The Bombay High court recently directed the Reserve Bank of India (RBI) to accept old Demonetised bank notes from a group of people, whose currency notes had been seized by the Income Tax department during a raid soon after the Demonetisation policy was announced.
The Bombay high court recently directed the Reserve Bank of India (RBI) to accept old demonetised bank notes from a group of people, whose currency notes had been seized by the Income Tax department during a raid soon after the demonetisation policy was announced. The confiscated amount was returned to the petitioners after the deadline to deposit the invalidated notes had passed.
The group from Kolhapur had an amount of ₹20 lakh with them. After the demonetisation policy was adopted by the government in November 2016 and the announcement to deposit ₹500 and ₹1000 notes in bank accounts before December 31, 2016, was made, the group members decided to deposit the amount in their joint account. But a raid by the income tax department on December 26 resulted in the seizure of the amount.
After the investigation was completed, the assistant director of income tax issued
a letter to the police on January 10, 2017, stating that the department decided not to keep the cash and the ingots. The money was returned to the petitioners on January 17, 2017, after which they visited the RBI office to deposit it. However, RBI refused since the deadline was missed. The group then approached the Bombay high court through advocate Udaya Sankar Samudrala, who submitted that the petitioners could not be blamed for not meeting the deadline as the money was seized from them.
Citing the Specified Bank Notes (Cessation of Liabilities) Act, 2017, and the
notification of May 2017 issued by the ministry of finance, senior advocate Venkatesh Dhond, representing the RBI, contended that the petitioners were required to furnish the serial numbers of the specified bank notes. “In the absence of indication of such serial numbers, the Reserve Bank of India was precluded from accepting the specified bank notes and thereafter exchanging them for legal tender,” he stated.
The petitioners’ advocate argued that it was the duty of the tax and police officers to specifically note down the numbers of the bank notes. “The same was however not done; thus, resulting in difficulties in receiving an amount equivalent to the same,” he said.
On February 27, a division bench of justice A.S. Chandurkar and M.M. Sathaye ruled in favour of the petitioners, upholding that they were not at fault. “We do not find any reason to deny the petitioners the benefit of receiving the value of the specified bank notes,” the bench said. It acknowledged that the specified bank notes were not in possession of the petitioners at the time of the deadline and, therefore, they should be permitted to deposit the notes for the value of ₹20 lakh now.
The bench further directed the petitioners to deposit the amount with RBI within one week and ordered the apex bank to verify the notes and hand over the exchange amount to them.
