Is there a printing problem with new notes, SC asks Centre

New Delhi: The Supreme Court on Friday took on the Centre over demonetisation of Rs 500 and Rs 1000 notes, saying, "There are difficulties.  You can't dispute that."

"We will have riots on the streets," the apex court observed.

The Supreme Court dubbed as a "serious issue" the long queues outside banks and post offices and expressed its reservation on the Centre's plea seeking a direction that no other court in the country should entertain petitions challenging the November 8 notification demonetising Rs 1,000 and Rs 500 currency notes.

"It is a serious issue which requires consideration," a bench comprising Chief Justice T S Thakur and Justice A R Dave said, while asking the parties to be ready with data and other issues in writing.

Chief Justice TS Thakur said because of these difficulties, people are approaching the courts.

In response, Attorney General Mukul Rohatgi said the queues are getting shorter and even suggested that the CJI can go out during lunch and himself look at the queue.

"Kindly go in the lunch time," the AG told the bench and took objection to senior advocate Kapil Sibal, appearing for a private party, for allegedly exaggerating the situation.

"It's a political attempt in the court. I have seen your (Sibal's) press conference also. You are not appearing for a political party, but for an advocate. You are turning the apex court into a political platform," Rohatgi said.

"You have scrapped 500 and 1,000, but what happened to the 100 rupee note?" the Chief Justice asked the government, which replied that ATMs needed to be recalibrated because they have a single drawer for Rs. 100 notes.

"The last time you said you are working out relief but you have reduced the withdrawal amount to 2,000. What's the problem? Is it printing problem?" Justice Thakur asked the government.

Replying to the Court’s question, Rohatgi said that even after printing, the new notes have to be transported to different parts of the country to lakhs of bank branches and ATMs have to be recalibrated.

“We have given relief to farmers, wedding and small traders,” the lawyer said.

The government earlier this week reduced the Rs 4,500 limit for the exchange of notes at banks to Rs 2,000 per day, saying it would enable more people to get cash.

To questions from the bench, the AG said Rs 100 notes are in circulation and the ATMs needed to be re-calibrated to issue new currency notes of Rs 500 and Rs 2,000.

He also elaborated on the steps taken by the government to meet the situation by stating that besides reducing the exchange limit, farmers have been allowed to withdraw Rs 50,000 and people having weddings at home can withdraw Rs 2.5 lakh.

"At a petrol pump, which has card swipe machine of SBI, people can go and withdraw money upto Rs 2,000. We have been monitoring the situation day-by-day," Rohatgi said and added that the idea was to push the new notes of Rs 2,000 as one note of Rs 2,000 is equal to 20 notes of Rs 100.

At this point, Sibal interrupted and said the problem is of printing as they need to print Rs 23 lakh crore, but they do not have the capacity to do that.

"Already they have frozen Rs 14,000 crore and it is not clear under which law they have done so," he said, contending that it is a serious situation where people cannot withdraw their own taxed money.

"They are trustee, how can they not let us withdraw our legitimate money," he said, adding that "the situation has turned from bad to worse".

Sibal said that the government was not concerned about the people living in remote areas of the north-east, Himachal Pradesh and Naxal-hit district of Bastar where people have to walk for 20 kms to reach an ATM.

While the Congress leader was making the submission pointing out the deficiencies and the steps taken by the Centre, the AG said, "We need not give any explanation as right now it is the interim application that has to be heard."

Realising that the bench has reservation in entertaining the Centre's application, Rohatgi said, "We will file a transfer petition".

The matter will be heard again on November 25.

The Centre has moved the apex court seeking a stay on the proceedings before various high courts and other courts except the apex court against demonetisation issue, saying otherwise it will create a lot of confusion.

The apex court had on November 15 refused to stay the government's demonetisation notification, but asked it to spell out the steps taken to minimise public inconvenience.

Out of the four PILs in the apex court on the demonetisation issue, two were filed by Delhi-based lawyers Vivek Narayan Sharma and Sangam Lal Pandey, while two others were filed by individuals, S Muthukumar and Adil Alvi.

The petitioners have alleged that the sudden decision has created chaos and harassment to the public at large and the notification of the Department of Economic Affairs, Ministry of Finance be either quashed or deferred for some time.

Prime Minister Narendra Modi, in a televised address to the nation on November 8, had announced that Rs 500 and Rs 1000 notes will no longer be legal tender from November 9.

He had said the government has declared a "decisive war" against black money and corruption.

But in response to a lawyer who complained that the newly issued Rs 2000 notes bleed colour when they are wet, Chief Justice Thakur observed, “then don’t put them in water.”

Lawyer ML Sharma, who made the complaint, is among a group of petitioners who have asked the top court to cancel the ban on Rs. 500 and Rs. 1,000 notes announced a little over a week ago by Prime Minister Narendra Modi.