While hearing its ongoing batch of petitions challenging demonetisation, the Supreme Court on Friday heard the Centre saying that judicial review of fiscal policy is "impermissible."
"Ultimately the scope of judicial review must be decided," the government's top law officer, Attorney General, Mukul Rohatgi said to a bench headed by Chief Justice T S Thakur, hearing a batch of petitions challenging the Reserve Bank of India's (RBI) 8 November notification that scrapped Rs 500 and Rs 1,000 notes.
While the centre has been seeking a stay on various cases in the high court's against demonetization, the Supreme court said it will frame broad questions on challenges to the demonetization scheme and hear the case in detail. "Depending on the questions framed, the high courts can take a call whether to hear the cases or send them here instead," the bench observed.
Senior advocates Kapil Sibal and P Chidambaram gave suggestions to the court on how the questions must be framed.
"The issue of district cooperative banks and cap on withdrawals has nothing to do with achieving the government's motives for demonetization," Chidambaram said, while asking for certain interim relief that would not affect the government's objectives. The court asked Rohatgi to take instructions on granting interim relief.
The supreme court also asked if the government had made the policy plans in secrecy. "When you made the policy on demonetisation, was it confidential?" the top court asked.
Appearing on behalf of the petitioners, Lawyer Prashant Bhushan told the court that there was a serious lack of preparation on part of the government to deal with the situation caused by demonetization. "There was no cash in ATMs, recalibration was not done well and cooperative banks were being discriminated against," Bhushan said.
However, Attorney general Mukul Rohatgi said the government had taken "all the necessary steps to ease the inconvenience of the public" and added that the policy has been a success with over Rs 11.5 trillion has come back to the system since November 8 and the RBI has ushered more than Rs 4 trillion in currency.
Chief Justice TS Thakur also asked why the Centre's order granting limit of Rs 24,000 per day to a person had not been complied with. "See if you can fix a limit below which the bank manager can't send you away or ration currency," the court added.
The case will be heard next on December 14.
Is it really impermissible for the apex court to hold judicial review on fiscal policy?
"Despite popular opinion that might hold the Supreme Court as excessively interventionist, India's judiciary has historically shown a reticence in interfering in matters of economic policy. For the most part, the court has been justified in acceding to the executive's expertise. But while there is certainly a kernel of rationality to such a theory of limited judicial review, it is dangerous to see judicial deference as forming part of an immutable doctrine. As the former President of the Israeli Supreme Court Aharon Barak had once observed, separation of powers exists to strengthen freedom and prevent the concentration of power in the hands of one governmental actor in a manner likely to harm the freedom of the individual," an extract explains from The Hindu's legal expert Suhrith Parthasarathy writing in a piece titled 'Contours of a challenge' published on December 2 regarding the Supreme Court demonetisation hearings.