Can't block cash complaints: SC

New Delhi: The Supreme Court on Friday rejected the Centre's plea to stay the petitions filed in high courts against demonetisation, saying such complaints help gauge the magnitude of a problem and that shutting people out of legal avenues "may lead to riots".

The court asked the government why it had abruptly decided to lower the ceiling on the exchange of old notes to Rs 2,000 after raising it to Rs 4,500 from Rs 4,000.

"People have a right to go to the high courts. If we shut them from going to the high courts, how can we know the magnitude of the problem? It may lead to riots," the bench of Chief Justice T.S. Thakur and Justice A.R. Dave told attorney-general Mukul Rohatgi.

On Tuesday, the apex court had said it would not interfere with the demonetisation decision itself as "these are economic policies of the government, which may have a larger objective".

However, the court had then said the government should look into ways "to mitigate the sufferings of common man" - the focus of the bench's attention on Friday.

The Supreme Court's observations today coincided with a statement by the chief justice of Calcutta High Court that "it seems the government did not have proper planning" before announcing the demonetisation decision and "common people are completely confused". 

In the Supreme Court, referring to the situation after the recall of Rs 500 and Rs 1,000 notes, the bench said: "The people are going to different high courts because they are having problems. Some measures are required. See the kind of problems people are facing.

"This is a matter in which people are affected. People are frantic. He (Kapil Sibal, the lawyer representing a petitioner) may be right. People have the right to approach the courts, you can't dispute the fact that people are facing the problems."

The Chief Justice added: "Papers are also carrying reports of people's problems. If people are going to different courts, it only indicates the magnitude of the problems being faced by them."

Rohatgi responded: "I am not disputing (that the people are facing problems)."

Referring to the new cash exchange limit, the Chief Justice said: "Mr Attorney, last time you said there will be relief measures for people in the next few days. But we have noticed that you have actually squeezed the exchange limit to Rs 2,000. You had actually promised to increase it to Rs 4,500 from Rs 4,000."

Justice Thakur asked: "What is the difficulty? We don't understand. Is it that you are not able to print (new currency)?

Rohatgi said printing was not a problem but the printed notes had to be transported to various banks, ATMs and post offices across the country. Around 2 lakh ATMs have to be recalibrated, he said, for dispensing the new notes.

"What about 100-rupee notes? Is it not possible to get the smaller denomination?" Justice Dave asked.

Rohatgi said the "problem would be overcome in a few days".

The attorney-general listed the steps announced yesterday, including a decision to let select petrol pumps issue Rs 2,000 against swiped debit cards, to address the liquidity crunch.

Justice Thakur asked: "Is there any difficulty in 100-rupee notes? Is there a shortage? Hundred-rupee notes you still have not demonetised."

Rohatgi said that instead of dispensing 20 hundred-rupee notes for each swipe, the government wanted people to have a Rs 2,000 note at one go.

Senior counsel Kapil Sibal, however, contended that the government did not have the capacity to print sufficient notes.

"They don't have the printing capacity. They have no replacements. That is why they have reduced the withdrawal limit from Rs 4,500 to Rs 2,000," he argued.

Rohatgi pointed out that the reduction was on the exchange limit and not on withdrawal. (The finance ministry had said yesterday it had lowered the exchange limit because of repeat conversions and attempts by organised groups to turn black money into white.)

Sibal asked: "Under what law does the RBI have the power to prevent me from withdrawing my money? They can give me Rs 100, Rs 500 or Rs 2,000 notes. How can they say 'I can't give you?' It is my legal money."

The situation is very serious as labourers are not getting wages and people in the rural areas are the worst affected, Sibal said.

He said that although urban areas had around 1.68 lakh bank branches, the rural areas had only 37,000. In places like Bastar in Chhattisgarh, people have to walk 20km to reach an ATM, Sibal said.

Rohatgi, however, told the court that Sibal was trying to "politicise" the issue. Sibal dared him to prove the allegations, to which the attorney-general said the former minister's media conferences clearly indicated that the allegations against the government were politically motivated.

Sibal said his media conferences outside had nothing to do with the court proceedings.

The court adjourned the case till November 25, when it would consider the possibility of transferring the petitions filed in the various high courts to Delhi High Court. But the apex court declined to stay the proceedings in the high courts.