The Supreme Court in a majority verdict on Monday upheld the Modi government’s 2016 decision to demonetise the currency notes of Rs 1,000 and Rs 500 denominations.
A five-judge Constitution bench of the Supreme Court, headed by Justice SA Nazeer, said the Centre’s decision-making process “could not have been flawed” as there was consultation between the Reserve Bank of India and the Centre.
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 BV Nagarathna, said.
Justice Nagarathna differed from the majority judgment on the point of the Centre’s powers under section 26(2) of the RBI Act. The top court’s judgment came on a batch of 58 petitions challenging the demonetisation exercise announced by the Centre on November 8, 2016.