Verdict on demonetisation: One ’dissenting’ SC judge called note ban ’illegal’

Justice BV Nagarathna was the only dissenting voice in the five-judge bench of the Supreme Court which gave its verdict on the Centre's 2016 decision on demonetisation. Justice Nagarathna differed from the majority judgment on the point of the Centre's powers under section 26(2) of the RBI Act.

Justice B V Nagarathna dissented from the majority judgment on the point of the Centre's powers under section 26(2) of the RBI Act and said the scrapping of the ₹500 and ₹1,000 series notes had to be done through a legislation and not through a notification.

Justice Nagarathna, in her minority verdict, holds that demonetisation of ₹500 and ₹1,000 currency notes was vitiated, unlawful."No independent application of mind by RBI, only opinion sought which cannot be said to be recommendation," said Justice Nagarathna in her verdict. "Parliament cannot be left aloof on issue of such critical importance for country," Justice Nagarathna of SC further said on demonetisation.

Also read: Demonetisation was not 'unreasonable' or hit by doctrine of proportionality: SC

“Parliament should have discussed law on demonetisation, process should not have been done through gazette notification,” said Justice Nagarathna.

The bench, also comprising justices B R Gavai, A S Bopanna and V Ramasubramanian, said the Centre's decision-making process could not have been flawed as there was consultation between the RBI and the Union government.

The top court's judgment came on a batch of 58 petitions challenging the demonetisation exercise announced by the Centre on November 8, 2016.

The court said the notification dated November 8, 2016, which announced the decision to scrap the high-value currency notes, cannot be said to be unreasonable and struck down on the ground of decision-making process.

The apex court said it is not relevant whether the objective behind the decision was achieved or not.

"The notification dated November 8, 2016 valid, satisfies test of proportionality," the bench, also comprising justices B R Gavai, A S Bopanna, V Ramasubramanian and B V Nagarathna, said.

*with inputs from agencies