IMPORTANT POINTS
Demonetization matters referred to larger Bench of five Judges for an authoritative pronouncement.
Court declined to suspend the bar on District Cooperative Banks from accepting deposits and exchanging demonetized notes as an interim measure.
Competent Authority commended to issue suitable Notification in respect of bar on District Cooperative Banks in utilizing demonetized notes deposited with them between 11th to 14th November 2016, within two days.
Assurance of the Attorney General that policy applicable to Public Sector Banks in that regard will be applied to District Cooperative Banks accepted.
Exemption period should be extended or not must be best left to the judgment of the Government of the day with a hope that the Government will be responsive and sensitive to the problems encountered by the common man.
It would be just and proper to withdraw all the Writ Petitions/proceedings pending in different High Courts across the country and to be heard by this Court along with the Writ Petitions which are already pending in this Court raising same or similar issues, to avoid multiplicity of hearing and conflicting decisions on the same subject matter.

Headnote:(a) Administration of justice – Financial issues of public importance – Demonetization – Answers to the questions involved may have far reaching implications – Matters referred to larger Bench of five Judges for an authoritative pronouncement. (Para 4)
       (b) Demonetization – Bar on District Cooperative Banks from accepting deposits and exchanging demonetized notes – Court declining to suspend that bar as an interim measure. (Para 6)
       (c) Demonetization – Bar on District Cooperative Banks in utilizing demonetized notes deposited with them between 11th to 14th November 2016 – Competent Authority commended to issue suitable Notification within two days. (Para 7, 8)
       (d) Demonetization – Replacement of demonetized notes offered by the District Cooperative Banks for exchange – Assurance of the Attorney General that policy applicable to Public Sector Banks in that regard will be applied to District Cooperative Banks accepted. (Para 9)
       (e) Demonetization – Period of exemption for exchange of SBNs – Plea for extension – Exemption period should be extended or not must be best left to the judgment of the Government of the day with a hope that the Government will be responsive and sensitive to the problems encountered by the common man – Court declining to issue any interim direction. (Para 10)
       (f) Demonetization – Withdrawal of Rs. 24,000/- per account holder of the Bank per week – Cash crunch – Authorities commended to ensure withdrawal to the extent notified. (Para 11)
       (g) Demonetization – Petitions for transferring writ petitions before High Courts raising same issues – Multiplicity of hearing and conflicting decisions on the same subject matter should be avoided – Petitions allowed – All similar writ petitions transferred to Supreme court – Such proceeding pending in any High Court stayed – Further directed that no other Court shall entertain, hear or decide any Writ Petition/proceedings on the issue or in relation to demonetization – Petitioners before High Courts permitted to intervene in proceedings before Supreme Court (Para 13, 14, 15, 16)
       Facts of the case:
       The demonetization is challenged in these cases.
       He following issues arise for consideration –
       (i) Whether the notification dated 8th November 2016 is ultra vires Section 26(2) and Sections 7, 17, 23, 24, 29 and 42 of the Reserve Bank of India Act, 1934;
       (ii) Does the notification contravene the provisions of Article 300(A) of the Constitution;
       (iii) Assuming that the notification has been validly issued under the Reserve Bank of India Act, 1934 whether it is ultra vires Articles 14 and 19 of the Constitution;
       (iv) Whether the limit on withdrawal of cash from the funds deposited in bank accounts has no basis in law and violates Articles 14,19 and 21;
       (v) Whether the implementation of the impugned notification(s) suffers from procedural and/or substantive unreasonableness and thereby violates Articles 14 and 19 and, if so, to what effect?
       (vi) In the event that Section 26(2) is held to permit demonetization, does it suffer from excessive delegation of legislative power thereby rendering it ultra vires the Constitution;
       (vii) What is the scope of judicial review in matters relating to fiscal and economic policy of the Government;
       (viii) Whether a petition by a political party on the issues raised is maintainable under Article 32; and
       (ix) Whether District Co-operative Banks have been discriminated against by excluding them from accepting deposits and exchanging demonetized notes.
       Finding of the Court:
       Keeping in view the general public importance and the far reaching implications which the answers to the questions may have, the matters directed to be placed before the larger Bench of five Judges for an authoritative pronouncement.
       Result: Matter placed before a larger Bench of five Judges.

ORDER

Writ Petitions are admitted.

2. Issue notice on the Writ Petitions, special leave petitions and other applications. The respondents may file reply affidavit within six weeks. Rejoinder, if any, within three weeks thereafter.

3. We have heard the learned counsel for the parties at some length. In our opinion, the following important questions fall for our consideration in this batch of petitions:

(i) Whether the notification dated 8th November 2016 is ultra vires Section 26(2) and Sections 7, 17, 23, 24, 29 and 42 of the Reserve Bank of India Act, 1934;

(ii) Does the notification contravene the provisions of Article 300(A) of the Constitution;

(iii) Assuming that the notification has been validly issued under the Reserve Bank of India Act, 1934 whether it is ultra vires Articles 14 and 19 of the Constitution;

(iv) Whether the limit on withdrawal of cash from the funds deposited in bank accounts has no basis in law and violates Articles 14,19 and 21;

(v) Whether the implementation of the impugned notification(s) suffers from procedural and/or substantive unreasonableness and thereby violates Articles 14 and 19 and, if so, to what effect?

(vi) In the event that Section 26(2) is held to permit demonetization, does it suffer from excessive delegation of legislative power thereby rendering it ultra vires the Constitution;

(vii) What is the scope of judicial review in matters relating to fiscal and economic policy of the Government;

(viii) Whether a petition by a political party on the issues raised is maintainable under Article 32; and

(ix) Whether District Co-operative Banks have been discriminated against by excluding them from accepting deposits and exchanging demonetized notes.

4. Keeping in view the general public importance and the far reaching implications which the answers to the questions may have, we consider it proper to direct that the matters be placed before the larger Bench of five Judges for an authoritative pronouncement. The Registry shall accordingly place the papers before Hon'ble the Chief Justice for constituting an appropriate Bench.

5. We may now advert to the issues which are of immediate concern. The first issue is about the restriction placed on the District Cooperative Banks to accept deposits or exchange of demonetized currency of Rs. 500/- and Rs. 1000/-. Two broad aspects have been presented before us. The first is about the complete exclusion of the District Cooperative Banks from accepting deposits or exchanging demonetized notes. The second is about the avoidable financial stress on the District Cooperative Banks because of freezing the deposited demonetized notes received by the District Cooperative Banks between 11th and 14th November 2016, which is stated to be around Rs. 8000/-Crore (Rupees Eight Thousand Crore).

6. The first point whether the decision of the Authority to forbid the District Cooperative Banks from accepting deposits and exchanging demonetized notes, may require detailed hearing. It is only upon acceptance of challenge to that decision, that the bar placed on the District Cooperative Banks can be lifted. We are not inclined to suspend that bar as an interim measure. This is especially when the decision is the outcome of financial policy which the respondents claim to have adopted on the basis of experience. In particular, an apprehension has been expressed about the possibility of demonetized notes being converted or exchanged without proper audit, control or supervision. The District Cooperative Banks, it has been urged, are not directly under the control of the Reserve Bank of India but within the purview of NABARD. The dispensation provided by NABARD is, according to the Attorney General, not in conformity with the strict regime provided under the provisions of Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934.

7. Reverting to the second aspect, of District Cooperative Banks being precluded from utilizing the demonetized notes deposited with them between 11th to 14th

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