The Delhi High Court on Monday observed the Centre’s policy to withdraw Rs. 2000 denomination banknotes came after its purpose for issuing them in the aftermath of the denomination of Rs. 1000 and Rs. 500 banknotes in November 2016 had been achieved.
The Rs 2000 banknotes were issued to after the Centre’s denomination exercise to ensure an adequate supply of money to meet the day-to-day requirements of the people, the high court said. Six years later “the Government has now decided to withdraw Rs.2000 denomination banknotes from circulation which is not being used commonly,” it added.
The court's observation came as it dismissed advocate Ashwini Upadhyay's plea challenging the Reserve Bank of India's (RBI) May 19 circular that allowed citizens to exchange Rs. 2000 denomination bank notes without providing ID proof. The High Court's verdict comes weeks after the Centre announced its decision to withdraw the Rs. 2000 notes from circulation. The banknote, however, continues to be legal tender and people have time till September to exchange the same.
The high court pointed out that courts generally do not interfere with economic policy issues, and they should not sit as an appellate authority over decisions taken by the Centre.
The division bench of the Delhi High Court Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad said Upadhyay's plea was “devoid of merit”. The high court also said the Centre’s decision for not insisting on an ID proof was to enable everybody to exchange Rs 2000 denomination bank notes.
“Therefore, it cannot be said that the decision of the Government is perverse or arbitrary or it encourages black money, money laundering, profiteering or it abets corruption,” the 13-paged judgment read.
The Rs. 2000 banknote has courted its fair share of controversy.
After the demonetisation exercise, the note was introduced to quickly remonetise glut in the cash in circulation that had been nullified post-November 8, 2016. The Rs. 500 and Rs. 1000 banknotes were rendered invalid by the announcement, and Rs. 2000 banknote was introduced to quickly achieve the value of these defunct banknotes.
Due to the large-token value of the banknote, opposition leader P. Chidambaram hit out stating that it was a way to legally store black money - or money that was undeclared or unaccounted for. Finance Minister Nirmala Sitharaman hit out at this tirade by saying, “The RBI has achieved its motive here...Opposition can say what it wants...Rs 2000 notes introduction was an attempt at remonetisation,” at an event in Mumbai.
In 2020, data from the National Crime Records Bureau also said that the notes were the most seized counterfeit currency.
Additional reporting by Mohammed Kudrati.