Tuesday, November 15, 2016

Supreme Court refuses to stay demonetisation notification

The Supreme Court on Tuesday refused to stay the November 8 government notification demonetising Rs. 500 and Rs. 1,000 currency and asked the Centre to take immediate measures to alleviate the hardships and sufferings of the traumatised common man who is "forced" to stand in queues to withdraw a little bit of his own hard-earned money. 
"Tell us, instead of forcing citizens to stand in queues for his own money... and it is traumatic for people to stand in lines for hours doing nothing, why can't you raise their cash withdrawal limit to a reasonable limit?" Chief Justice T.S. Thakur, who presided over a Bench that comprised Justice D.Y. Chandrachud, questioned the Centre. 
Noting that the apex court does not want to interfere with the government's economic policy, Chief Justice Thakur said the objective of demonetisation may be a "surgical strike" on black money, but it should not cause hardship to the common man. 
Senior advocate Kapil Sibal, appearing for one of the four petitioners, said what is portrayed as a surgical strike on black money is actually a "carpet-bombing of the common man."
"Carpenters, masons, daily wage earners, maids vegetable sellers are dependent on cash; we are only wondering if you are capable of doing anything to reduce the trauma of ordinary man?" Chief Justice Thakur asked Attorney-General Mukul Rohatgi. 
The Bench asked the Centre to file an affidavit by November 25, 2016, detailing the various measures it can take to lessen the hardship and inconvenience caused to people without hindering the larger objective of the government notification to get rid of black money and cross-border terror financing. 
"After demonetisation, the black money hoarders do not even have the money they once used to have in their pyjamas," Mr. Rohatgi submitted. 
The A-G said 3.25 lakh crore in Rs. 500/1000 notes was deposited out of 15 or 16 lakh in circulation. At least, Rs. 10 to 11 lakh crore is expected to come in. 
"Everyday we will add Rs. 10,000 crore," Mr. Rohatgi submitted. He argued that the only argument raised against demonetisation is "inconvenience."
"Some collateral damage will take place. I could not calibrate the 2 lakh ATMs, that would have brought the cat out of the bag. I could not print or keep the new money in godowns. There is some pain, we understand. But our objective is to wipe out black money and end terror financing," Mr. Rohatgi said. 
"though it is not in our or anybody's interest to have people wait in queues, I have to say that for 50 years, when others were in power, we used to wait for our Fiat car, gas and phone connection... We waited. Now, people are willing to wait," he said. 
He said the "poor man" does not anyway have excess cash. "Poor man does not have Rs. 20 lakh," the A-G said, adding that there are 22 crore Jan Dhan accounts.
"Indians are intelligent. They booked air tickets and train reservations with their black money only to withdraw them in new notes," Mr. Rohatgi submitted.
He said though there is "some pain," people can make transactions through Paytm, cards, online transfers, etc.
At this point, Mr. Sibal retorted: "Paytm is a Chinese company. And yes... now we have become a truly cashless society. Nobody has any money with them."
"Through people's money, they want to wipe out the non-performing assets of the rich. People are dying," Mr. Sibal submitted.
In his submissions, Mr. Sibal asked how banks, which are only trustees of a person's money, can restrict withdrawal.
"Under what right can you restrict my right to withdrawal?" he asked.
Mr. Sibal said the previous “demonetisation" in 1978 only dealt with high denomination notes which only comprised two per cent of the currency value in circulation. Now, Rs. 500 and Rs. 1000 notes occupy 86 per cent of the currency value.

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