$~11
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 5026/2014 & CM No.2893/2016 (of R-5 for condonation of
20 days delay in filing CA)
ASHOK KUMAR (KARTA) & ORS. ..... Petitioners
Through: Ms. Vandana Sharma, Mr. Samundra
Jain and Mr. Abhay Singh Kushwaha,
Advs.
Versus
THE DEPUTY GOVERNOR & ORS. ..... Respondents
Through: Mr. J.P. Sengh, Sr. Adv. with Mr.
H.S. Parihar, Mr. K.S. Parihar and Ms.
Vanessa Singh, Advs. for R-1&2.
Mr. Rajat Sharma and Mohd.
Nadeem, Advs. for R-3.
Mr. Vivek Singh and Mr. Randhir
Kumar, Advs. for R-4.
Mr. Ashish Prakash, Mr. Ramesh
Kumar and Mr. Amrendra Singh,
Advs. for R-5.
Mr. M.C. Saluja and Mr. Rajvinder
Singh, Advs. for R-6.
Mr. Kush Sharma, Adv. for R-7.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
ORDER
% 20.01.2016
1. The 45 petitioners claim to be carrying on business of money exchange of soiled, mutilated and torn Indian Currency Notes and have filed this petition impleading the Reserve Bank of India (RBI), Punjab National Bank (PNB), State Bank of Bikaner & Jaipur (SBBJ) and Bank of India W.P.(C) No.5026/2014 Page 1 of 9 (BOI) as respondents thereto and seeking a direction to the said respondents to permit the petitioners to exchange the soiled, mutilated and imperfect Indian Currency Notes, as per the Scheme circulated by the respondent RBI.
2. The petition was entertained and counter affidavits have been filed.
3. The senior counsel for the respondent RBI has at the outset contended that since the petitioners claim to be carrying on business in the exchange of soiled, mutilated and imperfect Indian Currency Notes i.e. they buy such Currency Notes by paying to the holder thereof less than the value of the Currency Notes and then present the Currency Notes to the RBI/other Banks for exchange and which business is illegal, they are not entitled to any such direction. The counsels for the other Banks have also voiced the same view.
4. However, on enquiry as to whether the said business is barred or prohibited under any Law, Rule or Regulation, none is shown. It is also not the case of respondent that the Scheme circulated by RBI for exchange of soiled, mutilated and imperfect Indian Currency Notes places any prohibition on such business or limits in any manner the number of Currency Notes which any one individual can present at a time for exchange.
5. I am of the view that without such a business being barred by any Law, Rule or Regulation made under a Law or otherwise shown to be illegal W.P.(C) No.5026/2014 Page 2 of 9 or against public policy, the respondents cannot object to the grant of relief, if any to the petitioners on the principle of the petitioners and their customers from whom they purchase such Currency Notes being in pari delicto. To me, it appears that it matters not to the respondents, for what value the petitioners have acquired the soiled, mutilated and imperfect Currency Notes which are presented for exchange at the Counter of the respondent RBI or other Banks; that is a matter of agreement between the holder of the Currency Notes who has transferred / sold the same to the petitioners and the petitioners. As long as the petitioners or any of them are lawful holders thereof, they would be entitled to present the same for exchange. Experience of life shows that the task of visiting the Bank and having the soiled / mutilated Currency Notes exchanged is a tedious and time consuming one, often not worth the value of the Currency Notes to be exchanged. In such a scenario, persons such as the petitioners, easily accessible in the markets, fill the vacuum by purchasing such Currency Notes at a discount and taking over the task aforesaid of visiting the Bank, standing in a queue and having the Currency Notes exchanged, for the consideration of course of having paid discounted value thereof.
6. Article 301 of the Constitution of India guarantees freedom of trade W.P.(C) No.5026/2014 Page 3 of 9 and commerce and Article 304 empowers the legislature to by law place only such restriction thereon as are reasonable and required in public interest. (see The District Collector of Hyderabad Vs. Ibrahim & Co. (1970) 1 SCC
386). Article 19(1)(g) also confers it a status of fundamental right and Article 19(6) again permits reasonable restrictions thereon to be placed only by law made in interest of general public. The respondents have not cited any law by which the trade and business of soiled / mutilated Currency Notes may be restricted.
7. The counsels for the respondents have next contended that the Master Circular dated 1st July, 2013 of the respondent RBI directing the Banks to provide the service inter alia of exchanging soiled / mutilated / defective Currency Notes is for the facility of the citizens and members of the public; individual citizens, members of public would approach the RBI or the Banks for exchanging a few Currency Notes at a time; on the contrary the petitioners, since are carrying on business therein, present a large number of Currency Notes together for exchange and which poses administrative difficulties in exchange thereof. It is informed that exchange of a soiled, mutilated and imperfect Currency Note entails a detailed examination thereof by an expert to judge the genuineness thereof as well as computation of the W.P.(C) No.5026/2014 Page 4 of 9 value to be paid therefor in accordance with the said Master Circular and all of which takes time.
8. I am of the opinion that as long as the trade/business which the petitioners are carrying on is not controlled/regulated by law, the aforesaid factors would not permit the respondents to refuse to exchange the soiled / mutilated / imperfect Currency Notes so presented by the petitioners, thereby curtailing the business / trade therein of the petitioners. Such refusal would amount to restricting by executive fiat what has been permitted by the Constitution of India to be done by law only. The same cannot be allowed.
9. The Indian Currency Notes contain a promise on the part of the Govt. of India / RBI to pay to the bearer thereof the value thereof and as long as the petitioners are the bearer of the said Currency Notes, even though soiled / mutilated / imperfect, by lawfully acquiring the same from earlier bearer thereof, the respondents are bound to exchange the same in terms of the Master Circular of the RBI.
10. The Master Circular is not informed to contain any limitation on the number of soiled, mutilated and imperfect Currency Notes which can be presented at a time for exchange in accordance therewith and in the absence of any such restriction, no grievance can be made by the respondents of a W.P.(C) No.5026/2014 Page 5 of 9 large number of such Currency Notes being presented for exchange at a time.
11. I am a little surprised to find in the Master Circular aforesaid a provision for the respondents to pay not the full value of the Currency Notes but only some percentage thereof, depending upon the state in which the soiled, mutilated and imperfect Currency Note is. On enquiry, the senior counsel for the respondent RBI has explained that the said provision has been made, as often different parts of the same Currency Note are presented at different times for exchange and such a provision has been made to prevent a person holding only a part of a Currency Note from receiving the full value thereof and with the Govt. of India / RBI becoming liable to pay for the remaining part of the Currency Note as and when presented. It is also stated that the same is as per Section 28 of the Reserve Bank of India Act, 1934.
12. I am of the view that with the leaps in technology, the respondent RBI should have a relook on the technology for printing of Currency Notes to ensure that in the event of mutilation thereof, the value thereof is paid to one person only and is not claimed repeatedly as well at the scheme of exchange of soiled / mutated Currency Note so that bona fide bearer thereof is not deprived of full value thereof. It prima facie appears that benefit with W.P.(C) No.5026/2014 Page 6 of 9 advantage can be taken of computerisation to ensure that once a full value of a soiled / mutilated Currency Note has been paid, it is not repaid, by requiring the numbers of the Currency Note of which value has been paid to be entered in a central grid or the like.
13. To me it appears that natural mutilation of Currency Note should not come in the way of last bearer / holder thereof realising the full value thereof; the State / Government, on the possibility of becoming liable to pay some value of such Currency Note to holder of another part thereof, cannot withhold the full value, thereby profiteering therefrom to the prejudice of the citizen.
14. However the petitioners have not challenged the Act, Rules and Regulations in this regard and the aforesaid is mentioned only since the questions in that regard arose during the hearing.
15. That still leaves for consideration the form of relief which can be granted to the petitioners.
16. The senior counsel for the respondent RBI and the counsels for other Banks state that they are exchanging the Currency Notes in accordance with the Master Circular aforesaid and the Rules and Regulations and the petitioners have not made out any case of violation thereof by any of the W.P.(C) No.5026/2014 Page 7 of 9 Banks. It is stated that when a large number of Currency Notes are presented for exchange, time would automatically be taken in examination thereof and only thereafter they can be exchanged in accordance with the Master Circular and the Rules.
17. Per contra, the counsel for the petitioners states that the Banks, in practice do not accept the soiled, mutilated and imperfect Currency Notes and such denial is not in writing or otherwise recorded but by asking the petitioners to visit repeatedly or by simply not accepting or accepting a few soiled / mutilated Currency Notes at a time, even though there is no Rule or Regulation in this regard.
18. The position / version of the petitioners can be well envisaged. However no purpose would be served in generally issuing directions in this regard and of enforcement whereof or detection of violation thereof, there are no means. Such direction would be to the same effect as the Master Circular aforesaid of RBI and with which RBI and the Banks are in any case expected to abide.
19. The respondent RBI should therefore itself consider laying down a procedure for exchange of soiled, mutilated and imperfect Currency Notes, presented in small number or in bulk, so that those presenting / applying for W.P.(C) No.5026/2014 Page 8 of 9 the same know what to expect and are able to have a record of their application and dealing thereof by the Banks so that grievance of non- compliance with proof can be made and action against erring Bank can be taken. Even if time is to be taken to assess the genuineness and value of the soiled, mutilated and imperfect Currency Notes presented for exchange, the applicant should be informed of the same. I reiterate, the grievance of impediments put in exchange and absence of well defined procedure thereof with time schedules, is a serious one, discouraging and depriving a citizen of the value of soiled / mutilated Currency Note and thereby breaking the promise printed thereon.
20. A decision in this regard be taken by the respondent RBI within six months. The mechanism prescribed should also ensure that if any of the Banks do not comply therewith, the aggrieved person has proof thereof and is able to take his remedy in accordance with law and / or complain to the respondent RBI.
The petition is disposed of.
No costs.
RAJIV SAHAI ENDLAW, J.
JANUARY 20, 2016 bs..
W.P.(C) No.5026/2014 Page 9 of 9