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Four out of five judges in Supreme Court found no flaw in Centre’s decision on demonetisation

A five-judge bench of the Supreme Court dismissed the challenges to the Centre’s 2016 decision to demonetise Rs 500 and Rs 1,000 notes. The judgment was on a batch of 58 petitions challenging the demonetisation move announced by the Center on November 8, 2016.

A bench headed by Justice SA Nazeer gave a 4-1 verdict stating that there were no errors in the central government’s decision. Judge B.N. Nagarathna delivered the only dissenting judgment. The verdict held that Section 26(2) of the RBI Act could not be struck down as unconstitutional on the ground of excessive delegation.

 Justice BR Gavai, speaking on behalf of the bench, said that the decision-making process cannot be said to be flawed merely because the proposal was initiated by the central government.

In the majority judgement, Justice Gavai read that the move to demonetise Rs 500 and Rs 1000 notes had a reasonable nexus with the objectives it was trying to achieve. When announced in 2016, the central government claimed that the move would eradicate black money and get rid of fake currency, among other objectives.

The majority judgment also upheld the consultation between the Center and the Reserve Bank of India. The Supreme Court added that it is not essential whether the objective of the decision was achieved or not. Delivering the only dissenting judgment, Justice Nagarathna said demonetisation should have been done by law. In her judgement, she added: “Parliament is often described as a nation in miniature. It cannot be left alone in such an important subject.’

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