Can examine manner in which economic decision was taken: Supreme Court on demonetisation

Express News Service

NEW DELHI: The Supreme Court on Tuesday observed that it was always amenable for the court to examine the manner in which an “economic decision is taken.” 

Brushing aside RBI’s contention in pleas challenging the centre’s decision to demonetise notes of Rs 500 and Rs 1000 in 2016 that the top court cannot review an economic policy measure judicially, Justice BV Nagarathna said, “Court will not go into the merits of the decision. But, just because it is an economic decision, does not mean the court will fold its hands and sit. We can always examine the manner in which the decision was taken.”

Defending the manner in which the decision was taken, Senior Advocate Jaideep Gupta for RBI submitted before the five-judge bench led by Justice S Abdul Nazeer that judicial review would only lie if there was a “procedural lapse” and in this case, there wasn’t any since the procedural mandate was followed.

“There’s no procedural lapse. If there was a procedural lapse, then judicial review lies. The procedure under section 26(2) was obviously followed, and a procedural mandate was followed. Any decision, when unconstitutional, will be amenable to judicial review. But whether it is subject to abuse of discretion is a separate thing altogether,” Gupta further added. It was also his contention that care was taken to see that none’s money was unnecessarily destroyed. He also added that reasonable opportunities were given to the people to arrange affairs and the government took cognisance whenever a problem arose. “If the govt is in such readiness to deal with the decision, then to call it thoughtless does not make sense. It has also been stated that whenever a problem arose, the government took cognisance. There was a control room,” he added. 

For the central government, Attorney General for India R Venkataramani contended that the decision of demonetisation was taken to address three evils related to social policy. “Today, courts don’t enter into economic policy. We’re looking into social theory as to how the government will make social policies and choices. When we move from one framework to another, the state will have to balance. Several difficulties were presented to the court as well as policymakers. If every act of a legislature is investigated on the premise of wisdom, then where will we be,” AG further asked.

Underscoring the role played by RBI in issues of currency, Senior Advocate and Former Finance Minister P Chidambaram in his rejoinder submissions argued that the centre could act only pursuant to the recommendations made by the RBI central board. “Process cant be reversed to centre advising to RBI and RBI submitting to centre’s advice and submitting its recommendation after a one-hour meeting in one day,” he also added. He further added that demonetisation had nothing to do with monetary policy. “They are throwing phrases like monetary policy and economic policy telling the court that they are not experts. None of us are experts,” he added. 

NEW DELHI: The Supreme Court on Tuesday observed that it was always amenable for the court to examine the manner in which an “economic decision is taken.” 

Brushing aside RBI’s contention in pleas challenging the centre’s decision to demonetise notes of Rs 500 and Rs 1000 in 2016 that the top court cannot review an economic policy measure judicially, Justice BV Nagarathna said, “Court will not go into the merits of the decision. But, just because it is an economic decision, does not mean the court will fold its hands and sit. We can always examine the manner in which the decision was taken.”

Defending the manner in which the decision was taken, Senior Advocate Jaideep Gupta for RBI submitted before the five-judge bench led by Justice S Abdul Nazeer that judicial review would only lie if there was a “procedural lapse” and in this case, there wasn’t any since the procedural mandate was followed.

“There’s no procedural lapse. If there was a procedural lapse, then judicial review lies. The procedure under section 26(2) was obviously followed, and a procedural mandate was followed. Any decision, when unconstitutional, will be amenable to judicial review. But whether it is subject to abuse of discretion is a separate thing altogether,” Gupta further added. It was also his contention that care was taken to see that none’s money was unnecessarily destroyed. He also added that reasonable opportunities were given to the people to arrange affairs and the government took cognisance whenever a problem arose. “If the govt is in such readiness to deal with the decision, then to call it thoughtless does not make sense. It has also been stated that whenever a problem arose, the government took cognisance. There was a control room,” he added. 

For the central government, Attorney General for India R Venkataramani contended that the decision of demonetisation was taken to address three evils related to social policy. “Today, courts don’t enter into economic policy. We’re looking into social theory as to how the government will make social policies and choices. When we move from one framework to another, the state will have to balance. Several difficulties were presented to the court as well as policymakers. If every act of a legislature is investigated on the premise of wisdom, then where will we be,” AG further asked.

Underscoring the role played by RBI in issues of currency, Senior Advocate and Former Finance Minister P Chidambaram in his rejoinder submissions argued that the centre could act only pursuant to the recommendations made by the RBI central board. “Process cant be reversed to centre advising to RBI and RBI submitting to centre’s advice and submitting its recommendation after a one-hour meeting in one day,” he also added. He further added that demonetisation had nothing to do with monetary policy. “They are throwing phrases like monetary policy and economic policy telling the court that they are not experts. None of us are experts,” he added.