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

Nazeer J: I was seeing your prayers in the petition, there is no challenge to S 26(2). You have only challenged the notification.

Chidambaram: I have challenged it squarely in my second prayer.

Chidambaram: If you are bestowing a power to demonetise on the govt, you are conferring a power which the Parliament has, but where is the guidance?

BVN J: In these judgements, essential powers have been delegated and therefore, they suffer from the vice of excessive delegation. But, here, there is a substantive provision in an Act, namely, S 26(2).

Chidambaram: Where is the guidance?

BVN J: These judgements deal with the delegation of power. They may not be apt.

Chidambaram quotes, "Substantive provisions of the Act confer powers on the Administrator. The power of regulation suffers from excessive delegation of legislative power and must be held to be constitutionally invalid."

Chidambaram takes the court through Harakchand Ratanchand Banthia v Union Of India [AIR 1970 SC 1453]. 

Chidambaram: Compare now with S 26(2). Any series, even a series of notes issued the previous day can be demonetised. It is an extreme example, but it helps flesh out the scope of the law.

Urges court to read down S 26(2).

Chidambaram quotes, "Parliament has established no criteria, no standards and [no] principle on which a particular disease or condition is to be specified in the Schedule...As a consequence, the Schedule in the rules must be struck down."

Chidambaram quotes, "The question for decision then is, is the delegation constitutional in that the administrative authority has been supplied with proper guidance. In our view the words impugned are vague."

Chidambaram reads from Hamdard Dawakhana Lal v Union of India [AIR 1960 SC 554].