Bombay High Court Advises Courts to Refrain from Delving into RBI’s Monetary Framework
Dismisses a petition alleging wrongdoing by officials during the 2016 demonetization policy
The Bombay High Court has stated that the Reserve Bank of India (RBI) plays an important role in shaping the country's economy and Courts should refrain from delving into the monetary regulatory framework.
A division bench of Justice A S Gadkari and Justice Sharmila Deshmukh dismissed the petition filed by an individual Manoranjan Roy. The man, claiming to be a tax volunteer, sought an independent investigation to inquire into the alleged wrongful activity and action by certain RBI officials during the demonetization of Rs.500 and Rs.1,000 currency notes in 2016.
The bench noted that the petition was nothing but a fishing inquiry into what the petitioner perceived to be a scam based on half-baked information on various figures set out in the annual reports as well as the information given under the Right To Information (RTI).
While stating that demonetization notification was a ‘policy decision’, the Court held, “The act of RBI in issuing the legal tender is a statutory function backed by expert committees. It cannot be called in question on frivolous grounds.”
Terming the petition trite, the Judges ruled, “It cannot be disputed that RBI plays an important role in shaping the economy of our country and the Courts should refrain from delving into the monetary regulatory framework unless it is shown to the satisfaction of the Court that there is a need for an investigation by an independent agency.”
The Court held that it could not rely on "half-baked information" and direct an investigation into the statutory functioning of an institution. It said the allegations leveled by the petitioner did not demonstrate the commission of the offense. Since 2016, the petitioner has been persistently seeking an investigation into the functioning of the RBI alleging illegalities. However, he did not support his claims with cogent material and reports from independent financial experts.
In his plea, Roy alleged that certain RBI officials did not follow proper procedure and helped certain beneficiaries to exchange their unaccounted old currency notes during demonetization. He relied on the RBI's annual report submitted between 2016 and 2018 and claimed that the legal tender of the Rs.1,000 and Rs.500 notes in circulation was less than the figure received after demonetization. He sought an inquiry for the offenses of criminal conspiracy, breach of trust, and cheating.
However, the Judges observed, “Considering the prominence that the RBI commands in the economic structure, its annual reports, which are put in the public domain by the experts, cannot be questioned as being irregular or illegal without any demonstrable criminality.”
The bench added, “The petitioner has collated the information from the annual reports of RBI and information received under RTI and has come with a case that the numerical figures therein reveal discrepancy.”
While dismissing the plea, the Court said it was inclined to impose an exemplary cost on the petitioner but was requested by his advocate from doing so.