Supreme Court dismisses plea challenging exchange of Rs 2,000 notes without proof

The RBI has advised members of the public to deposit Rs 2,000 banknotes into their bank accounts.

The Supreme Court on July 10 dismissed a plea challenging a Reserve Bank of India (RBI) notification that allowed the exchange of the discontinued Rs 2,000 notes without a requisition slip and proof of identity.

The plea was filed by lawyer Ashwini Upadhyay against a Delhi High Court judgment in May that dismissed a Public Interest Litigation (PIL) against permission to exchange Rs 2,000 banknotes without obtaining any requisition slip and identity proof.

On May 23, Upadhyay, who filed the plea, appeared in person and argued that the notifications by the RBI and SBI in this regard are arbitrary, irrational, and offend Articles 14 of the Constitution of India.

Appearing for the RBI, senior advocate Parag Tripathi urged the bench to dismiss the plea on the grounds that the constitution bench of the top court has time and again reiterated that it cannot interfere in the nation’s economic policies.

Tripathi further argued that withdrawing Rs 2,000 note is not demonetisation but a statutory exercise, and hence it is not a public issue.

The RBI on May 19 said the Rs 2,000 note was being pulled out from circulation and citizens had time till September 30 to exchange or deposit the notes.

Upadhyay's petition said that a large amount of the currency has reached either an individual's locker or has "been hoarded by the separatists, terrorists, Maoists, drug smugglers, mining mafias and corrupt people".

It also highlighted that cash transactions in high-value currency are the main sources of corruption and are used for illegal activities like terrorism, naxalism, separatism, radicalism, gambling, smuggling, money laundering, kidnapping, extortion, bribing, and dowry. The RBI and SBI should ensure that Rs 2,000 banknotes are deposited in respective bank accounts only, it stated.

Note withdrawal

The RBI has advised members of the public to deposit Rs 2,000 banknotes into their bank accounts or exchange them for banknotes of other denominations at any bank branch.

"Deposit into bank accounts can be made in the usual manner, that is, without restrictions and subject to extant instructions and other applicable statutory provisions," the RBI said in a release.

The apex bank further said that in order to ensure operational convenience and to avoid disruption of regular activities of bank branches, the exchange of Rs 2,000 banknotes into banknotes of other denominations can be made up to a limit of Rs 20,000 at a time at any bank starting from May 23, 2023.