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2023 Supreme(Del) 8296
IN THE HIGH COURT OF DELHI AT NEW DELHI
SATISH CHANDRA SHARMA, C, Subramonium Prasad, JJ
RAJNEESH BHASKAR GUPTA – Appellant
Versus
RESERVE BANK OF INDIA – Respondent
W.P.(C) 7487/2023 & CM APPL. 29068/2023
For the Appellants/Petitioners: Mr. Sandeep P Agrawal, Mr. Rishikesh Kumar, Mr. Priyankar Tiwary, Mr. Tanya Chanda, Mr. Tushar Sannu
For the Respondents: Mr. Parag P Tripathi, Mr. Ramesh Babu M R, Ms. Nisha Sharma, Ms. Manisha Singh, Ms. Tanya Choudhary, Mr. Rohan Srivastava, Ms. Vasundhara Bhakru, Mr. Chetan Sharma, Mr. Apoorv Kurup, Mr. Saurabh Tripathi, Mr. Vikramaditya Singh, Mr. Akhil Hasija
The Reserve Bank of India has the authority to manage currency and issue directions on banknotes, and the withdrawal of ₹2000 notes does not constitute demonetization.
Headnote:(A) Reserve Bank of India Act, 1934 - Section 24(1) - Public Interest Litigation - Withdrawal of ₹2000 currency notes - Petitioner challenged RBI Notification dated 19.05.2023, asserting it contravenes statute - Court upheld Notification as valid within RBI's currency management powers, ruling that the notes remain legal tender (Paras 1-24).
(B) Judicial Review - The scope of judicial review in economic policy decisions is limited, focusing on legality, not wisdom or appropriateness - Courts should not interfere unless decisions are arbitrary (Paras 16-24).
Facts of the case:
The Petitioner sought to quash a Notification by RBI regarding the withdrawal of ₹2000 denomination banknotes from circulation under ‘Clean Note Policy’, arguing lack of RBI authority.
Findings of Court:
RBI has authority to direct banks regarding currency management; withdrawal does not equal demonetization; ₹2000 notes remain legal tender.
Issues: Whether RBI had the authority to withdraw circulation of ₹2000 denomination notes; effect of the Notification on the public.
Ratio Decidendi: The Notification is a direction for currency management, within RBI's statutory framework; no illegality established in RBI actions concerning currency management.
Result: Writ Petition dismissed.
JUDGMENT
SATISH CHANDRA SHARMA, CJ
1. The present Public Interest Litigation has been filed by the Petitioner seeking an appropriate writ, order or direction for quashing the Notification issued by the Reserve Bank of India (hereinafter referred to as „the RBI‟) vide press release dated 19.05.2023, bearing RBI/2023-24/32 DCM(Plg) No.S-236/10.27.00/2023-24 (hereinafter referred to as „the Notification in question‟), and all other subsequent notifications in this regard. The Petitioner has prayed for the following prayers:
“(a) Allow the present writ petition and subsequently issue the writ of mandamus/certiorari or any other appropriate writ or order or direction quashing the RBI Notification/press release vide RBI/2023-24/32 DCM(Plg) No.S- 236/10.27.00/2023-24 dated May 19, 2023 and all other subsequent notifications in this regard whereby the RBI has taken arbitrary unreasonable decision to withdraw the Rs.2000 denomination banknotes from circulation under the clean note policy or otherwise.
(b)Pass an order directing to the Respondent no.1 & 2 i.e. RBI and Ministry of Finance, Govt, of India to issue notification/circular for public at large clarifying the estimated life span of each denomination banknote which are presently on circulation and also estimated time/year of being withdrawn from circulation in future by RBI under Clean Note Policy or otherwise.
(c) Pass an order directing to the Respondent no.1 & 2 i.e. RBI and Ministry of Finance, Govt, of India not only to mention year of printing on each banknote but also estimated life span of such banknote in view of the Clean Note Policy of the RBI.
(d) Pass an order directing to the Respondent no. 1 & 2 i.e. RBI and Ministry of Finance, Govt, of India to inform the public at large by appropriate notification/circular at least one year before as and when any banknote of any denomination is to be withdrawn from circulation by the Central Govt, or RBI under Clean Note Policy or otherwise.
(e) Pass an order directing to the Respondent no.1 & 2 i.e. RBI and Ministry of Finance, Govt, of India to issue notification/circular to all the banks removing the deadline/last date of depositing/exchanging the denomination of Rs. 2000/- banknote from circulation under Clean Note Policy or otherwise, which is now 30th September, 2023.
(f) Pass any other order (s) as deemed fit and proper in the interest of the public at large.”
2. The Notification in question reads as under:
“RBI/2023-24/32
DCM(Plg) No.S-236/10.27.00/2023-24
May 19, 2023
The Chairman / Managing Director/ Chief Executive Officer All Banks
Dear Sir/Madam,
₹2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tender
₹2000 denomination banknote was introduced in November 2016 under Section 24 (1) of RBI Act, 1934 primarily to meet the immediate currency requirement of the economy after withdrawal of the legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time. With fulfilment of the objective of introduction of ₹2000 denomination and availability of banknotes in other denominations in adequate quantity, printing of ₹2000 banknotes was stopped in 2018-19.
2. Further, majority of the ₹2000 denomination notes were issued prior to March 2017, have completed their estimated lifespan and are not observed to be commonly used for transactions anymore. Therefore, it has been decided that, in pursuance of the “Clean Note Policy” of the Reserve Bank of India, the ₹2000 denomination banknotes shall be withdrawn from circulation. The ₹2000 banknotes will continue to be legal tender.
3. Accordingly, to implement the decision stated above, the following plan of action has been formulated which, the banks shall follow meticulously:
A. Handling of existing stock and receipts
All banks shall discontinue issue of ₹2000 denomination banknotes with immediate effect. ATMs/Cash Recyclers may also be reconfigured accordingly.
Banks holding Currency Chests (CCs) shall ensure that no withdrawal of ₹2000 denomination
