Nagpur: In a significant ruling, the Nagpur bench of the Bombay High Court has expressed strong displeasure over the stance of the Reserve Bank of India (RBI) for refusing to accept demonetised currency that had been seized by authorities during the 2016 demonetisation-era.
Observing that a citizen cannot be held responsible for circumstances beyond his control, the court stated that it was the RBI’s duty to assist in such cases. The division bench of Justice Anil Pansare and Justice Nivedita Mehta also indicated that compensation may be granted to the petitioner.
Cash Seized During Elections
The case pertains to petitioner Girish Malani, whose ₹2 lakh in ₹500 notes was seized by police on December 1, 2016, while he was travelling to Mahur for religious purposes. The seizure took place during municipal election checks.
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The case was later referred to the Income Tax Department, which found no irregularities and cleared the amount. However, the cash was returned to Malani on December 31, 2016—after the official deadline to deposit demonetised currency had expired.
Repeated Rejection by RBI
After receiving the money, Malani approached the RBI office in Nagpur in January 2017 to exchange the demonetised notes. However, the request was rejected.
Despite submitting written representations in March and April 2017, the RBI maintained its refusal. In June 2017, the RBI’s Mumbai office clarified via email that seized currency could be accepted as per a May 12 notification, yet the Nagpur office continued to deny the request.
Court Questions RBI’s Role
Taking serious note of the matter, the High Court observed that the petitioner was deprived of the opportunity to exchange the notes due to official action, and therefore should not be penalized.
The court emphasized that institutions like RBI must act responsibly in such situations and ensure that citizens are not subjected to undue hardship due to procedural lapses.
The ruling is expected to have wider implications for similar cases arising out of demonetisation-era disputes.
