The Supreme Court warned on Friday that people standing in long queues for hours every day for scarce cash could turn riotous, as it asked the Centre to take urgent measures to end their ordeal.
“It is a serious issue. This affects the entire population. You (the government) cannot deny there is a serious problem. There could be riots,” a bench of Chief Justice TS Thakur and Justice AR Dave said, drawing a sharp retort from attorney general Mukul Rohatgi.
The bench also declined the Centre’s plea to restrain all other courts and high courts from entertaining petitions challenging demonetisation and criticised the decision to bring down the maximum amount that could be converted against the outlawed notes of Rs 500 and Rs 1,000 from Rs 4,500 to Rs 2,000.
The Centre argued that HCs taking up legal challenges would result in multiple litigations. The bench, however, said the pleas seeking the intervention of courts reflected the “distress”.
Rohatgi replied, “There is no riot. People have supported the government’s move to demonetise high value currency notes to flush out black money. There are political reasons that the issue is raised in this matter by the petitioners to fuel unrest.”
The bench also criticised the government for reducing the daily cash exchange limit to Rs 2,000, after the court had asked if the limit could be raised from Rs 4,500.
Senior advocate Kapil Sibal, appearing for the petitioners who have questioned the legality of demonetisation, seized upon the bench’s remark about riots to criticise the Centre. “The government just did not have the capacity to print new currency notes. They should have taken this into account and taken steps to avoid putting people into untold harassment,” he said.
“Daily labourers are not getting paid, tea garden workers are not getting their salaries, people in rural areas have to walk long distances to reach banks and ATMs only to be told that these have run out of cash. It is a serious situation. Transporters are suffering. Trucks are standing idle without cash. India is a cash-based economy and the government has hurt it badly by freezing cash circulation,” senior advocate Kapil Sibal said in the Supreme Court on Friday. He was appearing for petitioners who have questioned the legality of demonetisation.
Attorney general Mukul Rohatgi said demonetisation was not the issue up for hearing on Friday. “The Centre has moved an application seeking an omnibus order from the SC to restrain all other courts and high courts from entertaining any petition on demonetisation. Let the SC decide the issue and let there not be multiple proceedings across the country,” he said.
The bench refused. “The situation shows the kind of problem people are facing. They are distressed. So, let the petitions be filed. We cannot shut out people from going to courts to register their grievances. What can be done is transfer of all petitions to Delhi high court. But for that, the Centre has to file a transfer petition,” it said. The AG said he would soon file a petition seeking transfer of the cases to Delhi HC.
Before this, the bench told the AG, “During the hearing on Tuesday, we had requested you to examine whether daily cash exchange limit could be raised from Rs 4,500. But the government has reduced it to Rs 2,000 a day now. Why? Is there short supply of currency notes, even Rs 100 notes? We do not understand this. The government promised in court to give relief to people but reduced the cash exchange limit.”