Courts should defer to legislative judgment in economic policy matters and not interfere unless the exercise of legislative judgment appears to be palpably arbitrary.

JUDGMENT

1. The instant writ petition under Article 226 of the Constitution of India has been filed by the Petitioner as a Public Interest Litigation (PIL) seeking for a declaration that the RBI Notification dated 19.05.2023 and SBI Notification dated 20.05.2023, which permits exchange of Rs.2000 denomination banknotes without obtaining any requisition slip and identity proof, is arbitrary and violative of Article 14 of the Constitution of India.

2. The Petitioner, who appears in - person, submits that out of total denomination of Rs.2000 banknotes, at present Rs.3.62 lakh crores banknotes are in circulation and are not being commonly used for transactions. He, therefore, submits that these notes are primarily black money. He submits that these notes have been hoarded by the separatists, terrorists, maoists, drug smugglers, mining mafias and corrupt people. The Petitioner contends that at present, the total population of India is around 142 crores and out of which 130 crores people have Aadhar Card which means that every family has 3-4 Aadhar Cards. He submits that out of the total 225 crore of bank accounts, 48 crores bank accounts are Jan Dhan accounts of the people who are below the poverty line. He submits that by not insisting any form of identification at the time of exchange of Rs.2000/- denomination banknotes to other denomination banknotes, the Government is actually encouraging persons who are indulged in Benami transactions, money laundering and drug trafficking etc., and therefore, this decision of the Government has to be struck down by the Court.

3. The Petitioner has placed reliance upon the various provisions of Income Tax Act, Prevention of Corruption Act, Prevention of Money laundering Act and other legislations to contend that the policy of the Government is to unearth black money and prevent corruption and, therefore, the Government itself cannot be a party to a decision which promotes corruption. He, therefore, challenges the Notifications issued by the RBI and SBI which dispenses with the requirement of a provision to provide details of identity proof for the purposes of exchanging Rs.2000 denominations banknotes with other denomination banknotes consequent to the decision of the Government to discontinue Rs.2000 denomination banknotes.

4. The Petitioner places reliance upon the following judgments in support of his contentions:

i. M/s Galaxy Transport Agencies vs. Fleet Owners and Transport Contractors & Ors., SLP (Civil) No.1266/2020.

ii. S.G. Jaisinghani vs. Union of India, (1967)2 SCR 703.

iii. State of Mysore vs. S.R. Jayaram, (1968)1 SCR 349.

iv. E.P. Royappa vs. State of T.N., (1974)4 SCC 3.

v. Maneka Gandhi vs. Union of India, (1978)1 SCC 248.

5. Per contra, Mr. Parag P Tripathi, learned Senior Counsel appearing for RBI, contends that it is well settled that Courts should not normally interfere with the policies of the Government. He submits that it is now settled that the Courts do not run contrary and sit over the decision taken by the Government in the matters of policy unless the decision of the Government is so perverse and arbitrary that it shocks the conscious of the Courts.

6. Heard the Petitioner, learned Counsel appearing for the Respondents, and perused the material on record.

7. The present decision of the Government to dispense with Rs.2000 denomination banknotes is not a decision towards demonetisation. The Notification dated 19.05.2023 issued by the RBI reads as under:

"May 19, 2023

Rs.2000 Denomination Banknotes -

Withdrawal from Circulation; Will continue as Legal Tender

The Rs.2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934, primarily to meet the currency requirement of the economy in an expeditious manner after the withdrawal of legal tender status of all Rs.500 and Rs.1000 banknotes in circulation at that time. The objective of introducing Rs.2000 banknotes was met once banknotes in other denominations became available in adequate q