Hyderabad High Court tells Centre and RBI to counter note ban pleas

Hyderabad: The Hyderabad High Court on Tuesday directed the Centre and the Reserve Bank of India to file counter affidavits on petitions moved challenging the demonetisation of Rs 500 and Rs 1000 currency notes, before December 8.

A division bench comprising Acting Chief Justice Ramesh Ranganathan and Justice A. Shankar Narayana was hearing three separate petitions by K. Srinivas, a practicing advocate, S. Venkateswara Rao, a resident of the city and former minister M.V. Mysoora Reddy against demonetisation.

The bench asked the respondents to file counter affidavits explaining the reasons for demonetisation, recommendations if any from the Central Board of RBI in this regard and reasons for not allowing DCC banks to exchange currency . The bench was not inclined to grant a stay.

Reacting to the requests of counsels for petitioners — P.V. Krishnaiah for Mr Srinivas and Y. Balaji for Mr Mysoora Reddy — for stay, the bench said that though the balance of convenience was in favour of the petitioners in this case to grant stay on the action of the Centre, it was refraining from doing so at this stage as it would cause more confusion among the public given that the new currency has already been brought into circulation.

When petitioners’ counsels tried to elaborate the hardships faced by the people, the ACJ said that the court was aware of the inconvenience caused and even he had a problem encashing a cheque.

Additional solicitor-general of India K.M. Nataraj, while defending the action of the Centre, refuted the contentions of the petitioners that the Centre has no power under Section 26 (2) of the RBI Act and only Parliament can take such decision through an Act.

The bench told Mr Nataraj to satisfy the petitioners as they are saying that the Centre has no power under Section 26 (2) of the RBI Act. The ASG said that the Centre has the power to take decision on demonetisation of currency either by way of notification or even through a fax message to the RBI.

When Mr Nataraj told the bench that the Centre has moved a petition before the Supreme Court seeking transfer of all cases in High Courts across the country on demonetisation to the SC, the bench made it clear that it will hear the matter after the Apex court passes orders on the Centre’s plea.