Editorial: Note ban verdict an exercise in futility

Editorial: Note ban verdict an exercise in futility

FPJ EditorialUpdated: Tuesday, January 03, 2023, 10:47 PM IST
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The beauty of the Supreme Court verdict on the demonetisation of Rs500 and Rs1,000 currency notes is that it can be interpreted variously. The spokespeople of the Government, especially from the ruling party, are excited about the 4:1 verdict delivered by a Constitution bench headed by Justice Syed Abdul Nazeer, as it upheld the Government’s November 2016 demonetisation decision. Those who feel perturbed by the majority verdict can clutch at the dissenting judgment by Justice BV Nagarathna to drive the Government to a corner. The fact of the matter is that the whole exercise was a waste of the court’s time with no lesson to be learnt. In disposing of 58 petitions, what the court looked at was whether the Government was competent to demonetise the high-value currency notes based solely on a certain section of the RBI Act, 1934.

The court did not go into the merits of whether the Government achieved the objectives it set for itself when Prime Minister Narendra Modi addressed the nation and declared his intention to make the notes redundant from the midnight of Nov 8, 2016. That neither Mr Modi nor his party claimed credit for demonetisation in subsequent elections itself proves the decision was a Himalayan blunder, as it caused untold hardship to tens of millions of people, many of whom lost their jobs. The Government had to admit that the GDP contracted by as much as 1% because of demonetisation, though independent experts estimated the figure to be closer to 2%. Even six years after demonetisation, the economy cannot be said to have regained whatever it had lost. In other words, the economy continues to suffer its aftereffects.

There is clear evidence that demonetisation failed to unearth black money as 99% of the banned currency notes returned to the RBI. There is now a larger amount of currency in circulation, though online transactions worth Rs12 lakh crore were carried out in October alone. Demonetisation had little to do with the fight against terrorism, which continues to raise its ugly head, be it in Kashmir or elsewhere. Of course, all this was of no concern to the Supreme Court, which only looked into the competence of the Government to take such extraordinary actions. Seen against this background, the judgment has only academic value. By accepting the petitions, the court only underlined the fact that it has the competence to go into such decisions which have far-reaching consequences for the country.

There are any number of decisions taken by the Government which the court can review. Like, for instance, the decision to buy 36 Rafale multirole fighter aircraft from France. They are now part of the Indian Air Force. Fortunately, the court did not deem it fit to look into the matter, which is best left to political parties to sort out in the public domain. The Government takes many decisions which involve billions of rupees. Every such decision cannot be subjected to judicial scrutiny as there are institutional agencies like the parliamentary committees, the Comptroller and Auditor General and the Lok Pal to look into them. It was obvious that the court’s verdict on demonetisation would not bring back to life about 100 people who died standing in queues in front of ATMs.

In fact, there is a clear division of responsibilities among the executive, the legislature and the judiciary. Unlike the two other pillars of state, the judiciary alone has the power to review decisions of the executive and the legislature, but that is only in extraordinary situations. Also, time is of the essence in judicial decisions. There were decisions like the enactment of the amended citizenship law and the vivisection of the state of Jammu & Kashmir that could be described as being against the basic structure of the Constitution. The court was duty bound to hear the petitions challenging such decisions, but it preferred to put them on hold. To reconsider them after many years is like having a relook at decisions taken by successive governments in the past. The time of the court or the Government should be judiciously used and not frittered away in academic and cerebral pursuits.

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