Justice Nagarathna questions demonetisation’s impact on black money eradication: ‘98% currency came back’

Supreme Court judge Justice BV Nagarathna, who had opposed demonetisation in a January 2 verdict last year, asked how was black money eradicated when 98 percent of the currency came back to the Reserve Bank of India (RBI) during the process.

The Supreme Court judge was speaking at an introductory session of the courts and the Constitution Conference 2024 organised by NALSAR University of Law in Hyderabad on Saturday, Live Law reported.

In her speech, he spoke about her 2023 verdict in the demonetisation case when she had dissented to oppose the Centre’s demonetisation move. The Supreme Court had then upheld the Centre’s 2016 decision on demonetisation by a 4:1 majority verdict. Justice Nagarathna was in the minority.

‘98% of currency came back’

Justice Nagarathna said she was happy to be a part of the bench hearing the demonetisation case. Speaking about her dissent in that particular case, she noted that 86 percent of the currency constituted 500 and 1,000 rupee notes in 2016 when demonetisation happened.

“Eighty six percent of the currency was 500 and 1,000 notes, which I think the central government lost sight of,” Justice BV Nagarathna was quoted by Bar and Bench as saying.

She added, “98 percent of the currency came back, so where are we in black money eradication (goal of demonetisation)?”

The Supreme Court judge said she thought at that time that demonitisation “was a good way of making black money white money“.

Since 98 percent of the currency came back, “…I thought (at the time) it was a good way of making black money white money, of unaccounted cash entering the system. What happened with regard to income tax proceedings thereafter, we do not know. So this common man’s predicament really stirred me and I had to dissent,” Justice Nagarathna said.

Justice BV Nagarathna emphasised that “the manner in which demonetisation was done, was not correct”, Live Law quoted her as saying.

She said there was no decision-making process in demonitisation, which was in accordance with the law. “The haste with which it was done…some people say even the then Finance Minister did not know about it,” she was quoted as saying.