A former Indian federal minister has described the demonetization of certain bank notes by the ruling Narendra Modi government as illegal and said the policy has caused gross violation of the citizen's legal rights.
Manish Tewari, former Indian minister of information and broadcasting and national spokesman of the Congress Party, who was in Riyadh as a guest of the Aligarh Muslim University Alumni Association (AMUAA) for the Sir Syed Day celebration, told Arab News on Saturday: "Demonetization is per se illegal. And the reason for that is we exercised demonetization twice before, one in 1946 and the other in 1978. The first and the second demonetization exercises were implemented by ordinances and followed by a legislation process to be validated by parliament act."
He said: "In fact, section 26 (A) of the Reserve Bank of India (RBI) act 1934 validates the demonetization done in 1946 and 1978. So, the fact that the Modi government decided to do it through executive action is per se illegal."
Moreover, the RBI Act section 24 (1) specifies the denomination, which can be a valid legal tender or which can be a valid currency; the 2,000 rupee note does not find mention in the slabs of denomination which have been indicated, therefore, without amending section 24 (1) and providing for the 2,000 rupee note to be a legal tender, floating it into the market is also illegal.
He underlined that without declaring financial emergency under article 360 of the Indian constitution, arbitrary limits on withdrawal of money cannot be imposed and, therefore, the manner in which the entire banking system has been subverted in the rural cooperative banks raises questions; they were not allowed for a long time to even exchange money or people were not allowed to withdraw money. 
“Where does the government have the legal authority to do it in this manner?”
Agriculture being the mainstay of the economy, farmers should be protected but they are facing problems as the rural cooperative banks have stopped functioning, he added.
Speaking about the rights of citizens, the former minister said that the government has no authority to take away the right to property from the people. 
“Legal tender is a property in my hand and the government cannot take it away by an executive order. Under article 300 (A) of the Indian constitution, I have a legal right to property. My money, which is legal tender, is a property in my hand; it is my property which I use to buy goods and services or transact anything else, so under those circumstances without legislation you cannot take away my property, so all this is being adjudicated in a court of law; yes the Supreme Court is looking into all this legal aspects," he maintained.
The inconvenience part apart, there is a fundamental question mark with regard to the legality of the entire exercise, which has been carried out by the government, he said.
Asked about legal intervention to address the issue, he said: "The court has been known to set the clock back, the court has set the clock back on the imposition of president's rule in Arunachal Pradesh, the court has set the clock back on the allocation of spectrum, the court has set the clock back on the allocation of the coal mines, so if the court finds that the exercise has been illegal per se, it can also set the clock back on demonetization."
He said even the objectives the government cited for the demonetization like curbing black money or curbing terror financing, or controlling counterfeit currency in circulation are hard to achieve.
Organized by the AMUAA with traditional gaiety and fervor, the Sir Syed Day had Tewari as the chief guest, where he spoke on Sir Syed's vision to enlighten people. 
AMUAA’s President Sohail Ahmad welcomed the guests and Vice President Salman Khalid proposed a vote of thanks. The function was moderated by General Secretary Arshad Ali Khan and Abdur Raheem Khan.

“There is no black money, white money or grey money, money is only money, there are two economies — a formal economy and a non-formal economy, you have to find a pathway as to how the non-formal economy can merge into the formal economy so that everything is subject to taxation and the government gets its due,” said Tewari.
He said the RBI act, 1934, only authorizes the government to demonetize a particular series in a currency; it does not have the authority to demonetize an entire denomination of the currency. “What the government has done, does not hold merit and only reveals their sheer callousness; it reveals that the government was completely unprepared to deal with the situation like there was not enough currency for exchange, the ATM machines were not calibrated to accept the new 2,000 rupee notes that led to problems for the people. This is nothing but mismanagement.

Source: Arab News