Delhi High Court Rejects PIL Opposing RBI’s Decision To Withdraw ₹2,000 Notes

The petitioner had contended in his plea that the RBI has no power to withdraw 2,000-rupee currency notes from circulation and only the Centre could have taken a decision in this regard

Written by Shruti Chaturvedi July 3, 2023

Delhi HC dismisses PIL challenging RBI’s decision to withdraw ₹2,000 notes

A public interest litigation (PIL) challenging the Reserve Bank of India’s (RBI) choice of eliminating 2,000 rupee banknotes from circulation was dismissed by the Delhi High Court on Monday.

The RBI had previously announced on May 19 the removal of 2,000 rupee notes from circulation.

Until September 30, 2023, the central bank has asked banks to offer 2,000 note deposit and exchange services.

After hearing the arguments from the lawyers for the petitioner and the RBI on May 30, a bench of chief justice Satish Chandra Sharma and justice Subramonium Prasad rejected the argument on which it had reserved its decision on the PIL.

The judgment’s comprehensive copy is awaited.

Rajneesh Bhaskar Gupta, the petitioner, argued in his argument that only the Centre could have made the decision to remove the 2,000-rupee currency notes from circulation and that the RBI lacks the authority to do so.

According to the petition, RBI lacks the independent authority to make such a decision under the Reserve Bank of India Act.

Additionally, it claims that the decision to stop accepting the banknote only four to five years after it has been in circulation is “unjust, arbitrary, and against the public policy.”

The PIL asserts that the impugned circular does not state that the central government has made the decision and that the RBI has not provided any justifications other than the “Clean Note Policy” for making such a “big arbitrary decision” to remove banknotes from circulation “without analysing the anticipated problems of the public at large.”

The petitioner claims that small vendors and shops have already stopped accepting notes in the amount of 2,000.

The petition stated that the RBI has not yet clarified what benefits withdrawing the denomination of the 2000 banknote from circulation will bring to the RBI or the national economy.

While reiterating that it is not demonetisation, the RBI had argued that the removal of the 2,000 was a comprehensive exercise under the currency management system.

The 2,000 note is not being used as currency and has essentially been kept out of circulation for some time, according to attorney Parag P Tripathi for the RBI.

He added that the condition of the 2,000 notes had declined over time.

Following the removal of the highest-value currency notes from circulation, the court previously rejected lawyer and BJP leader Ashwini Upadhyay’s appeal challenging the RBI’s permission to exchange 2,000 currency notes without any identity proof, stating that it was done to ensure a seamless transition of 2,000 denomination banknotes.

In its ruling on May 29, the court stated, “The government is not insisting on providing any kind of identification in order to avoid inconvenience to citizens. The government has given the citizens a window of four months to facilitate the exchange of 2,000 denomination banknotes with other denomination banknotes.

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