Lawyers challenge scrapping of Rs 500 and Rs 1,000 notes

Within hours of the government’s decision to demonetise Rs 500 and Rs 1,000 currency notes, two lawyers have approached the Bombay High Court, urging the court to take suo motu cognisance of the government’s decision to stop the circulation of these currency notes.

On Wednesday, senior counsel Jamshed Mistry and advocate Jabbar Shaikh moved the court’s vacation bench and argued that the government’s decision has caused unprecedented inconvenience to the public and it is also not within the framework of the law.

However, after listening the arguments of the counsels, Justice MS Karnik, who is preceding the vacation bench, directed them to move the matter to the regular bench as the matter is related to several questions of law. 

“We may challenge the government’s direction as a writ in the Bombay High Court’s division bench,” said Shaikh, confirming the development.

Mistry was not reachable for comments at the time of publishing this report.

Mistry and Shaikh in their argument cited a November 2 notification of Reserve Bank of India (RBI) that was sent out to all nationalised banks. In the notification, RBI had said as part of a ‘pilot project’, all banks must ensure that “within the next 15 days”, at least 10% of their authorised ATM machines should dispense currency notes of Rs100 denomination.

In a dramatic move to tackle counterfeit currency, corruption, illegal income and terror funding, Prime Minister Narendra Modi late on Tuesday announced abolishing Rs 500 and Rs 1,000 banknotes.

Mistry and Shaikh argued that in 1978, during the emergency, an ordinance followed by an Act called The High Denomination Bank Notes Act, 1978, was passed to bring demonetisation into effect.

“Therefore, the requirement is that the current demonetisation could have been done only through an ordinance, or amendment of the Act, and not merely through a gazetted notification,” they argued.

As per the law, the government needed to come out with an ordinance and then an Act before such a move, they argued.

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