3 Dec 2016

Restriction on cash-withdrawal under demonitizaton policy not illegal : Delhi High Court

By an order passed yesterday in Ashok Sharma v. Union of India [Writ Petition (Civil) No. 11130/2016, order dated 02.12.2016] a Division Bench of the Delhi High Court has dismissed the writ petition challenging the monetary limit imposed by the Central Government on cash withdrawals.

The High Court bench, headed by the Chief Justice, noted the relevant notification and the contentions of the party to opine that the notification and the underlying action were within the policy domain of the executive and could not be re-appreciated by the judiciary.

The findings of the High Court are in the following terms;
"7. Apparently, the restriction imposed under Clause 2(vi) is only with regard to cash withdrawal from a bank account over the counter. There are no restrictions or limits for operating the bank account by non-cash method. This is clear from Clause (vii) which provides that there are no restrictions on the use of any non cash method of operating the account of a person including cheques, demand drafts, credit or debit cards, mobile wallets and electronic fund transfer mechanisms or the like. Therefore, the contention of the petitioner that Clause 2(vi) infringes the right of the account holder to withdraw from his account on demand is factually incorrect and misconceived. Be it noted that it is always open to the account holder to withdraw from his account on demand, but the restriction is only with regard to withdrawal in the form of cash. Even assuming that the restriction so imposed on cash withdrawal from a bank account has resulted in some inconvenience or prejudice to the petitioner, we are unable to hold that the same runs contrary to Section 5(b) of the Banking Regulation Act, 1949. 
8. We also found that the Petitioner’s contention that Clause 2(vi) of the Notification dated 08.11.2016 shall not be made applicable to the bank deposits of the period prior to 08.11.2016, is wholly misconceived. According to us, no such distinction can be drawn between the bank deposits of the period prior to 8.11.2016 and after 8.11.2016 since the whole purpose of the restrictions imposed on cash withdrawal for a specified period i.e., upto 30.12.2016 appears to be to meet the demand of liquid cash in circulation in the light of the ban imposed on the bank notes of the denominations of Rs.500 and Rs.1000 under the Notification dated 8.11.2016. 
9. It may be added that the manner in which the decision to withdraw the bank notes of specified amount w.e.f. 09.11.2016 is to be implemented is a policy decision which is beyond the scope of powers of judicial review. The law is well settled that the Court can only interfere if the policy framed is absolutely capricious or not informed by reasons or totally arbitrary and founded ipse dixit offending the basic requirement of Article 14 of the Constitution of India. It is also a settled principle of law that the Court cannot strike down a policy decision taken by the Government merely because it has been contended that another decision would have been fairer or more scientific or logical or wiser. The wisdom and advisability of the policies are ordinarily not amenable to judicial review unless the policies are contrary to statutory or constitutional provisions or arbitrary or irrational. {Vide: M.P. Oil Extraction v. State of M.P. (1997) 7 SCC 592; Ram Singh Vijay Pal Singh v. State of U.P. (2007) 6 SCC 44; Villianur Iyarkkai Padukappu Maiyam v. Union of India (2009) 7 SCC 561; State of Kerala v. Peoples Union for Civil Liberties (2009) 8 SCC 46 and M.P. v. Narmada Bachao Andolan (2011) 7 SCC 639
10. In this context we may also refer to Census Commr. v. R. Krishnamurthy (2015) 2 SCC 796 wherein it was held by the Supreme Court that the interference with the policy decision and issue of a direction to frame a policy in a particular manner are absolutely different and the courts are not to plunge into policy-making by adding something to the policy or by issuing directions describing the manner in which a statutory Notification could be implemented.
11. Having considered an identical issue arising out of the very same Notification dated 8.11.2016, a Division Bench of this Court to which one of us, (Chief Justice) was a member held in W.P.(C) No.11234/2016 titled as Birender Sangwan vs. Union of India and Ors. as under;
"The law is well settled that on matters affecting policy this Court will not interfere unless the policy is unconstitutional or contrary to statutory provisions or arbitrary or irrational or in abuse of power, since the policy decisions are taken based on expert knowledge and the Courts are normally not equipped to question the correctness of the same. The scope of judicial enquiry is therefore confined to the question whether the decision taken by the Government is against any statutory provision or it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution of India. [Vide: Parisons Agrotech (P) Ltd. v. Union of India (2015) 9 SCC 657, Manohar Lal Sharma v. Union of India (2013) 6 SCC 616, Union of India v. Dinesh Engg. Corpn. (2001) 8 SCC 491
The power of judicial review cannot be extended to determine the correctness of such a policy decision or to find out whether there could be more appropriate or better alternatives. As held in BALCO Employees’ Union Vs. Union of India (2002) 2 SCC 333, it is not within the domain of the Courts to embark upon an enquiry as to whether a particular public policy is wise or whether a better public policy can be evolved."
12. For the aforesaid reasons the writ petition is devoid of merit and the same is accordingly dismissed."

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