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Synopsis

The Delhi High Court has observed that the decision of the government to exchange Rs. 2,000 denomination banknotes without obtaining any requisition slip and identity proof is purely a “policy decision” and the courts should not sit as an appellate authority over the decision taken by the Government.

A division bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad was dealing with a Public Interest Litigation (PIL) filed by Advocate Ashwini Kumar Upadhyay against permission to exchange Rs. 2,000 denomination banknotes without obtaining any requisition slip and identity proof.

The bench held, “Banknotes of Rs.2000 shall continue to be a legal tender and this policy is only for the exchange of banknotes having a denomination of Rs.2000 with other banknotes. In order to facilitate the exchange of Rs.2000 denomination banknotes with other denomination banknotes, the Government has given a window of four months to the citizens and in order to avoid inconvenience to citizens, the Government is not insisting on providing any kind of identification. As stated earlier, this decision of the Government is purely a policy decision and Courts should not sit as an Appellate Authority over the decision taken by the Government”.

On perusal of the notification issued by the RBI, the court stated that Rs.2000 denomination banknotes were introduced in November 2016 to meet the currency requirement of the economy in an expeditious manner after the withdrawal of the legal tender status of all Rs.500 and Rs.1000 banknotes in circulation at that time and the objective of introducing Rs.2000 banknotes was met once banknotes in other denominations became available in adequate quantities.

“The notification also indicates that about 89% of Rs.2000 denomination banknotes had been issued prior to March 2017 and the same are at the end of their estimated life span of 4-5 years. At present, Rs.2000 denomination banknotes worth Rs.3.62 lakh crores are in circulation and even they are not being commonly used for transactions and for this purpose, the Government has decided to withdraw these Rs.2000 denomination banknotes from circulation”, the court added.

The court said that in order to ensure that there is a smooth transition of Rs.2000 denomination banknotes, which continue to be a legal tender till September 2023 i.e. for four months, banks have provided facilities for conversion of these banknotes to other denomination banknotes.

Clarifying that the present case is not the case of demonetisation but the withdrawal of Rs.2000 denomination banknotes from circulation, the division bench said that the Government has taken a decision not to insist upon the requirement of identity proof for the exchange of Rs.2000 denominations banknotes so that everybody can exchange the same with the other denomination banknotes. Therefore, it cannot be said that the decision of the Government is perverse or arbitrary or it encourages black money, money laundering, profiteering, or abets corruption.  

“It is well settled that decision taken by the Government in relation to the economic policies is not ordinarily interfered with by the Courts unless the decision of the Government is manifestly arbitrary”, the court said.

Conclusively, the court ordered, “In the considered opinion of this Court, the present PIL is devoid of merits. Resultantly, the PIL is dismissed, along with the pending application(s), if any”.

Case Title: Ashwini Kumar Upadhyay v. UOI & Ors.