DEMONETISATION Valid Or Not? : Supreme Court Constitution Bench Hearing- LIVE UPDATES

Chidambaram: Therefore, anything to do with currency must emanate from the RBI. That is the foundation of my submissions.

Chidambaram: 17.97 lakh crores was the total currency in circulation. Rs 500 and Rs 1000 represented 15.44 lakh crores. When that was withdrawn, the country was left with only around 2 lakh crores, which was not enough to sustain the economy.

Chidambaram: As the GDP grows, more people will have more income. Requirement for currency increases. This power to decide what amount of cash is needed in the economy is given to the RBI. 

Chidambaram reads out from the affidavit, highlighting the importance of currency and cash payment.

"Data has shown that even in advanced countries, currency represents the overwhelming means of payment."

Chidambaram: The first submission is, what is the scope of S 26(2)? I have made this submission on the last day, and I will elaborate on this today.

Chidambaram: In the context of ss 22-25, look at s 26.

Chidambaram: Therefore, the central govt cannot initiate on its own any proposal related to banknotes. It can only act on the recommendation of the Central Board.

Chidambaram: The point I am trying to make by referring to ss 22-26, is that the sole right is with the RBI, & the only power of the central govt is only on the recommendation of the Central Board.

Chidambaram, referring to S 24: Under the act, the highest denomination can be Rs 10,000.

Nazeer J: Has such a currency note ever been in circulation?

Chidambaram: Yes, before the 1946 demonetisation.

Chidambaram takes the court through other provisions in ss 13, 22, etc.

"S 22 talks about the right to issue bank notes. This is of central importance. In fact, this whole chapter is important."