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Pakistan prints more Indian currency than Pakistani currency. N. Singh, the Deputy CM of JK

Pakistan prints more Indian currency than Pakistani currency. N. Singh, the Deputy CM of JK

‘Corruption, black money & terrorism are festering sores’ for every Nationalist Indian as these activities threaten the national character and integrity by weakening the Nation from within.

Prime Minister Narendra Modi on the night of November 8, 2016 announced demonetization of Rs.1000 and Rs.500 notes with effect from midnight of the same day, making these notes invalid in a major assault on black money, fake currency and corruption.

As per Mr. Nirmal Singh, the Deputy Chief Minister of Jammu and Kashmir, Pakistan prints more Indian currency than Pakistani currency. Singh’s comments echo media reports that claimed that Fake Indian Currency Notes (FICNs) are printed in government presses in Lahore, Quetta, and Peshawar. The ISI then smuggle FICNs into India via Sri Lanka, Nepal and Bangladesh. Smugglers are sold the FICNs in 2:1 ratio – two fake notes for the value of one original. The problem was accentuated when Pakistan began printing good copies of original currency notes that even our own security agencies and RBI found difficult to identify. And all this money was pumped into India to fund terrorist activities. This decision is a death blow to terror funding network. This step was necessary for national security.

The bold step taken by the Prime Minister has hit certain persons in the field of corruption, black money and terror funding very hard, almost delivering a knockout punch.

Obviously, some elements within the country are upset with this move and have approached High Courts and Supreme Court for demonizing the Prime Minister over demonetization of high value currency. It is reported that Madras High Court has thrown out the petition filed against demonetization. The vacation bench of the Bombay High Court has directed the petitioner to mention before the regular bench when the court reopens after diwali vacation on 15th November, 2016.

Many advocates are seen arguing that the Government has not amended the law and hence the exercise of invalidating the high denomination notes is illegal and void. I asked one Advocate about which law requires to be amended or what new legislation needs to be enacted. He did not answer. Probably because either being an Advocate, he doesn’t give free advice or he was totally disturbed after getting fatally mauled by the demonetization of high value currency by the Central Government.

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I am not sure which law is required to be amended or whether any new law is required to be enacted. However, a perusal of relevant provisions in the Reserve Bank of India Act, 1934 clears the doubts and shows that the action on the part of the Government is valid and within the frame work of law.

Section 26 of the Reserve Bank of India, Act, 1934 deals with legal tender character of notes issued by the RBI.

Sub-section (1) of section 26 of the RBI Act provides that subject to the provisions of sub-section (2), every bank note shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government.

Sub-section (2) of section 26 provides that on recommendation of the Central Board the Central Government may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender save at such office or agency of the Bank and to such extent as may be specified in the notification.

The plain reading of sub-section (2) of section 26 of the RBI Act, 1934 clearly gives power to the Central Government to declare any series of bank notes of any denomination as ceasing to be legal tender from any date of its choosing.

Accordingly, on the recommendation of the Central Board, the Central Government has passed the notification No. S.O. 3407(E) dated 08/11/2016 and published in the Gazette of India under serial No. 2652 in Extraordinary Part II, section 3 Sub-section (ii) on 08/11/2016 declaring high value denomination notes of Rs.500 and Rs.1,000 ceasing to be legal tender w.e.f. midnight of 08th-09th November, 2016.

For a layman like me, this is perfectly a valid exercise. Notification satisfies all the ingredients of sub-section (2) of section 26 of the RBI Act, 1934.

Government has also announced certain measures to alleviate the inconvenience that would be caused to the honest people. Those having black money or indulging into terror funding and other anti-social activities are naturally caught with their pants down.

These people, whether within India or without India, would naturally make a loud noise. The more noise they make, the more pathetic they would look.

Let them continue their pathetic outburst. Honest citizens of India are mature enough to bear the short term inconvenience for long term benefits like throttling not only terror funding but also hawala (money laundering) operations and tax evasion.

Hope the Central Government under the leadership of PM Narendra Modi pursues the matter to its logical end and does not become lax by efflux of time. by

Kishor Satwick
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