The Supreme Court today directed the government to spell out by December 14 a minimum weekly withdrawal limit that banks cannot deny to customers, after the Centre said the previously announced Rs 24,000-a-week limit was a “ceiling, not a minimum”.
Many banks have been refusing this amount citing a cash crunch and forcing customers to settle for sums ranging anywhere between Rs 3,000 and Rs 10,000, senior counsel and Congress politicians Kapil Sibal and P. Chidambaram had earlier told the court.
While clarifying on the matter, attorney-general Mukul Rohatgi said the government had no intention of replacing the entire volume of the old notes in new currency: it would leave a gap of Rs 1.5 lakh crore to promote cashless transactions.
The bench of Chief Justice T.S. Thakur and Justices A.M. Khanwilkar and D.Y. Chandrachud was hearing a batch of 32 petitions and applications from individuals, groups and political parties complaining about the hardship caused by demonetisation.
At the next hearing on December 14, the court will sift through them and frame the questions it needs to answer, including one on the constitutional validity of the demonetisation and the curbs on cash withdrawals.
Justice Thakur indicated that if necessary, the court might refer the matter to a five-judge Constitution Bench.
“We assume you (the government) are capable (of replacing the withdrawn currency). Your estimate shows you are in a position (to do so) but what has happened?” Justice Thakur asked.
Rohatgi said the government needed time till December 31.
“Are you agreeable that if there is a (lower) limit imposed by us, then no bank will deny withdrawal of the money? We will make sure that Rs 24,000 is withdrawn by each person?” the Chief Justice said.
Rohatgi clarified: “The Rs 24,000 limit is a ceiling, not a minimum limit.”
The bench then said: “If he (customer) has a legitimate right, then let there be a limit below which banks cannot deny.”
Rohatgi said the government would then have to rework the limit. “If not Rs 24,000, let it be Rs 10,000, but it must be given,” the Chief Justice said.
The court quizzed the government on the speed of currency replenishment. “How much money is being printed? How much is being infused?” it asked.
Rohatgi said the government had so far collected between Rs 11.5 lakh crore and Rs 12 lakh crore in old currency, having initially expected about Rs 10-11 lakh crore. “It (the government) may get another Rs 1 lakh crore.”
Justice Thakur said the court was conscious of the “larger objective” of the demonetisation but asked whether the government had “properly applied (its) mind” while undertaking the drive.
“Was there any material before you that were apprised? How much money will be lost? How we will meet the situation? Was there a plan (about what the) banks should have to take care of when a situation like this arises?” he asked.
“It is one thing to completely stop (the use of old notes) and another thing to intelligently regulate.”
Rohatgi acknowledged “some amount of inconvenience” to the people but cited the incentives for digital transactions that the government had announced yesterday by offering concessions at petrol stations and in insurance payments, among other things.