,000 rupee notes will remain legal tender. The press release only states that members of the public may deposit the 2,000 rupees notes in their bank accounts and/or exchange them for notes of other denominations at any bank branch …” the Supreme Court noted.
The Board further noted that until such time as the Rs 2,000 notes continue to be legal tender, it cannot be said that the directive issued by the Reserve Bank of India is a decision to “demonstrate the Rs 2,000 notes” and that the decision is taken only to “manage the notes in circulation “.
“The Reserve Bank of India (RBI) has only instructed banks not to issue 2,000 rupee notes to their customers in order to ensure that the 2,000 rupee notes do not circulate even though they remain legal tender. The fact that permission to exchange notes of 2000 rupees is 2,000 rupee notes are only available till 23.09.2023 does not mean that the RBI has issued a directive from 23.09.2023 the circulation of the 2,000-rupee notes will be abolished,” he added, adding that the body did not exceed its powers granted under the RBI Act or violated the Banking Regulation Act.
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