Court Must Not Sit As Appellate Authority Over Govt’s Decision: Delhi HC While Rejecting Plea Against ₹2000 Currency Notes’ Exchange Without Identity

The Delhi High Court while dismissing the plea challenging the exchange of Rs. 2000/- currency notes without any identity proof has held that such a decision of the Government is purely a policy decision and that the Court should not sit as an appellate authority over the decision of the Government.

A Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad observed, “Banknotes of Rs.2000 shall continue to be a legal tender and this policy is only for exchange of banknotes having denomination of Rs.2000 with other banknotes. In order to facilitate the exchange of Rs.2000 denomination banknotes with other denomination banknotes, the Government has given a window of four months to the citizens and in order to avoid inconvenience to citizens, the Government is not insisting of providing any kind of identification. As stated earlier, this decision of the Government is purely a policy decision and Courts should not sit as an Appellate Authority over the decision taken by the Government.”

The Bench was dealing with a PIL (Public Interest Litigation) filed by Advocate Ashwini Kumar Upadhyay against the Union of India (UOI), Reserve Bank of India (RBI), and State Bank of India (SBI).

The petitioner appeared in person while ASG Chetan Sharma, CGSC Apoorv Kurup, Senior Advocate Parag P. Tripathi, and Advocate Rajiv Kapur appeared for the respondents.

Facts -

A PIL was filed by the petitioner seeking a declaration that the RBI Notification dated May 19, 2023, and SBI Notification dated May 20, 2023, which permits the exchange of Rs. 2000 denomination banknotes without obtaining any requisition slip and identity proof, are arbitrary and violative of Article 14 of the Constitution of India. The petitioner submitted that out of the total denomination of Rs. 2000 banknotes, Rs. 3.62 lakh crores banknotes were in circulation and are not being commonly used for transactions, and therefore, such notes were primarily black money.

It was further contended that such notes were hoarded by the separatists, terrorists, maoists, drug smugglers, mining mafias, and corrupt people and that the 130 crore people in India have Aadhar Card which means that every family has 3-4 Aadhar Cards. The petitioner also stated that by not insisting on any form of identification at the time of exchange of Rs. 2000/- denomination banknotes to other denomination banknotes, the Government was actually encouraging persons being indulged in Benami transactions, money laundering, and drug trafficking.

The High Court after hearing the contentions of the counsel noted, “In order to ensure that there is a smooth transition of Rs.2000 denomination banknotes, which continue to be a legal tender till September, 2023 i.e. for four months, banks have provided facilities for conversion of these banknotes to other denomination banknotes. As stated earlier, the present case is not the case of demonetisation but withdrawal of Rs.2000 denomination banknotes from circulation. For this purpose, the Government has taken a decision not to insist upon requirement of identity proof for exchange of Rs.2000 denominations banknotes so that everybody can exchange the same with the other denomination banknotes.”

The Court further noted that the decision of the Government cannot be said to be perverse or arbitrary or that it encourages black money, money laundering, profiteering, or abetting corruption.

“It is well settled that decision taken by the Government in relation to the economic policies is not ordinarily interfere with by the Courts unless the decision of the Government is manifestly arbitrary. … The decision of the Government is only to withdraw Rs.2000 denomination banknotes from circulation for the reason that the purpose of issuing these denominations has achieved its purpose which was to meet the currency requirement of the economy in an expeditious manner in November, 2016 when all Rs.500 and Rs.1000 denomination banknotes were declared to be not legal tender and in order to meet the situation at that point of time, the Government took a decision to bring banknotes of Rs.2000 denomination to ensure adequate supply of money to meet the day-to-day requirements of the people”, said the Court.

The Court observed that six years after such a decision, the Government has now decided to withdraw Rs.2000 denomination banknotes from circulation which is not being used commonly, and concluded that the PIL is devoid of merits.

Accordingly, the Court dismissed the PIL.

Cause Title- Ashwani Kumar Upadhyay v. Union of India & Ors. (Neutral Citation: 2023:DHC:3807)

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