RBI notification asking banks not to issue ₹2,000 notes is not demonetisation: Delhi High Court

The Delhi High Court has held that till the time ₹2,000 notes continue to be legal tender, the directions by the Reserve Bank of India (RBI) to various banks not to issue such notes from their currency chests cannot be termed ‘demonetisation’..A Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad noted that the RBI’s notification on swapping of ₹2,000 notes states that this currency has achieved its objective and that their printing was stopped in the year 2018-19.“A perusal of the Notification in question shows that the RBI has not taken any decision for discontinuance of ₹2000 bank notes. It is not a decision to demonetize ₹2000 bank notes and this circular is only a direction to the banks to desist from issuing ₹2000 denomination notes to its customers and to ensure that no withdrawal of ₹2000 denomination notes is allowed from the banks holding currency chests,” the order said..The Court made the observations while dismissing a Public Interest Litigation (PIL) filed by Advocate Rajneesh Bhaskar Gupta challenging the RBI’s decision on exchange of ₹2.000 notes.Gupta had argued that the RBI had no independent power under the RBI Act to discontinue banknotes. He said that the power to discontinue banknotes only lay with the Central government and that there was nothing to show that the latter had passed any such order..After considering the case, the Bench said that the fact that the permission to exchange ₹2,000 notes was available only till September 23, 2023 does not mean that RBI has issued a direction that from this date, ₹2,000 banknotes will be demonetized.“The RBI has, therefore, not exceeded the powers conferred to it under the RBI Act or has violated the Banking Regulation Act, 1949… The Circular in question is not a direction to print or discontinue to print ₹2000 banknotes which is the domain of the Central Government and Courts generally do not interfere in policy matters unless the decision is completely arbitrary,” the Court concluded..Senior Advocate Sandeep P Agrawal along with Advocates Rishikesh Kumar, Priyankar Tiwary, Tanya Chanda and Tushar Sannu appeared for the petitioner.Senior Advocate Parag P Tripathi with Advocates Ramesh Babu MR, Nisha Sharma, Manisha Singh, Tanya Choudhary, Rohan Srivastava and Vasundhara Bakhru represented RBI.Additional Solicitor General (ASG) Chetan Sharma with Central Government Standing Counsel (CGSC) Apoorv Kurup and Advocates Saurabh Tripathi, Vikramaditya Singh and Akhil Hasija appeared for the Union of India..[Read Order]