Justice BV Nagarathna criticized the execution of demonetization at the Courts and the Constitution Conference, highlighting the lack of proper decision-making processes and the negligible impact on eradicating black money, as 98% of demonetized currency returned to the RBI.
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Hyderabad: Recently, A Speech delivered at the Courts and the Constitution Conference organized by NALSAR University of Law, Supreme Court judge Justice BV Nagarathna criticized the execution of demonetization, stating that the manner in which it was carried out was incorrect. Justice Nagarathna emphasized the lack of proper decision-making processes in accordance with the law, suggesting a lack of preparedness and communication surrounding the demonetization decision.
“The decision to demonetize was made one evening and put into effect the next day. If the goal was just to switch from paper to plastic currency, demonetization might not have been the only reason for it, in my view.”
-Justice Nagarathna stated.
She further highlighted the significant impact of demonetization on the economy, noting that at the time of the decision, 86% of the currency in circulation consisted of 500 and 1,000 rupee notes.
The Union government’s decision to demonetize such a substantial portion of the currency seemed to overlook this fact. Moreover, Justice Nagarathna pointed out that 98% of the demonetized currency eventually returned to the Reserve Bank of India (RBI), raising questions about the effectiveness of demonetization in eradicating black money, its primary objective.
“Some argue that demonetization helped convert black money into white money. However, the subsequent income tax proceedings remain unclear.”
– Justice Nagarathna argued.
In addition to her remarks on demonetization, Justice Nagarathna emphasized the importance of governors adhering to their constitutional duties. She expressed concern over recent litigation involving governors’ refusal to assent to bills sent for approval by state governments.
The speech also addressed the Supreme Court’s differing stances on reproductive rights, especially regarding cases involving medical termination of pregnancy. Justice Nagarathna recognized the intricate nature of decisions regarding abortion rights and emphasized the importance of thoughtful deliberation in such cases.
Justice Bhat, another Supreme Court judge, referred to the court’s willingness to revisit established norms in various judgments, including those on electoral bonds and the appointment of election commissioners. He emphasized the court’s commitment to ensuring the Constitution remains relevant in the 21st century.
Returning to the topic of demonetization, Justice Nagarathna expressed her dissenting opinion in the demonetization case, stating that she believed it was a way of converting black money into white money. She cited the common man’s predicament during the demonetization period as a motivating factor behind her dissent.
“Ninety-eight percent of the currency returned to the RBI, so how were we progressing towards eradicating black money, which was the purported aim of demonetization? It seemed more like a method of turning black money into white. What transpired with income tax proceedings afterward remains unclear. Consequently, the plight of the common man deeply moved me, leading to my dissent.”
– she explained.
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Furthermore, Justice Nagarathna highlighted the disproportionate impact of demonetization on the common people, particularly those who relied heavily on 500 and 1,000 rupee notes for their daily transactions.
“Eighty-six percent of the currency consisted of Rs 500 and Rs 1,000 notes, which I believe the central government overlooked when demonetizing. Picture a laborer who had to exchange his notes before buying daily essentials from the grocery shop after a day’s work.”
-she emphasized.
Justice Nagarathna criticized the RBI for not independently considering the cancellation of Rs 500 and Rs 1,000 currency notes, highlighting flaws in demonetization’s execution.
