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Jan 05, 2023

Why BJP's Celebration of SC's Demonetisation Judgment Is Bizarre

The government giving a political twist to the ruling betrays anxiety about the desirability of the demonetisation exercise in 2016.
FILE IMAGE: People standing in long queues to exchange their old Rs 500 and 1000 notes and withdraw cash from the ATM in New Delhi, November 2016. Photo: PTI/Subhav Shukla/Files

Former law minister Ravi Shankar Prasad demanded an apology from Rahul Gandhi for opposing demonetisation after the Supreme Court judgment in its favour.

For a government that accuses the opposition of ‘politicising’ issues and institutions at the drop of a hat, this was particularly disingenuous. The Supreme Court has found the demonetisation process to be constitutional, but it cannot protect the government from the well-founded charge that the policy was undesirable and has harmed the economy.

As the court itself, in the majority judgement, has stated in para 247:

“However, we do not wish to go into the question as to whether the object with which demonetization was effected is served or not or as to whether it has resulted in huge direct and indirect benefits or not. We do not possess the expertise to go into that question and it is best that it should remain in the domain of the experts.” 

The government giving a political twist to the ruling betrays anxiety about the desirability of the demonetisation exercise in 2016.

The courts routinely refuse to interfere in matters of policy. Making or evaluating policy is beyond the remit of the courts and, as said by the Supreme Court about demonetisation itself, beyond the expertise of the judges. The judges are experts in law and carry out judicial review of administrative actions. They test actions for compliance with the constitution and applicable laws.

To put it simply, a policy may be constitutional but bad, even undesirable. But it is not for the court to substitute its opinion for that of the policy-making body. The demonetisation judgement followed a US Supreme Court judgment (Metropolis Theater Company et al, Plffs. In Err., v. City of Chicago and Ernest J. Magerstadt) which stated:

“…To be able to find fault with a law is not to demonstrate its invalidity. It may seem unjust and oppressive, yet be free from judicial interference. The problems of government are practical ones and may justify, if they do not require, rough accommodations — illogical, it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible; the wisdom of any choice may be disputed or condemned. Mere errors of government are not subject to our judicial review.”

Also read: ‘Tughlaqi Decision’: Opposition Says SC Order Doesn’t Erase ‘Disastrous’ Demonetisation Impact

Demonetisation was a legal, political and economic choice. It has to be contested on all three grounds.

With the judgment, the Supreme Court by a majority has only observed that the policy was legal. Whether it achieved its aims, or even if it could have, is beyond the purview of the court. The court looks at the nexus between the decision taken and the objective to be achieved. It does not, and cannot, give its imprimatur to the desirability of the government’s actions and decisions.

Again, to point this out from the demonetisation judgment,

“We are, therefore, of the considered view that the Court must defer to legislative judgement in matters relating to social and economic policies and must not interfere unless the exercise of executive power appears to be palpably arbitrary. The Court does not have necessary competence and expertise to adjudicate upon such economic issues… As already discussed hereinabove, on one hand, the petitioners urged that there has been an adverse effect upon the economy and on the other hand, the learned Attorney General had given a long list of direct and indirect advantages of demonetization. In any case, mere errors of judgement by the government seen in retrospect is not subject to judicial review”

The political aspect of demonetisation was the suffering of so many people. The economic aspect relates to its impact on the economy, whether positive or adverse. Neither of these issues has been closed by the Supreme Court.

All that the Supreme Court has said is that demonetisation was legal.

For the government and the ruling party to now claim that the judgment shows the opponents of demonetisation to be wrong is farcical. It is the duty of the opposition to point out the ill effects of a bad policy. It ought to be the government’s duty to counter them on facts. The government and the ruling party are shying away from that debate and trying to put the onus on the Supreme Court to justify the policy.

The ‘politicisation’ of the judgement of the Supreme Court is disturbing and the ruling party is to blame for it. The opposition should continue to point out the continuing ill-effects of demonetisation. That is the only way to avoid such ill-intentioned policies which, although legal, are neither desirable nor beneficial for citizens.

Sarim Naved is a lawyer practising in Delhi.

This piece was first published on The India Cable – a premium newsletter from The Wire & Galileo Ideas – and has been republished here. To subscribe to The India Cable, click here.

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