#ConstitutionBench of the #SupremeCourt to continue hearing petitions challenging the #Demonetization of Rs 500 & Rs 1000 currency notes by Central Govt in 2016. Senior Advocate Shyam Divan is set to begin his submissions today. #SupremeCourtofIndia #Demonetisation

Y'day, Senior Advocate @P. Chidambaram informed the Bench that the central govt was still holding back four crucial documents that they had been asked to furnish. #SupremeCourtofIndia #Demonetisation livelaw.in/top-stories/ce…

@P. Chidambaram asked the Supreme Court to declare that the demonetisation decision and the decision-making process were flawed. "This will prevent the government from embarking on such a misadventure in future." #SupremeCourtofIndia #Demonetisation livelaw.in/top-stories/su…

Watch the live stream of the #ConstitutionBench proceedings here. Follow this thread for live updates. #SupremeCourtofIndia #Demonetisation youtube.com/watch?v=d7LyaF…

Bench assembles. #SupremeCourtofIndia #Demonetisation

Senior Advocate Shyam Divan begins his submissions. "First, there is a violation of FRs and constitutional rights - Aa 14, 21, 300A. Second, Specified Bank Notes Act, 2017 imposes a responsibility. Third, the scope of S 26(2)." #SupremeCourtofIndia #Demonetisation

Divan takes the court through the ques framed in the order by which the demonetisation challenge was referred to a #ConstitutionBench. "My primary focus is going to be on ques 1,2,3,5 & 6." #SupremeCourtofIndia #Demonetisation

Divan reads out from other relevant #SupremeCourt orders. #SupremeCourtofIndia #Demonetisation

Divan reads out from an affidavit of the Union of India in which it is claimed that the govt had no legal duty to issue any notification extending the grace period and that the petitioner had no legal right to claim a grace period. #SupremeCourtofIndia #Demonetisation

Divan: My client is an Indian citizen who went abroad on Apr 11, 2016. When the announcement came, there was an assurance from the PM & the RBI that Dec 30 was the deadline, but even after that he would be able to exchange demonetised notes. #SupremeCourtofIndia #Demonetisation

Divan: He had withdrawn 1.62 lakh rupees. On Feb 3, 2017, he returned and tried to exchange the money. But his application was rejected. An ordinance was passed saying that no exchange would be allowed post Dec 31. #SupremeCourtofIndia #Demonetisation

Divan: FEMA did not apply to my client, because he had house and property in India and had kept money in India. So, when he came back to India, he was left with no choice. There was no recourse. The govt could not have taken away my property. #SupremeCourtofIndia #Demonetisation

Nazeer J: Is the money still w you? Divan: The money is still w me. There was a protective statement made by the then AG preventing action against people like me who kept demonetised money...otherwise this was a ground to be prosecuted. #SupremeCourtofIndia #Demonetisation

Divan, referring to RBI Annual Report 2017-18: Look at two figures in parentheses. When you add 47.8% to 38.6%, therefore the percentage in value comes to 86.4% of the total currency in circulation. Enormous! #SupremeCourtofIndia #Demonetisation

Divan: As a benchmark of fairness and reasonableness...I thought the Prime Minister's speech was fair and reasonable. But now, to depart from that and deprive a person like my client... Reads out from the speech of PM Narendra Modi. #SupremeCourtofIndia #Demonetisation

Divan refers to the controversial Nov 8 notif issued by the Ministry of Finance, notices issued by RBI & PIB, press release, etc. "The representation made was Dec 31 was NOT going to be a hard stop. Everyone was speaking in one voice." #SupremeCourtofIndia #Demonetisation

Divan: The same assurance was made by the PM, govt bureau, finance ministry notification, press bureau, RBI, press release...Everyone was speaking in one voice! #SupremeCourtofIndia #Demonetisation

Divan: The ordinance extinguishes two statutory obligations. Conceptually, under the RBI Act, there is an exclusive power to issue notes vested in the RBI. The other aspect is honouring the currency. This comes from two obligations. #SupremeCourtofIndia #Demonetisation

Divan: Legal obligations imposed on GoI & RBI. First, currency is guaranteed by central govt. Second, there is an independent obligation - liability of the issuance dept of RBI. These obligations were sought to be extinguished by ordinance. #SupremeCourtofIndia #Demonetisation

Divan takes the court through the Specified Bank Notes (Cessation of Liabilities) Ordinance and the act that later replaced the ordinance in 2017. "So, there is an overarching power for a grace period." #SupremeCourtofIndia #Demonetisation

Divan, referring to a notif: Grace period is being extended. But, because of the conditions imposed by the proviso which says FEMA requirement cannot be exceeded, I am excluded from the ambit of the notification. #SupremeCourtofIndia #Demonetisation

Divan: The notification defines a grace period. But the proviso takes people like me who had left money in India, completely out of the purview of any benefit of the grace period they define. #SupremeCourtofIndia #Demonetisation

Divan referring to a notification dt Dec 31, 2016 wrt the facility for the exchange of demonetised notes during the grace period. "I am an NRI for this FY. This changes depending on how many days I have spent in the country in a given yr." #SupremeCourtofIndia #Demonetisation

Divan: This notif does not contemplate a situation like mine where someone leaves money in the country and goes abroad. BVN J: Then this notif does not apply to you. Which notif does? Divan: There is none. No grace period for me. #SupremeCourtofIndia #Demonetisation

Divan: My first submission is that my client cannot be deprived of his property arbitrarily. And second and a milder submission is to request that the govt extend the grace period to situations like mine under S 4 of the 2017 Act. #SupremeCourtofIndia #Demonetisation

Gavai J: If power u/ss 4(2) and (3) is not exercised by the RBI or the Board in a reasonable manner, not taking into factor relevant factors, in individual cases, we can hold that they ought to have. Divan: Exactly, how can they resist! #SupremeCourtofIndia #Demonetisation

Divan: This court may intervene in individual cases, but given the vastness of our country and the circumstances, the RBI needs to take a broader approach. They should have a general circular for circumstances like this. #SupremeCourtofIndia #Demonetisation

Nazeer J: Suppose you have gone abroad. Taking advantage of the situation, someone may want to park their black money w you. Divan: There is a presumption of integrity on the average citizen. Not everyone is a money-launderer. #SupremeCourtofIndia #Demonetisation

Gavai J: Prime facie we find that s 4(2) is independent of s 4(1). Genuine cases may be independently considered by the RBI. AG: Whatever examination RBI does should be on a fair basis. #SupremeCourtofIndia #Demonetisation

Gavai J: If RBI is satisfied that it was beyond a person's control, then he must be given relief. S 4(2) and 4(3) bestows upon RBI the discretion. Also, a responsibility to investigate the genuineness of the claim. #SupremeCourtofIndia #Demonetisation

Divan refers to Jayantilal Ratanchand Shah v. Reserve Bank of India [(1996) 9 SCC 650] which upheld the constitutional validity of the High Denomination Bank Notes (Demonetization) Act, 1978. Read the judgement here: indiankanoon.org/doc/116379852/ #SupremeCourtofIndia #Demonetisation

Divan: In this case, the Constitution Bench first declared the law, and then disposed of individual cases. That is the general scheme. #SupremeCourtofIndia #Demonetisation

Divan: Employment in the two months following demonetisation was 12 million lower than it was in the two months preceding demonetisation. Demonetisation led to the loss of 3 million jobs. #SupremeCourtofIndia #Demonetisation

Divan: This is not a critique of the policy. This is only to come back to the court and indicate that if such power is left untrammelled and unguided, it can lead to massive and unmitigated consequences for the lives of the citizens. #SupremeCourtofIndia #Demonetisation

Nazeer J: What guidance should the courts give? Divan: At a minimum, when you are taking away, for instance, 86% of currency, there ought to be a meaningful study. There cannot be a general study about black money, terrorism and what not. #SupremeCourtofIndia #Demonetisation

Gavai J: What if a study is conducted and released two months prior? (alluding to necessity of secrecy) Divan: But was there anything at all? If RBI does not apply its mind, there will be a great degree of peril for all of us. #SupremeCourtofIndia #Demonetisation

BVN J: Did RBI inform the central govt that 86.64% of the total currency in circulation would be withdrawn? Divan: They are being quite coy w this info. Whether it was available is not known. #SupremeCourtofIndia #Demonetisation

Divan: First submission is on A 300A. One, there can be no deprivation except u/ the authority of law. In smaller combinations, this court has held that property is a human right. Gavai J: There is no disagreement on that. #SupremeCourtofIndia #Demonetisation

Divan: Second, the law must pass the muster of A 14...the classical equality test. You cannot discriminate b/w people who are similarly placed. Everyone who is outside India during this period is a part of a homogenous class. #SupremeCourtofIndia #Demonetisation

Gavai J: If we say that u/ss 4(2) and 4(3), RBI has the power and responsibility to adequately deal with individual, genuine claims, then the ques of A 14 may not arise at all. #SupremeCourtofIndia #Demonetisation

Divan: If I receive substantial relief, then this issue which I am raising may in a sense, not arise. But it is imp to recognise this issue, because it elevates the bounden duty of the RBI and the central govt. #SupremeCourtofIndia #Demonetisation

Divan: There is an artificial line being drawn on Dec 30/31 of 2016. I am in the same class as the Indian citizens who are abroad in that period, there is no reason for me to be discriminated against. #SupremeCourtofIndia #Demonetisation

Divan: There is no reasonable nexus between this classification and dealing w trafficking, terrorism, fake currency, black money. What is the connection b/w my hard-earned money and any of these objects? #SupremeCourtofIndia #Demonetisation

Divan: Another point is that of manifest arbitrariness which is founded on the representations made to the country at large by even the Prime Minister, himself. #SupremeCourtofIndia #Demonetisation

Divan: In the Aadhar case, the #SupremeCourt held that it would not be sufficient to have a ritualistic incantation of black money. This is my final submission wrt A 14 and the doctrine of proportionality. There must be a recourse for me. #SupremeCourtofIndia #Demonetisation

Divan: I have gone abroad to visit my son. You ought not to have a situation where PM makes a statement and I have to rush back. Dignity is something I carry along w me. It is a portable, travelling right. This impacted est rights. #SupremeCourtofIndia #Demonetisation

Divan: When I left the country, I thought my 1.6 lakh rupees was safe under lock and key. Gavai J, on a lighter note: Rather than having the threat of theft, in the ordinary course, one would put the money in a bank. #SupremeCourtofIndia #Demonetisation

Divan: Mr Chidambaram has made extensive submissions wrt S 26(2). If it is a recommendation, at least the basic elements ought to be told to this court. One of them is the quantum. Did the Central Board know? Were impact studies conducted? #SupremeCourtofIndia #Demonetisation

Divan: Expression 'recommendation' takes into it, info being received by the party recommending, deliberations at the highest level, and thereafter, some kind of an application of mind. #SupremeCourtofIndia #Demonetisation

Divan: I do not think the requirements of S 26(2) have not been met. That is my final submission. #SupremeCourtofIndia #Demonetisation

Bench rises. To reconvene after lunch. #SupremeCourtofIndia #Demonetisation

Bench reassembles. Advocate Prashant Bhushan is appearing for an intervenor. "Money belonged to petitioner's husband, who died in Apr, 2016. She discovered cash kept by husband in Jan, 2017. Wrote to PM requesting an exception." #SupremeCourtofIndia #Demonetisation

Bhushan: There would be many such people who cannot come to this court. PM's speech said Mar 31. This sudden extinguishing of the window, or even fixing of such an arbitrary deadline which prevents genuine people to get their money, is wrong. #SupremeCourtofIndia #Demonetisation

On behalf of one of the petitioners challenging demonetisation, it is submitted that Rs 21 lakhs has been lying in the court for a long time. "Justice delayed and currency denied!" (Everyone laughs) #SupremeCourtofIndia #Demonetisation #CourtroomExchange

Attorney-General R Venkataramani begins his submissions. "RBI has received more than 700 applications to be considered under S 4(2). Many of them are being considered. But, the govt is clear that we don't want to open a second window." #SupremeCourtofIndia #Demonetisation

AG: We cannot say that a series of exceptions wrt extensions should be granted. That will introduce uncertainties. Gavai J: But, there is a power & duty u/s 4(2). If you refuse to deal w genuine cases, that is arbitrary. #SupremeCourtofIndia #Demonetisation

AG: There is an exchange provision u/ the Act. Therefore, not acquisition of property. Next ques is when do you draw a line beyond which the notes cannot be exchanged. That consideration will not fall for judicial review unless mala fide. #SupremeCourtofIndia #Demonetisation

AG: This court has held that there may be a rule into which exceptions are read in genuine cases. Gavai J: That is what we are saying. We are not asking you to extend the date u/S 4(1). #SupremeCourtofIndia #Demonetisation

AG: As the govt of India, I cannot say we will allow all the applications. We will consider each application case-by-case, and allow them if satisfied as to their genuineness. #SupremeCourtofIndia #Demonetisation

BVN J: But you have exercised your power u/s 4(1)(ii) beyond Dec 2016 and even Mar 2017 for a class of persons...For cooperative societies in Jun 2017. AG: That's right. #SupremeCourtofIndia #Demonetisation

AG: First, demonetisation is not a standalone policy and should not be reduced to one. Second, if we look at the evolution of the role of the central bank worldwide, we cannot define it in a limited manner. #SupremeCourtofIndia #Demonetisation

AG reads out from a written note defending the demonetisation policy and challenging whether the court can subject it to judicial review. Says, "The court cannot unscramble a scrambled egg." #SupremeCourtofIndia #Demonetisation

AG reads out, "It can hardly be canvassed that demonetisation has failed. Therefore, the scope for scrutinising this measure can hardly exist." #SupremeCourtofIndia #Demonetisation

AG: All the data wrt the currency in circulation, etc will be of broad guidance. I imagine the court will not take a microscope. #SupremeCourtofIndia #Demonetisation

AG: Fake currencies and black money are such enemies that cannot be easily identified. They wear masks all the time. That it is being extricated is important, the quantum may not be as important. #SupremeCourtofIndia #Demonetisation

Bopanna J: You are arguing that the objectives set out have been achieved. But, we want you to meet the allegation that the process followed was flawed, and wrt the scope of S 26(2). AG: I will. We are not skirting that issue. #SupremeCourtofIndia #Demonetisation

AG: If you want to introduce pedestrian considerations such as whether there was a recommendation or a consultation, you will reduce S 26(2) to a narrow area, stultifying the entire complexity of management of currency monetary policy. #SupremeCourtofIndia #Demonetisation

AG points out various statistics to demonstrate the direct and indirect benefits of demonetisation. "This is the broad picture I wanted Your Lordships to have. With that in mind, we can now look at the scheme of the RBI Act." #SupremeCourtofIndia #Demonetisation

AG: Demonetisation was not an isolated economic policy. This was a complex monetary policy. Entirely different considerations will follow. The degree of deference must also be higher. #SupremeCourtofIndia #Demonetisation

AG, referring to the Preamble of the RBI Act: The role of the RBI has evolved. We are not looking at some black money here and there, some fake currency here and there. We are trying to look at the big picture. #SupremeCourtofIndia #Demonetisation

AG: Also, no well-meaning person will say that just because you have failed, your intention was also flawed. This does not make logical sense. #SupremeCourtofIndia #Demonetisation

Gavai J: There is no dispute w the contention that RBI has a primary rule in dictating monetary policy. AG: They have argued that RBI must apply its mind independently...The working of RBI and the govt must be seen from a flexible POV. #SupremeCourtofIndia #Demonetisation

AG: RBI and central govt has a symbiotic relationship. BVN J: The legislation recognises the expertise of the Central Board of RBI. The legislation requires application of mind by RBI. #SupremeCourtofIndia #Demonetisation

AG takes the court through various provisions of the RBI Act, 1934, with a special focus on S 26(2). "My submission is that the focus of this provision is not on 'series', but on 'denomination'." #SupremeCourtofIndia #Demonetisation

AG: In order to ensure there is a guarantee of comfort, I am looking at one denomination, I must bring within it all series. Therefore, it must be construed not w reference to series but w denomination. Otherwise, there will be uncertainties. #SupremeCourtofIndia #Demonetisation

BVN J: If you want to demonetise all 1 rupee currency, your argument may be accepted. But not for all Rs 500 notes. AG: Which denomination shall be chosen is a matter of policy consideration. #SupremeCourtofIndia #Demonetisation

AG: Very loudly it has been suggested that we must have specific survey, data, this and that. We are talking about the nation's economy. Fake currency, black money...these can derail the economy. Govt wa looking at the larger picture. #SupremeCourtofIndia #Demonetisation

Nazeer J: The pointed ques is whether 'any series of banknotes' includes 'all series of banknotes'. AG: That 'any' includes 'all' will necessarily flow. It must have common meaning. #SupremeCourtofIndia #Demonetisation

BVN J: Word used twice. So can you demonetise all notes of all series of all denominations? AG: The context is important. It has to be given a flexible meaning. This is a very dynamic provision. A narrow meaning should not be given. #SupremeCourtofIndia #Demonetisation

Nazeer J: So, you are saying, the choice is yours. AG: Choice is ours. Persuasion, compulsion and felt need will guide the govt. The court cannot sit in judgement over this. Every day in a national economy is a matter of trial & error. #SupremeCourtofIndia #Demonetisation

Nazeer J: Another ques is, why was no specific act enacted before 2016 demonetisation unlike in 1946 and 1978? AG: I will answer that. #SupremeCourtofIndia #Demonetisation

Nazeer J: What was the jurisdiction of the 1946 Act, since it was enacted under Govt of India Act when the field was already occupied by S 26(2)? AG: Statutory occupation does not oust the power of plenary legislation. #SupremeCourtofIndia #Demonetisation

Nazeer J: Next week, there is no sitting of this Bench. We will take this up again next Monday, which is, December 5. #SupremeCourtofIndia #Demonetisation

Nazeer J: We need to finish this early. Otherwise, the Bench will be demonetised. (laughs) Bench rises. #SupremeCourtofIndia #Demonetisation