Demonetisation: CPI(M) Joins Legal Battle In Supreme Court
CPI members protest against the demonetisation of Rs 1000 and Rs 500 currency notes, at Jantar Mantar in New Delhi on Monday. (Photographer: Manvender Vashist/PTI)

Demonetisation: CPI(M) Joins Legal Battle In Supreme Court


The Communist Party of India (Marxist) on Wednesday became the first political party to join the legal battle in the Supreme Court against the Modi government's controversial demonetisation decision.

The remarks made by the apex court on November 18 that demonetisation "may lead to riot-like situation" was reflected in the petition filed by the CPI(M) through its General Secretary Sitaram Yechury.

Earlier, CPI national executive member Binoy Viswam, in his individual capacity, had moved the apex court challenging the constitutional validity of introducing Rs 2,000 and Rs 500 currency notes with Devanagari script in its design. The petition filed by CPI(M) claimed that a riot-like situation has been created by demonetisation move and raised the issue of waiving of Rs 1.14 lakh crore of bad debts by government banks in last three years.

"At the same time, loans worth lakhs of crores of rupees are still outstanding. The government has not made public the names of the beneficiaries of the waiver and the names of the big defaulters, both individuals and corporations," it said.

"Demonetisation has created a riot-like situation in the country. The government should ensure that common people have immediate access to enough money to pay for their daily needs and health emergencies. The country has virtually come standstill," the plea filed through advocate PV Dinesh said.

Seeking an apex court direction to the Centre to allow people to use old currency notes till December 30 or till adequate supply of new notes, the plea contended that much of economic transactions in India are cash-based due to the presence of agriculture as a major source of livelihood.

The plea also sought a direction to the Centre to place on record the measures they have taken for supply of adequate currency notes in a time-bound manner. It said that if the government was targeting black money, it needed a more efficient and effective tax administration.

"If black money is the target of attack, it then requires a multi-pronged approach towards a more efficient and effective tax administration that would help unearth such illegal activities. The soft approach of the government towards the big loan defaulters questions the very bonafides of the claim of the respondents," it said.

Finding fault in the demonetisation move, the party said, "If it is the government's case that high-value denomination currency is used to hoard black money, then the decision to re-issue new Rs 500 and Rs 1,000 notes does not make sense.

"Issuing even higher value Rs 2000 note is completely inexplicable and puzzling," it said, adding that in the last five years, Income Tax raids have found that only five-six per cent black money is kept in hard cash and those with sizable amount find ways to protect themselves.

"Those who have amassed sizable black money are equipped to find ways around demonetiSation by converting their existing cash to bullion, gold jewellery, real estate and foreign currencies through brokers and middle-men. In fact, organised middle-men and touts have already emerged to convert black money into white for a commission," it said.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.