On 16 November 2016, Prime Minister Narendra Modi had made the announcement of demonetising Rs 1,000 and Rs 500 currency notes. Now, six years since the mammoth exercise — which was praised by many and criticised by several, including the Opposition, the Supreme Court has backed the Narendra Modi decision in a landmark 4-1 majority judgment. The majority verdict said it was “not relevant” whether the objective of the overnight ban was achieved.
“There has to be great restraint in matters of economic policy and the court cannot supplant the wisdom of the executive by a judicial review of its decision,” a five-judge Constitution bench of the apex court, headed by Justice S A Nazeer, said.
Justices S Abdul Nazeer, B R Gavai, A S Bopanna, V Ramasubramanian found no flaw in the 8 November decision, saying it was taken after consultation between the RBI and the Union government.
However, Justice B V Nagarathna dissented from the majority judgment, saying the scrapping of the whole series of Rs 500 and Rs 1,000 currency notes had to be done through a legislation and not through a gazette notification as Parliament cannot be left aloof in a matter of such critical importance. She held that the demonetisation exercise was “vitiated and unlawful.”
She also differed from the majority’s view on point of the Centre’s powers under Section 26(2) of RBI Act. “When the proposal for demonetisation originates from the Central Govt, it is not under Section 26(2) RBI Act. It is to be way of legislation, and if secrecy is needed, then by way of an Ordinance,” said Justice B V Nagarathna.
The sole woman on the bench, Justice B V Nagarathna added that the demonetisation of an entire series of notes at the Centre’s instance is a far more serious issue that has wider implications on the economy and the citizens of the country. “In my view, the power of the central government being vast has to be exercised through a plenary legislation rather than by an executive act by issuance of notification. It is necessary that Parliament, which consists of the representatives of the people of the country, discusses the matter and thereafter, approves the matter.”
She noted that the crux of the argument by petitioners was such a proposal should originate from the RBI. However, in this case it was the Centre that wrote a letter to RBI on 7 November advising for such a recommendation and hence, cannot be construed as a “recommendation”.
The judge, however, noted that she wasn’t questioning the objectives of the exercise itself, but only the legal viewpoint. “Demonetisation was, beyond a pale of doubt, well-intentioned. Best intention and noble objects are not under question. The measure has been regarded as unlawful only on a purely legal analysis, and not on the objects of demonetisation,” she said, further calling the decision “well-intentioned and well thought of”. It targeted evils such as black money, terror funding, and counterfeiting, she added.
Also read: Timeline How the demonetisation case unfolded
But who exactly is Justice BV Nagarathna? Here’s a closer look.
CJI in the making
In August 2021, B V Nagarathna was elevated to being a Supreme Court judge from a judge in the Karnataka High Court. With her elevation, she will be in line to become the first woman Chief Justice of India in 2027 — a historic moment for the Indian judiciary. When she becomes CJI, she will follow in the footsteps of her father, ES Venkataramiah, who was CJI for around six months in 1989.
Born on 30 October 1962, Nagarathna began her career when she enrolled with the Karnataka Bar Council in 1987 and practised constitutional law, commercial law, commercial law and administrative law.
In February 2008, she was appointed as an additional judge in the Karnataka High Court and two years later, she was made a permanent judge.
In the following year’s November, B V Nagarathna made headlines when she and two judges of the Karnataka High Court were locked in a room by a group of protesting lawyers. She later was quoted as saying, “We are not angry, but sad that the Bar has done this to us. We have to hang our heads in shame.”
Her landmark judgments
As a judge in the Karnataka High Court, she presided on some key cases on education policy. A bench led by her directed a committee of experts to submit a draft roadmap for improving the infrastructure of facilities in government schools.
During the coronavirus pandemic, she was hailed for her decision on directing the state government to ensure a wider reach of online classes. “Pandemic or no pandemic, education of children must go on,” she consistently held.
She also monitored the migrant crisis during the pandemic and on 30 May 2020, directed the state government to place on record its “systematic plan” to facilitate transport of more than 6,00,000 migrants who are yet to return to their respective states.
She, along with Chief Justice Oka, also directed the state government to make adequate arrangement for food and water for migrants destined to travel in Shramik trains. Based on her observations, the state government decided to bear the costs of migrants’ travelling to their native states.
One of her most significant judgments was on the matter of the need to regulate electronic media. In a 2012 order, she had written: “While truthful dissemination of information is an essential requirement of any broadcasting channel, sensationalism in the form of ‘Breaking News’, ‘Flash News’ or in any other form must be curbed.” She had then urged the Centre to set up an autonomous and statutory mechanism to regulate broadcast media.
Justice BV Nagarathna was also part of the 2019 judgment that ruled a temple is not a “commercial establishment” and hence, employees of a temple in Karnataka are not entitled to gratuity under Payments of Gratuity Act. She held that a temple employee will be entitled to gratuity benefits under the Karnataka Hindu Religious Institutions and Charitable Endowment Act, which is a special law enacted in the state and not under the Payments of Gratuity Act.
She has also called out the patriarchal way of society during a divorce case in 2020. In her order, she had said: “People always say woman empowerment, but the society does not know how to treat an empowered woman. Parents don’t teach their sons how to treat an empowered woman. That is a problem with men, I will say that.”
With inputs from agencies
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