- SC asked govt if it had a plan at all or took a decision “just like that” when it scrapped Rs 500 and Rs 1,000 notes on November 8
- The court caustically asked, “Can you put what you had estimated when you took the decision to scrap Rs 500 and Rs 1,000 notes? Did you make any estimation at all? Was there a plan?
Responding to attorney general Mukul Rohatgi’s submission that the Centre’s expectation that scrapped currency worth Rs 10-11 lakh crore would come back had been exceeded, the court caustically asked, “Can you put what you had estimated when you took the decision to scrap Rs 500 and Rs 1,000 notes? Did you make any estimation at all? Was there a plan? Or, did you take the decision just like that? If you had thought notes worth Rs 10 lakh crore would come back to the banks, did you take steps to urgently put in that much of new currency+ back in circulation? Can you produce the Cabinet note before the decision was taken?”
The court’s comments came as the Centre+ said deposits of old notes had touched Rs 12 lakh crore till date but resisted the SC’s attempts to tweak the withdrawal limit to provide relief for harassed citizens by asking, “Can you tinker with fiscal policy?”
The bench persisted and asked the Centre to revert by Wednesday whether it intends to rework a cash withdrawal limit to make it possible for banks to honour it and not ask citizens to downsize their demand citing insufficient cash. The court’s remarks came in the context of submissions that banks were rationing cash and not honouring the Rs 24,000 withdrawal limit.
The court also asked if the government would permit cooperative banks to receive deposits under stringent guidelines in response to pleas that this was essential to meet the needs of the farm sector. The SC further sought the Centre’s response whether it supported sending the petitions challenging demonetisation to a five-judge bench as demanded by former minister and senior lawyer Kapil Sibal.
Rohatgi told a bench of Chief Justice T S Thakur and Justices A M Khanwilkar and D Y Chandrachud, “We had initially expected Rs 500 and Rs 1,000 notes worth Rs 10-11 lakh crore to be deposited back in banks. It has exceeded our expectation. 80% of the scrapped notes have come back. We expect one or two more crores to trickle in by December 31.”
Rohatgi pushed back and articulated the Centre’s apprehension over the judiciary scrutinising fiscal policy and attempting to tweak it. “There is serious reservation about maintainability of these PILs filed by advocates and cooperative banks against demonetisation. Can the SC decide fiscal policy of a government? Can it dictate what should be done and what should not be? “The judiciary has stepped into the realm of fiscal policy. Can the court decide what should be the government’s fiscal policy? It is not permissible. Please think about this. The situation is getting better and it will normalise after December 31.
Which farmer or poor person has come to the court asking for relief or complaining about non-availability of cash? Most of the PILs are filed by lawyers and cooperative banks. Do lawyers represent the people?” the AG asked.
Former finance minister and senior advocate P Chidambaram claimed the government did not have a correct estimate of what would return to the banks. He said that as of November 1, there were Rs 15.44 lakh crore worth of Rs 500 and Rs 1,000 notes. “The government had no proper estimate of what would come back to banks post-demonetisation. It has put new currency notes worth Rs 3 lakh crore into the system. As a result, there is a severe cash crunch and people still have to stand for hours before banks and ATMs. Yet, there is no guarantee that they will get money,” he said.