The Supreme Court on Monday upheld the centre's 2016 decision to ban 86% of the country's cash in circulation.

According to reports, the case was heard by five-judge Constitution bench of the apex court of the country stating that the central government's November 8, 2016 order to ban Rs 1,000 and Rs 500 currency notes is valid and the decision-making process is not a wrong step just because the Centre initiated it.

Four of the five judges Justices S. Abdul Nazeer, B R Gavai, A S Bopanna and V. Ramasubramanian upheld the legality of the 2016 order by the Centre while Justice BV Nagarathna disagreed and gave a separate judgement.

According to the ruling, demonetisation cannot be deemed unconstitutional simply because certain persons have experienced hardships or because the decision was taken hastily.

“No doubt that on account of demonetisation, the citizens were faced with various hardships…,” the bench said in its judgement.

“The contention that the impugned notification is liable to be set aside on the ground that it caused hardship to individual/citizens will hold no water. The individual interests must yield to the larger public interest sought to be achieved by impugned Notification,” it added.

“If the impugned Notification had a nexus with the objectives to be achieved, then, merely because some citizens have suffered through hardships would not be a ground to hold the impugned Notification to be bad in law,” it further said.

According to the verdict, the power under Section 26(2) of the RBI Act empowers the Centre to demonetise whole series of bank notes and not any particular series.

“The power available to the Central Government under sub-section (2) of Section 26 of the RBI Act cannot be restricted to mean that it can be exercised only for ‘one’ or ‘some’ series of banknotes and not for ‘all’ series of bank notes. The power can be exercised for all series of bank notes. Merely because on two earlier occasions, the demonetisation exercise was by plenary legislation, it cannot be held that such a power would not be available to the Central Government under sub-section (2) of Section 26 of the RBI Act,” the bench said.

Justice BV Nagarathna disagreed with the majority judgment on the point of the Centre’s powers under section 26(2) of the RBI Act and said the scrapping of the Rs 500 and Rs 1,000 series notes had to be done through legislation and not by notification.

Regarding the Centre's authority under section 26(2) of the RBI Act, Justice BV Nagarathna disagreed with the majority verdict and argued that legislation, not a notification, was required in order to abolish the Rs. 500 and Rs. 1,000 series notes.

According to Justice Nagarathna, corruption and activities like stockpiling black money are "eating into the vitals" of our society and economy, so any steps taken to combat them must be applauded.

A group of 58 petitions contesting the demonetisation programme launched by the Center in 2016 were the subject of the apex court's ruling.

According to the petitions, the demonetisation did not follow the needed due process, and the arbitrary decision infringed therights of Indian citizens. 

(ANI)