Demonetisation a bona fide policy decision, unless found otherwise: Bombay High Court

by The Technical Blogs

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It’s indisputable that the RBI plays a crucial role in our economy, and courts should avoid delving into the monetary regulatory framework unless independent investigation is deemed necessary. The Bombay High Court expressed this viewpoint while dismissing a petition alleging wrongdoing by RBI officials during the 2016 demonetisation.

The bench of Justices Ajay Gadkari and Sharmila Deshmukh listened to a petition by RTI activist Manoranjan Roy, who sought an independent investigation into alleged unlawful activity by RBI officials during the demonetisation of Rs 500 and Rs 1,000 notes.

READ | Demonetisation cannot be struck down: SC upholds Centre’s notes ban decision

The bench concluded that Roy’s petition was merely an ill-informed inquiry into an imagined scam. The court noted that issuing legal tender is an RBI function, sanctioned by expert committees, thus making it immune to baseless questioning.

The court deemed the 2016 demonetisation notification a bona fide “policy decision”, adding that unless proved to the contrary, such decisions are presumed to be in the public interest.

The bench stated that the absence of evidence of an offence meant there was no basis for any proposed inquiry. It also observed that Roy, since 2016, had repeatedly pursued an investigation into alleged RBI malfeasance, without providing compelling evidence or independent expert analysis.

ALSO READ | ‘Wrong to say demonetisation failed’: Centre defends note ban before SC

Roy contended that some RBI officials had bypassed due procedure and aided beneficiaries in exchanging unaccounted old notes during demonetisation. He cited the RBI’s annual reports from 2016 to 2018, claiming a discrepancy between the demonetised Rs 1000 and Rs 500 notes in circulation and the figure received afterwards.

Roy sought an inquiry into criminal conspiracy, breach of trust and cheating allegations. “Given RBI’s significance, its annual reports, publicly accessible, cannot be labelled as irregular without proving any crime,” the court stated.

Nevertheless, the court declared that the gathered information alone does not indicate any potential offences prompting a detailed inquiry or investigation.

Published On:

Sep 13, 2023

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