BINOD KUMAR Vs. CURRENCY OFFICER RESERVE BANK OF INDIA

JUDGEMENT

(1.) The prayer in this application is to quash the order dated 31-8-1970 passed by the Currency Officer of the Reserve Bank of India rejecting the petitioners' claim under Ss. 7 and 8, High Denomination Bank Notes (Demonetisation) Act, 1978 (in short 'the Act') - vide Annexure-1, and the order dated 31-12-1979 passed in appeal by the Additional Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division) affirming the same and rejecting the appeal of the petitioners - vide Annexure-2.

(2.) Shortly stated, the facts giving rise to this application are that the petitioners is a Firm which carries on wholesale business in foodgrains, etc. It is said that in course of business and trade, the petitioners send agents to different parts of the country. These agents carry substantial amount with them to make local purchases of commodities in which the petitioners carry on trade. It is said that as usual, the petitioners had sent their two representatives, namely, Rajendra Prasad with an advance of Rs.28,151/-on 11-1-1978 and a further sum of Rs.23,000/- on 12-1-1978 to Pilibhit and Binod Kumar with an advance of Rs.51051/- on 13-1-1978 to Bhopal. While the two representatives of the petitioners were away to Pilibhit and Bhopal, the President of India promulgated an Ordinance called the High Denomination Bank Notes (Demonetisation) Ordinance, 1978. Under Cl.(2) of S.7 of the Ordinance it was provided that persons having high denomination notes should file a declaration in the prescribed form and deliver in person the High denomination notes not later than 19th day of January, 1978 to the office of the Reserve Bank at the specified places or the Branches of the State Bank of India at the headquarters of any district or any other offices of public sector Bank notified in this behalf by the Reserve Bank. S.8 of the Ordinance provided that if any person, who could not file the declaration and deposit the high denomination notes within the time granted by S.7, then he could file the declaration in the prescribed form and the high denomination bank notes together with a statement explaining the reason for failure to apply within the time limit prescribed under S.7. This, according to S.8, could be done not later than 24th day of January, 1978. According to sub-sec.(2) of S.8, the Reserve Bank could make an enquiry as to whether there was a genuine reason for not filing the declaration and the high denomination bank notes within the time prescribed under S.7 and in case it was of the view that there was a genuine reason then the Reserve Bank will pay the value of the notes in the manner specified in sub-sec.(4) of that section. In case, however, the Reserve Bank was of the view that there was no genuine reason for not making the declaration and tendering the high denomination bank notes within the time granted by S.7 then the person aggrieved by this order could prefer an appeal to the Central Government within 14 days from the communication of such order. The aforesaid Ordinance was replaced by the Act which received the assent of the President on 13-3-1978 and was enforced retrospectively with effect from 16-1-1978.

(3.) When the two representatives of the petitioners became aware of the Ordinance, they tried to contact the petitioners on phone from their respective places, but unfortunately telecommunication could not be established. They, therefore, wrote letters to the petitioners on 16th, 17th, 18th and 19th January, 1978. The petitioners could telephonically contact the two agents at different places and asked them to come back with the notes so that the same might be tendered with the declaration as required under the aforesaid provisions of law. It is said that these agents came to Begusarai, the place of business of the petitioners firm on 23-1-1978 and on 24-1-1978, the notes with necessary declaration under S. 8 of the Act were tendered. The petitioners say that although they had fully explained the reason as to why the tender could not be made within the time allowed under S. 7 of the Act, yet they gave further clarification in reply to the Bank letters dated 8th May, 1978, 4th October, 1978, 13th October, 1978 and 29th January, 1979. But, it is said, the Currency Officer without appreciating the fact in correct perspective held that the petitioners had failed to show that there was genuine reason in not filing the declaration and tendering the high denomination notes within the time allowed under S.7 of the Act. The order, therefore, that the notes should be retained in terms of sub-r.(2), R.4 of the Rules was bad. The petitioners, therefore, filed an appeal against the said order and placed the entire matter before the appellate authority. The appellate authority after considering the materials agreed with the Currency Officer and rejected the appeal - Vide order as contained in Annexure-2.