SC upholds Centre's decision on demonetisation, says decision-making process not flawed

• The Supreme Court has upheld the Indian government's 2016 demonitisation decision.
• The judgement was given by a five-judge constitutional bench with a 4-1 majority.
• The bench ruled that the decision-making process could not have been flawed as there was consultation with the RBI.

By a majority verdict, the Supreme Court on Monday upheld the government's 2016 decision to demonetise the currency notes of Rs 1,000 and Rs 500 denominations. A five-judge Constitution bench of the apex court, headed by Justice S A Nazeer, said the Centre's decision-making process could not have been flawed as there was consultation between the Reserve Bank of India (RBI) and the Union government.

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 B V 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.

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