Justice B.V. Nagarathna, the dissenting judge of the Supreme Court in the demonetisation verdict, on Monday held that the banning of Rs 500, and Rs 1,000 notes was 'vitiated' and 'unlawful'. The demonetisation had to be done through legislation and not through a gazette notification, she said.
The five-judge Constitution bench comprising S. A. Nazeer, B. R. Gavai, A. S. Bopanna, V. Ramasubramanian and Nagarathna pronounced the verdict.
Justice Nagarathna holds that there was no independent application of mind by the Reserve Bank of India for demonetisation. Justice Nagarathna further added that the entire exercise was carried out in 24 hours.
Nagarathna added that on looking at the records submitted by RBI, there are words "as desired by the Central Govt"...this demonstrates there was no independent application by the RBI, reported Live Law.
"In my view, the power of the central government being vast has to be exercised through plenary legislation rather than by executive action by the issuance of notification. It is necessary that Parliament, which consists of the representatives of the people of the country, discusses the matter and thereafter, approves the matter," she said, reported PTI.
She also said that the measure is declared unlawful purely on legal grounds and not on the basis of objects.
The measure was well-intentioned and thought of if targeted evils such as black money, terror funding and counterfeiting, she pointed out.
RBI's opinion was sought by the Centre on the proposal. Such an opinion given by the RBI cannot be constructed as a "recommendation" under Section 26 (2) of the RBI Act, Live Law reported.
It has been brought on record that 98 per cent of banknotes were exchanged. "This suggests that the measure itself was ineffective....Any series under Section 26(2) RBI Act cannot mean all series," she pointed out.
The apex court in a 4:1 majority verdict upheld the government's 2016 decision to demonetise the Rs 1,000 and Rs 500 notes, saying the decision-making process was reasonable.
