Narendra Modi government today surpassed a major legal hurdle after the Supreme Court refused to stay its notification demonetising Rs 500 and Rs 1,000 currency notes but told it to reduce the inconvenience of the people, saying “you cannot have surgical strike” against them.
“You (Centre) can have a surgical strike against blackmoney but you cannot have surgical strike against the people of the country,” a bench comprising Chief Justice T S Thakur and Justice D Y Chandrachud said, pointing to the long queues at banks and ATMs.
“Carpenters, maids, vegetable sellers are dependent on cash. Are you capable of reducing their trauma? Your aim is to wipe out blackmoney but people are traumatised standing in queues for hours doing nothing,” the bench said.
“They (Centre) call it surgical strike. You (Kapil Sibal appearing for a petitioner) call it carpet bombing. The object of such measures is against the people hoarding cash,”it said.
While observing that fighting the blackmoney menace was a “laudable” step, it asked the Centre to “consider taking steps to ease the pain of the common people” and also consider raising the limit of cash withdrawals.
“Why can’t it be raised to a reasonable level so that there is less number of people standing in the queue,” the bench said, adding that the inconvenience part has to be looked into.
The government told the apex court that the situation was being constantly monitored at the highest level and just now, it has been decided that the banks would allow from today the withdrawal of Rs 50,000 per current account per week and the facilities would also be available to companies.
The apex court did not issue notices to the Centre or the RBI and asked them file a comprehensive affidavit detailing steps taken so far and other proposed measures to ameliorate the harassment and inconvenience caused to citizens due to demonetisation of the high value currency notes.
The government, represented by Attorney General Mukul Rohatgi, came fully prepared to defend its ambitious step aimed at curbing blackmoney and counterfeit currency used in financing terror and extremist violence saying the target was to “catch the big fish” which the previous governments could not do in last 50 years.
The bench concluded the day’s hearing by asking the Centre and the RBI to be open to suggestions from various stakeholders and posted the matter for further hearing on November 25 of four PILs questioning the November 8 demonetisation notification.
“Two lakh ATM machines could not have been re-calibrated in advance to be in tune with the new notes as the cat would have been out of the bag,” Rohatgi said, adding that “secrecy is the key to such actions”.
The Attorney General said there were approximately one lakh branches of various banks and two lakh ATMs besides the post offices across the country to dispense cash to the people and restriction on withdrawal was there to ensure that the money be paid to maximum number of people.
He responded to the submission of Sibal by stating that the senior Congress leader was advancing arguements on “complete misconception” that demonetisation was against RBI provisions.
When Rohatgi said that economic policy matters should not be interfered with by the courts, the bench responded saying “We will not interfere with the economic policy of government, but are only bothered about the hardship caused to people”.
Sibal, appearing for one Adil Alvi, said he has also challenged the constitutional validity of the notification as the provision of the RBI has not been complied with.
He referred to section 26(2) of RBI Act and said the government was not authorised to demonetise all series of currency notes of high denominations in one go.
There has to be a legislation if the government wants to demonetise the entire series of Rs 500 and Rs 1,000 currency notes, Sibal said, adding that in 1978, a law was brought to demonetise the currency notes of particular denominations.
Sibal then highlighted the inconvenience faced by the common people in remote areas like Bastar in Chhattisgarh, Uttarakhand, Himachal Pradesh and northeastern states in getting their own money from banks and ATMs and said it was a “surgical strike against the common man.”
“How can there be a cap in withdrawing my own money, which is also taxed,” he said and referred to the promise written on a Rs 500 currency note.
He said that 11 people have died so far and private hospitals are not taking cash for treatment.
“Government says it is a surgical strike on black money.
It is a carpet bombing on the common man,” Sibal said.