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Supreme Court Upholds Demonetisation, Says No Flaw In Centre’s Decision-Making 

Four out of the five judges in the SC bench ruled in favour of the 2016 central government move which had turned the Rs 500 and Rs 1000 currency notes “illegal tender” 

A five-judge bench of the Supreme Court has rejected the pleas against Centre’s 2016 decision to demonetise the Rs 500 and Rs 1000 currency notes. The judgement was on a bunch of 58 petitions that challenged the demonetisation move announced by the Centre on November 8, 2016. 

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The bench, headed by Justice S A Nazeer, issued a 4-1 verdict stating that there were no flaws in the central government’s decision-making. Justice B.N. Nagarathna gave the sole dissenting judgment. 

The verdict ruled that Section 26(2) of the RBI Act cannot be struck down as unconstitutional on the ground of excessive delegation. Speaking on behalf of the bench, Justice B R Gavai said that the decision-making process cannot be deemed faulty merely because the proposal was initiated by the central government.   

In the majority judgement, Justice Gavai read out that the move to demonetise the Rs 500 and Rs 1000 currency notes, had a reasonable nexus with the objectives it sought to achieve.  

While making the announcement in 2016, the central government claimed that the move will eradicate black money and get rid of fake currency, in addition to other objectives. 

The majority judgement also attested to the consultation between the Centre and the Reserve Bank of India. The apex court added that it is not relevant whether the objective behind the decision was achieved or not. 

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Delivering the sole dissenting judgement, Justice Nagarathna said that demonetisation should have been exercised by an act of legislation. In her judgement, she added, “Parliament is often referred to a nation in miniature. It cannot be left alone on such a subject of importance.” 

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