New Delhi, Nov 12: Prime Minister Narendra Modi on Tuesday announced that the Rs 500 and 1,000 notes shall cease to be legal tender from November 9 2016 onwards. A day after this announcement there were at least three petitions filed in the Supreme Court and High Courts challenging the validity of this ban.
The Supreme Court is likely to take up the matter on November 15 for hearing. The Karnataka High Court which dealt with a similar petition rejected the same.
When the SC takes up the matter it would have to hear the central government before passing any interim order since a caveat has been filed. The question now is under what provisions was this ban on currency imposed.
Provisions under which Rs 500, 1,000 were declared invalid:
- The Government of India in the Ministry of Finance, vide F. No. 10/3/2016-Cy.I dated 8th November, 2016 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 8th November, 2016, the Central Government declared that the bank notes of existing series of denomination of the value of five hundred rupees and one thousand rupees (hereinafter referred to as the specified bank notes), shall cease to be legal tender on and from the 9th November, 2016.
- The notes were declared invalid under sub-section (2) of section 26 of the Reserve Bank of India Act, 1934 (2 of 1934).
- Sub Section 26 subject to the provisions of sub-section (2) states that every bank note shall be legal tender at any place in 1[India] in payment, or on account for the amount expressed therein, and shall be guaranteed by the
- Further it stats that on the recommendation of the Central Board the Central Government may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender.