The Karnataka High Court.
Credit: DH File Photo
Bengaluru: The High Court of Karnataka has directed the union government to consider a Kalaburagi businessman's request for the exchange of demonetised currency worth Rs 9.84 lakh.
A division bench comprising Justices S Sunil Dutt Yadav and Ramachandra D Huddar passed this order while disposing of a writ appeal filed by the Reserve Bank of India (RBI).
The businessman, Sanju Kumar, petitioned a single bench against the RBI's decision to decline his representation, citing the expiry of the deadline for the exchange of demonetised notes.
Kumar pointed out that the money was seized from him on March 19, 2015, in connection with a criminal case and was later returned through a court order. By then, the Centre had demonetised Rs 500 and Rs 1,000 notes.
On March 22, 2024, the single bench directed the RBI to consider his representation and pass appropriate orders in accordance with the Supreme Court's judgement in the Vivek Narayan Sharma vs others case.
The RBI filed an appeal against this order, arguing that only the union government could consider the request for exchanging demonetised currency with legal tender.
The division bench noted that in cases of confiscation of specified bank notes by investigating agencies, and courts depositing them, the person who receives the banknotes may seek their exchange by producing the court's direction.
It also pointed to twin obligations to get the benefit of the Ministry of Finance's notification dated May 12, 2017. The law enforcement agency must mention the serial numbers of the bank notes confiscated and/or produced before the court and the court concerned, enabling the litigant to make a request for their exchange.
Referring to the businessman's case, the division bench stated that although the trial court had ordered the release of the demonetised currency, its order did not comply with the Ministry of Finance's notification.
"Accordingly, to ensure that the relief afforded by the learned single judge is effective, and taking note of the notification and requirement of the notification dated 12.05.2017, it would be appropriate to reserve liberty to the petitioner to approach the same court that has returned the demonetised currency that was seized in the proceedings, with a request to pass a fresh order taking note of the requirements of the notification of Ministry of Finance, New Delhi, dated 12.05.2017..," the bench said.
After the court passes such an order, the petitioner may submit a representation to the union government. In the light of the lapse of time, the fresh representation will be treated as a continuation of earlier representations made to the RBI, the court said.