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Synopsis

The Bombay High Court has recently rejected a petition lodged by a Mumbai resident claiming that the Reserve Bank of India (RBI) was involved in irregularities during the demonetization process in 2016.

The petition was dismissed by the division bench of Justice AS Gadkari and Justice Sharmila Deshmukh.

The petitioner alleged that the RBI did not adhere to the prescribed procedures and regulations, allowing certain individuals to exchange their unaccounted old currency notes of Rs. 500 and Rs. 1,000 during the 2016 demonetization, with the assistance of the National Bank for Agriculture and Rural Development.

The petitioner based these allegations on the RBI's annual reports and argued that the legal circulation of Rs. 500 and Rs. 1,000 banknotes was less than the total amount reported after demonetization. This led the petitioner to conclude that illegal notes totalling Rs. 11,66,50,00,00,000 (Rupees One Trillion One Hundred Sixty-Six Billion Five Hundred Million) were in excess and had entered the banking system.

The bench however was of the opinion that courts should refrain from delving into the monetary framework unless it is satisfied that there is a need for investigation by an independent agency.

“It cannot be disputed that the RBI plays an important role in shaping the economy of our country and the Courts should refrain from delving into the monetary regulatory framework unless it is shown to the satisfaction of the Court that there is a need for an investigation by an independent agency,” the bench said.

The high court further added that there were no pleadings supported by the independent financial experts.

“Neither the pleadings nor the complaint is supported by the report of an independent financial expert demonstrating that the discrepancies point out to the commission of an offence so as to entail a detailed inquiry or investigation,” the order reads.

While dismissing the petition the bench said the petition was nothing but a fishing inquiry and the information of the petitioner was half-baked.

“In our opinion, the present Petition is nothing but a fishing inquiry into what the Petitioner perceives to be a scam based on various figures set out in the annual reports as well as the information given under the RTI. In our view, reliance cannot be placed on half-baked information pleaded in the Petition and the complaint to direct an investigation into the statutory functioning of an institution like RBI,” the bench said.

The bench considered imposing exemplary costs of Rs. 10 lakhs on the petitioner for filing a frivolous petition. However, it decided against this after the petitioner requested that no costs be imposed.

Case title: Manoranjan Santosh Roy vs UOI & Ors