Delivering the majority opinion, Justice Gavai stated,
“It has been held that there has to be great deal of restraint before interfering in matters of economic significance…we cannot supplant such views with the judicial one.”
He went on to hold,
“There was consultation between the Centre and the RBI for a period of 6 months. We hold that there was a reasonable nexus to bring such a measure, and we hold that demonetisation was not hit by doctrine of proportionality.”
Finally, Justice Gavai concluded that the RBI has no independent power to bring in demonetisation.
“Thus, power available to the Centre cannot be mean that it is in relation to only specific series of bank notes. It is for all series of bank notes…There is no excessive delegation as under Section 26(2) of RBI Act and thus cannot be struck down. Notification is valid and satisfies the test of proportionality. period for exchange of notes cannot be said to be unreasonable.”
Source: Barandbench
