India
Company says Axis Bank refused to accept demonetised notes, Supreme Court issues notice – Times of India
NEW DELHI: A year and a half after the Union government’s November 8, 2016 decision to demonetise Rs 1,000 and Rs 500 currency notes was upheld, SC has considered a proposal petition by a company that complained that Axis Bank had refused to accept demonetised bonds worth Rs 3.2 crore, in violation of RBI Guidelines.
Advocate Nalin Kohli, appearing for the company, argued before a bench comprising Justices BR Gavai and KV Viswanathan that the company did not challenge the decision to demonetise certain currency notes but felt aggrieved by the bank’s arbitrary decision not to accept the deposit of Rs 3.2 crore, in violation of the RBI’s orders regarding demonetisation and despite the fact that the company KYC compliant.
RBI, through senior advocate Jaideep Gupta, said it was for Axis Bank to explain its refusal to accept the demonetised notes in December 2016. The notification dated November 8, 2016, allowed deposit of demonetised notes in banks till December 30, 2016. Another notification issued on December 31, 2016, made it an offence to retain demonetised notes after December 30 and made the holder liable to a penalty
Kohli said that the bank was not only required to receive demonetised notes presented to it by the KYC-compliant company, but it was also obligatory on RBI to ensure that the company received the amount in exchange for valid notes as each demonetised note contained a written undertaking by the RBI Governor to pay the holder an amount mentioned on the note. The court issued a fresh notice to Axis Bank asking it to file its response within three weeks after RBI’s counsel said that the court should hear the bank and ascertain whether there was any valid reason for not accepting the demonetised notes. A bench comprising Justices S Abdul Nazeer, Gavai, AS Bopanna, V Ramasubramanian and BV Nagarathna had on January 2, 2023, by a majority of four to one, upheld the demonetisation order of November 8, 2016, implemented through an ordinance. Justice Nagarathna disagreed.
Advocate Nalin Kohli, appearing for the company, argued before a bench comprising Justices BR Gavai and KV Viswanathan that the company did not challenge the decision to demonetise certain currency notes but felt aggrieved by the bank’s arbitrary decision not to accept the deposit of Rs 3.2 crore, in violation of the RBI’s orders regarding demonetisation and despite the fact that the company KYC compliant.
RBI, through senior advocate Jaideep Gupta, said it was for Axis Bank to explain its refusal to accept the demonetised notes in December 2016. The notification dated November 8, 2016, allowed deposit of demonetised notes in banks till December 30, 2016. Another notification issued on December 31, 2016, made it an offence to retain demonetised notes after December 30 and made the holder liable to a penalty
Kohli said that the bank was not only required to receive demonetised notes presented to it by the KYC-compliant company, but it was also obligatory on RBI to ensure that the company received the amount in exchange for valid notes as each demonetised note contained a written undertaking by the RBI Governor to pay the holder an amount mentioned on the note. The court issued a fresh notice to Axis Bank asking it to file its response within three weeks after RBI’s counsel said that the court should hear the bank and ascertain whether there was any valid reason for not accepting the demonetised notes. A bench comprising Justices S Abdul Nazeer, Gavai, AS Bopanna, V Ramasubramanian and BV Nagarathna had on January 2, 2023, by a majority of four to one, upheld the demonetisation order of November 8, 2016, implemented through an ordinance. Justice Nagarathna disagreed.
