S.1 Short title, extend and commencement

       (1) This Act may be called the High Denomination Bank Notes (Demonetisation) Act, 1978.
       (2) It extends to the whole of India.
       (3) It shall be deemed to have come into force on the 16th day of January, 1978.

S.2 Definitions

       In this Act, unless the context otherwise requires,-
       (a) "bank" means-
       (i) a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
       (ii) the State of India constituted under the State Bank of India Act, 1955 (23 of 1955).
       (iii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959.);
       (iv) a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970.);
       (v) a regional rural bank established under sub-section (1) of section 3 of the Regional Rural Banks Act, 1976; (21 of 1976.)
  &

S.3 High denomination bank notes to cease to be legal tender

On the expiry of the 16th day of January, 1978, all high denomination bank notes shall, notwithstanding anything contained in section 26 of the Reserve Bank of India Act, 1934 (2 of 1934.), cease to be legal tender in payment or on account at any place.

S.4 Prohibition of transfer and receipt of high denomination bank notes

Save as provided by or under this Act, no person shall, after the 16th day of January, 1978, transfer to the possession of another person or receive into his possession from another person any high denomination bank note.

S.5 Declaration of high denomination bank notes by bank notes and Government treasuries

       (1) Every bank and Government treasury shall prepare and send to the Reserve Bank in the manner provided in this section a return showing separately under each denominational value the total value of high denomination bank notes of that value held by it at the close of business on the 16th day of January, 1978 and the distinctive numbers of high denomination bank notes of that value:
       Provided that a bank or a Government treasury in which the currency chest of the Issue Department of the Reserve Bank has been established shall also submit a separate return showing separately under each denominational value the total value of high denomination bank notes held in such currency chest at the close of business on the 16th day of January, 1978 and the distinctive numbers of high denomination bank notes of that value.
       (2) Every such return shall

S.6 Exchange of high denomination bank notes held by banks and Government treasuries

       (1) A bank other than a public sector bank may obtain from the Reserve Bank or a public sector bank an equivalent amount in exchange for the high denomination bank notes declared by it in the return referred to in section 5 by credit to an account maintained with the Reserve Bank or a public sector bank or in bank notes.
       (2) A public sector bank may obtain from the Reserve Bank in equivalent amount in exchange for the high denomination bank notes declared by it in the return referred to in section 5 or the high denomination bank notes received by it in exchange under sub-section (1) by credit to an account with the Reserve Bank or in bank notes.
       (3) A Government treasury may obtain from the Reserve Bank an equivalent amount in exchange for the high denomination bank notes declared by it in the return referred to in section 5 in bank note

S.7 Exchange of high denomination bank notes held by other persons

       (1) Notwithstanding anything to the contrary contained in the Reserve Bank of India Act, 1934 (2 of 1934.), any high denomination bank note owned by a person other than a bank or Government treasury may be exchanged after the 16th day of January, 1978, only on tender of the note-
       (a) where the high denomination bank note is owned by an individual, by the individual himself; or where the individual is absent from India, by the individual concerned or some person duly authorised by him in this behalf; or where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf;
       (b) where the high denomination bank note is owned by a Hindu undivided family, by the karta, and, where the karta is absent from India or is mentally incapacitated from attending to his affai

S.8 Exchange of notes after the time limit specified in section 7

       (1) Notwithstanding anything contained in section 7, any person who fails to apply for exchange of any high denomination bank notes within the time provided in that section may tender the notes together with the declaration required under that section to the Reserve Bank at any of the places specified in clause (a) of sub-section (2) of that section, not later than the 24th day of January, 1978 together with a statement explaining the reasons for his failure to apply within the said time limit:
       Provided that if such person resides in a place not within convenient reach of the sub-office, office or branch of the Reserve Bank at any of the said places or it, by reason of age, infirmity or illness, he is unable to attend thereat, he may forward the high denomination bank notes he desires to exchange together with three copies of the declaration required under section 7 by insured post

S.9 Closing of banks and Government treasuries

       (1) All banks and Government treasuries shall be closed on the 17th day of January, 1978 for the transaction of all business except the preparation and presentation or, as the case may be, receipt of the returns referred to in section 5.
       (2) Subject to the provisions of sub-section (1), the 17th day of January, 1978 shall, for the purposes of the Negotiable Instruments Act, 1881 (26 of 1881.), be deemed to be a public holiday notified under that Act.

S.10 Penalties

       (1) If any bank fails to prepare and present within the time and in the manner provided by section 5 any return referred to in that section, or presents any return under that section which is false in any material particular, the manager or other person in charge of the bank shall, unless he proves that the failure took place, or the false return was presented, without his knowledge or that he exercised all due diligence to prevent the same, be punishable with imprisonment for a term which may extend to three years, or with fine, or with both.
       (2) Whoever knowingly makes in any declaration under section 7 any statement which is false or only partially true or which he does not believe to be true or contravenes any provision of this Act or the rules made thereunder shall be punishable with imprisonment for a term which may extend to three years or with fine or with both.
 &n

S.11 Special provisions relating to offences

       (1) No prosecution for an offence punishable under this Act shall be instituted except with the previous sanction of the Central Government.
       (2) Notwithstanding anything in section 29 of the Code of Criminal Procedure, 1973 (2 of 1974.), the court of a Magistrate of the first class or the court of a Metropolitan Magistrate trying an offence punishable under this Act may impose a fine exceeding five thousand rupees.

S.12 Protection of action taken in good faith

No suit, prosecution or other legal proceeding shall lie against the Government or any officer of the Government or against the Reserve Bank or any public sector bank or any officer of such bank for anything done or intended to be done in good faith under this Act.

S.13 Removal of difficulties

       If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by notification in the Official Gazette, make any order, not inconsistent with the provisions of this Act, which appears to it to be necessary for the purpose of removing the difficulty:
       Provided that every such order shall, as soon as may be after it is made be laid before each House of Parliament.

S.14 Power to make rules

       (1) The Central Government may make rules for giving effect to the provisions of this Act.
       (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-
       (a) the custody and disposal of high denomination bank notes tendered for exchange under this Act and of the declarations in respect thereof;
       (b) the time within which applications referred to in sub-section (5) of section 6 may be made; and
       (c) the time within which and the manner in which the State Bank and public sector banks notified under clause (c) of sub-section (2) of section 7 may claim reimbursement from the Reserve Bank of payments made by them in respect of high denomination bank notes accepted b

S.15 Repeal and saving

       (1) The High Denomination Bank Notes (Demonetisation) Ordinance, 1978 is hereby repealed.(1 of 1978.)
       (2) Notwithstanding such repeal, anything done or any action taken under the ordinance so repealed shall be deemed to have been done or taken under the corresponding provisions of this Act.

Sch.1 FORM OF DECLARATION

       [See section 7 (2)]
       FORM OF DECLARATION
       (To be filed in triplicate)
       1. Name of the owner of the bank notes (In block letter)
       2. Address: Office
       Residence
       3. Status, i,e., whether individual, Hindu undivided family, company, firm, etc.
       4. (a) Whether assessed to income-tax;
       (b) If so, name of the Income-tax Circle/Ward/District where last assessed;
       (c) Permanent Account Number.
       5. If engaged in business, profession or vocation, name in which such business is carried on.