Karnataka High Court Dismisses Petition on Demonetisation, Calls Decision ‘Laudable’

A customer waits to deposit 1000 Indian rupee banknotes in a cash deposit machine at bank in Mumbai, India, November 8, 2016. REUTERS/Danish Siddiqui

A customer waits to deposit 1000 Indian rupee banknotes in a cash deposit machine at bank in Mumbai, India, November 8, 2016. Credit: Reuters/Danish Siddiqui

New Delhi: Dismissing a petition against demonetisation, Karnataka high court has upheld certain restrictions that accompanied the decision saying they are matters for central government and RBI to decide.

In his order, Justice Ashok B Hinchigeri observed that “laudable objectives” to tackle the menaces of fake currency notes, black money and terrorism cannot be achieved without imposing restrictions. “…but in a situation of this nature, no directions, much less time-bound directions, can be given to the government of India and the RBI,” he said.

The order was issued by the Karnataka high court on a writ petition seeking the removal of the cap on withdrawals imposed by government and RBI following the demonetisation of Rs 500 and Rs 1000 currency notes effective November 9.

“In the larger interests of the society, when a comprehensive mission is being accomplished, certain regulatory measures during the period of transition are bound to affect the interests of some sections of people,” the order said.

“There cannot be any dispute that the collateral damage, if any on any section is to be minimised, if it cannot be avoided. What steps are to be taken, are the matters for the central government and RBI to decide,” it added.

Observing that the menaces of black money, fake currency and terrorism are “hydra-headed monsters”, the order said, “when one head of the monster is chopped off, it would raise its other ugly heads. Stamping them out is indeed a herculean task.”

The order dated December 6 also noted that it is impossible for any policy maker to anticipate all the difficulties and contingencies.

“As and when the difficulties are noticed in the course of implementing the policy, the necessary remedial measures have to be taken,” it said. The administrators and legislators are entitled to frame policies and take such administrative decisions, as they think necessary in the public interest, according to the court.

“The courts should not ordinarily interfere with the policy decisions unless they are manifestly illegal and arbitrary,” the judge observed.

The order recorded that the petitioners’ appreciation of demonetisation policy is discernible and it is a major initiative to eradicate black money. “While petitioners welcomed the scheme of demonetisation, their only grievance is over the limitation imposed on withdrawing the amount from the banks,” it said.