Demonetisation was 'unlawful' — what the dissenting Justice BV Nagarathna said

The Supreme Court on Monday announced its verdict to uphold the Indian government’s decision in 2016 to demonetise Rs 1,000 and Rs 500 currency notes and rejected 58 petitions against it.

Of the two separate judgements from the hearing, the one pronounced by Justice BV Nagarathna's opposed the move. She is the only one with a dissenting judgement while the majority was in favor of Justice Gavai who backed the demonetisation move, announced by the Centre on November 8, 2016.

According to Justice Nagarathna, the Constitution bench's junior-most judge, the Centre's 2016 demonetisation move was "unlawful" on legal grounds, not to imply that it wasn't well-intentioned or driven by objectives that aren't noble.

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However, by releasing Rs 2,000 notes, the Centre might not have achieved its objective of curbing black money and corruption in India.

"The act of demonetisation is vitiated," the justice added.

Calling the decision “an exercise of power, contrary to law," she said the currency ban could have been carried out through an act of Parliament, not by the government.

"In my view, the power of the central government being vast has to be exercised through a plenary legislation rather than by an executive act by issuance of notification. It is necessary that Parliament, which consists of the representatives of the people of the country, discusses the matter and thereafter, approves the matter," she said.

Justice Gavai's judgement also doesn't take into consideration the fact that only the Central Board of the Reserve Bank of India can recommend demonetisation, Justice Nagarathna said.

"When the proposal for demonetisation comes from Centre, it has to come by way of legislation or at least ordinance. Without Parliament, democracy cannot survive," she said.

The justice claims that there was no application of mind by the Reserve Bank of India and that the decision was made within 24 hours, allowing them no time to apply their mind.

She added, "Serious ramifications of the move required for the issue to be laid before RBI for consideration."

She also questioned whether the RBI had properly considered the social economic hardships of demonetisation.

"Parliament, which is the centre of democracy, cannot be left aloof in a matter of such critical importance," she said.