Demonetisation issue will have to be referred to 7-judge bench to succeed

Demonetisation issue will have to be referred to 7-judge bench to succeed

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There are media reports that today (16 December 2016), the Supreme Court has referred the PILs on demonetisation issue to a Constitution bench of the court. The order referring these large number of PILs to a Constitution Bench was passed by a 3-judge bench comprising Chief Justice of India TS Thakur and Justices AM Khanwilkar and DY Chandrachud. The Supreme Court also passed order to transfer all the cases pending on demonetisation issue in various High Courts to itself and restrained all courts from entertaining any case relating to demonetisation.

I have already written on this issue last month (14 November) pointing out that a Constitution bench of the Supreme Court had rejected the challenge to demonetisation exercise of 1978 even though at that time the right to property was a fundamental right. [read: Demonetisation of high denomination notes in 1978 was upheld by Supreme Court.]

The said rights relating to property were fundamental rights enshrined in Articles 19(1)(f) and 31 of the Constitution. These provisions were repealed vide the Constitution (44th Amendment Act in 1978 (this, in fact, happened after the demonetisation of 1978, though in the same year).

So, now, when there is not even a fundamental right to property, it may not be possible to successfully challenge the present demonetisation exercise. I have explained in the above article the basic reasons as to why the challenge to the present demonetisation issue is not likely to succeed.

In any case, the Supreme Court will have to refer the issue to at least a 7-judge bench if the previous Constitution bench decision on this issue is to be overruled. So, initially, this issue may go before a 5-judge bench, but if the PIL petitioners are likely to succeed before that bench, in that case the 5-judge bench would not be able to overrule the previous 5-judge decision and it will have to ultimately refer the case to a 7-judge bench if the 5-judge bench does not want to abide by what was held by the previous 5-judge bench.

In my opinion, the chances of success for the PILs challenging the present demonetisation exercise ordered by Narendra Modi Government are very little. If nothing else, it may be noteworthy that such Constitution bench matters generally take a lot of time to decide. By that time, the present demonetisation exercise would already have become complete, the old currency notes would have already reached the banks, and these PILs would then become an academic exercise. And, the Supreme Court, generally, does not entertain academic questions (more so, since in the present matter, there is no interim direction against the present demonetisation, rendering it a fait accompli). So, other than giving some hollow satisfaction to the PIL petitioners (and some opposition leaders), the reference of the issue to the Constitution bench of the Supreme Court may not mean much.

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