New Delhi: India’s Supreme Court on Monday upheld the legality of the government decision in 2016 to demonetise 86% of the country’s cash in circulation, saying the decision was taken in consultation with the central bank and followed due process.
A five-judge bench of the country’s top court passed the verdict by a majority on a batch of petitions questioning the move. One out of the five judges wrote a dissenting opinion.
“The...notification dated 8th November 2016 does not suffer from any flaws in the decision-making process,” Justice B R Gavai, one of the four judges who agreed on the decision, said in a written opinion.
The petitioners included lawyers, a political party, co-operative banks and individuals.
India’s former finance minister, P Chidambaram was among the lawyers who argued against the note ban measure.
In November, 2016, Prime Minister Narendra Modi personally led the shock move to outlaw 86% of the cash in circulation to target undeclared “black money” and fight corruption.
But the move, widely known as demonetisation, badly hurt India’s cash-dependent economy. Hundreds of thousands of people lined up outside banks for days to exchange their cash savings for legal tender.
Despite the chaos caused, many people supported demonetisation after Modi framed the decision as a fight for the poor against the corrupt rich.
Some of the petitioners had argued that the recommendation to ban or declare any series of banknotes invalid should have come from the Reserve Bank of India and not from the government.
India’s main opposition Congress party said Monday’s decision by the top court said nothing about the impact of demonetisation, which the party called “a singularly disastrous move.” “The majority Supreme Court verdict deals with the limited issue of the process of decision-making, not with its outcomes,” Jairam Ramesh, the party’s spokesperson said in a statement.