Mr. Udaya Sankar Samudrala with Mr. Sujit Upadhyay and Mr. Shivesh Upadhyay, Advocates for the Petitioners-Applicants.

Mr. D.P. Singh, Advocate for Respondent Nos.1 to 3.

Mr. Venkatesh Dhond, Senior Advocate with Mr. Dhaval Patil, Mr. Shreyas Menkudale, Advocates, i/by K. Ashar & Co., for Respondent Nos.4 to 6.

Mr. Arjun Gupta, Advocate for Respondent Nos.7 and 8.

CORAM : A.S. CHANDURKAR & M.M. SATHAYE, JJ

DATE : 27^TH FEBRUARY 2025.

ORAL JUDGMENT : { Per A.S. Chandurkar, J. }

1. Rule. Rule made returnable forthwith and heard learned counsel for the parties. By a Notification dated 8th November 2016 issued by the Ministry of Finance, specified bank notes in the denomination of Rs.500/- and Rs.1,000/- were declared not to be legal tender. The said specified bank notes were to be recalled in the manner specified in the said notification from 10th November 2016 to 30th December 2016. The time to deposit such specified bank notes in the bank account of an individual was permitted till 30th December 2016. It is the case of the petitioners that they jointly were holding aforesaid specified bank notes of the value of Rs.20,00,000/- on 8th November 2016. They intended to deposit the same in their respective bank accounts by 30th December 2016. However on 26th December 2016, a search and raid was conducted at their residence and specified bank notes of the value of Rs.20,00,000/- as well as silver ingots for the value of Rs.26,99,320/- came to be seized. A Panchanama dated 26th December 2016 came to be prepared by the Police Authorities. The

petitioners received summons from the Assistant Director of Income Tax, Unit-III, Kolhapur on 28th December 2016 and 6th January 2017 summoning them for recording their statements under Section 131 of the Income Tax Act, 1961. After their statements were so recorded, the Assistant Director of Income Tax (Investigation), Unit-III, Kolhapur issued a letter dated 10th January 2017 to the Police Inspector, Shahuwadi Police Station, Kolhapur in which it was stated that on the basis of enquiries made, the said office had decided not to seize the cash of Rs.20,00,000/- and silver ingots at the said juncture. The necessary information was to be forwarded to the jurisdictional Assessing Authority. Acting on the said communication, the Police Inspector, Shahuwadi Police Station on 14th January 2017 informed the petitioners about the aforesaid and directed them to take back the specified bank notes of the value of Rs.20,00,000/- as well as the silver ingots. After receiving the same, the petitioners on 17th January 2017 visited the specified office of the Reserve Bank of India, Mumbai to deposit the aforesaid notes. The same were however not accepted and the petitioners were informed that after 30th December 2016 it was not permissible to accept the same. After issuing a notice in that regard, the petitioners have approached this Court praying that the 4th respondent – the General Manager, Department of Currency Management, Reserve Bank of India be directed to accept the aforesaid specified bank notes.

2. Mr. Udaya Sankar Samudrala, learned counsel for the petitioners submitted that the specified bank notes of the value of Rs.20,00,000/- came to be seized from the petitioners prior to 30th December 2016. The said notes remained in custody with the Police Authorities until 10th January 2017 when the Income Tax Authorities stated that they did not intend to seize the specified bank notes worth Rs.20,00,000/-. The said specified bank notes were thus returned to the petitioners on 14th January 2017 which was after the designated date of 30th December 2016 by which time such exchange was permissible. The petitioners could not be blamed for the aforesaid and it was the duty of the Police Officers to specifically note the numbers of the said specified bank notes. The same was however not done; thus resulting in difficulties in receiving an amount equivalent to the same. He referred to the affidavit-in-reply filed