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IN THE HIGH COURT OF CALCUTTA
Manjula Chellur and Jaymalya Bagchi, JJ.
India's Smile & Ors. - Petitioners
Versus
Union of India & ors. - Respondents
W.P. 26085 (W) of 2013 With W.P. 2926(W) of 2014
Decided on : 20-1-2015
For the Petitioners:Rameswar Bhattacharya, Ram Uday Bhattacharya, Soumen Bhattacharya, Advocates, Ajay Ray, Advocate.
For the State :Suman Sengupta and Sanatan Panja, Advocates.
For the C.B.I. :Ashraf Ali, Advocate.
For the Union of India :Kausik Chanda, Sr. Adv., D. Bharadwaj and Sumitra Das, Advocates.
For the R.B.I :Arijit Chaudhuri, Sr. Adv., Pramit Bag and A. Sarkar, Advocates.
For the S.B.I. :Subrata Kr. Sinha, Advocate.
For the Respondent:Kaushik Dey, Advocate, Suman Das Adhikary, Advocate.
The RBI's procedure for distributing small currency and coins was adequate, and middleman trading in coins was illegal and should be prohibited.
Headnote:
SMALL CURRENCY DISTRIBUTION - RBI PROCEDURE - MIDDLEMAN TRADING - LEGAL FRAMEWORK: 1. RBI's procedure for distributing small currency and coins involves: - Annual assessment of requirement by Currency Management Department. - Allocation to regional offices based on demand and availability. - Distribution through Currency Chests and Small Coin Depots at banks. - Coin Vending Machines at RBI and commercial bank branches. - Direct supply to bulk consumers like transport corporations. 2. Middleman trading in coins is illegal and should be reported to authorities. 3. Petitioners can approach State Bank of India for direct supply of coins. 4. Court cannot interfere in RBI's functions unless there is deviation from procedure.
Fact of the Case:
Petitioners, bus operators on Route No.223 and their association, faced difficulties obtaining small coins needed for their daily operations. They alleged an artificial shortage created by middlemen who charged commissions for coin purchases. Despite RBI guidelines and procedures for direct issuance of coins to individuals and syndicates, petitioners were unable to secure adequate coins. They sought a writ of mandamus directing authorities to issue coins directly to them and prohibit middleman involvement.
Finding of the Court:
The Court found that the RBI's procedure for distributing small currency and coins was adequate and there was no shortage of coins. However, the problem arose due to middlemen who took advantage of the system and created a second line of distribution. The Court noted that the petitioners had not approached the State Bank of India, which was authorized to issue coins directly to them, on a regular basis.
Issues: 1. Whether the RBI's procedure for distributing small currency and coins was adequate? 2. Whether the petitioners were entitled to direct issuance of coins from the RBI or State Bank of India? 3. Whether middleman trading in coins was illegal and should be prohibited?
Ratio Decidendi: 1. The Court held that the RBI's procedure for distributing small currency and coins was adequate and there was no shortage of coins. The problem arose due to middlemen who took advantage of the system and created a second line of distribution. 2. The Court held that the petitioners were entitled to direct issuance of coins from the State Bank of India, which was authorized to do so under RBI guidelines. 3. The Court held that middleman trading in coins was illegal and should be prohibited.
Final Decision: The Court disposed of the writ petition by directing the petitioners to bring any instances of middleman trading in coins to the notice of the RBI or State Bank of India authorities. The petitioners were also advised to approach the police with any information they had regarding middlemen dealing with currency trading, which is prohibited under the statute.
Re: W.P. 2926(W) of 2014
This writ petition came to be filed seeking following reliefs against the respondents herein:-
"(a) A writ of or in the nature of Mandamus commanding the respondent authorities, its associates, servants and sub-ordinates, particularly the Reserve Bank of India, Calcutta, to forthwith issue small coins directly to the petitioners as also to the members of the petitioner nos.3-Association at least Rs. 1500/- per day for each vehicle.
(b) A writ of or in the nature of Mandamus commanding the respondent authorities, its associates, servants and subordinates not to compel the petitioners to purchase the coins from the touts by giving commission for such purchase.
(c) A writ of or in the nature of Certiorari commanding the respondent authorities, its associates, servants and subordinates to produce or cause to be produced all the records of the case and to certify the same, so that conscionable justice may be done by commanding the respondent authorities, its associates, servants, sub-ordinates and agents not to give effect to any such decision, if any, for not distributing such coins to the petitioners and other operators of Route No.223 directly in any manner whatsoever.
(d) A writ of or in the nature of Prohibition prohibiting the respondent authorities, its associates, servants and sub-ordinates from withholding the issuance of small coins to the petitioners as also other operators of Rout No.223 directly in any manner whatsoever.
(e) Rule Nisi in terms of prayers (a), (b), (c) and (d) as above.
(f) An ad-interim order directing the respondent authorities, each one of them, their men, agents, associates, particularly the Reserve Bank of India, Calcutta to issue small coins to the petitioners and the operators of Route No.223 directly at least Rs. 1500/- each per day till the disposal of this application.
(g) Pass such other or further order or orders and/or direction or directions as to Your Lordship may seem fit and proper.
(i) Costs and incidentals thereto."
2. Petitioner nos.1 and 2, the operators of Route No.223 and petitioner no.3, an association representing other operators about 35 in number run on the Route No.223, are before us.
3. According to them, they carry on their transport business and they are doing their business after borrowing money from financial institutions. According to them, small coins of different denominations needed per day would be about 300 rupees for each vehicle to run the transport business. In order to secure such small coins, they have to pay huge commission to the tune of 20% to 25% to third parties who collected small coins from Reserve Bank of India, Calcutta Branch. When they addressed a letter to General Manager, Coin Issue Department, Reserve Bank of India dated April 8, 2013, they received a letter intimating that the parties have to approach State Bank of India, Calcutta Main Branch for issuance of such small coins. When they approached the State Bank of India, State Bank of India, Calcutta Main Branch issued small coins directly to the denomination of 1 and 2 amounting to Rs. 10,000/- which is inadequate. Thereafter, they were not able to get any small coins in spite of guidelines and the procedure which contemplates issuance of small coins to individual like bus operators syndicate apart from other public bodies. Therefore, they have approached the Court seeking direction to the respondent authorities to directly issue small coins to the operators as per their requirement whenever they approach the authorities. As a matter of fact, this matter was filed before the learned Single Judge and the same was referred to this Court as another petition being W.P. No.26085(W) of 2013 was pending in a public interest litigation.
Re: W.P. 26085(W) of 2013
4. This writ petition came to be filed seeking following reliefs against the respondents herein:-
"(a) Admission of this writ petition as Public Interest Litigation.
(b) A writ in the nature of Mandamus commanding the respon
