Demonetisation: Can RBI write off notes it promised to honour?

• 'I promise to pay the bearer of this note...' vows the RBI governor on every Indian currency note. Every currency note is a contract between the bearer and the state, something that has been signed in good faith and ratified by the extant law of the land.
• Can the contract be repudiated unilaterally by the state? 
• Can the bearer of the note be shooed away when he demands its execution even when there is no expiry date or conditions on the contract?
• Is the citizen-sovereign contract at the mercy of to executive's fiat taken without consulting the legislature?
• Supreme Court came down hard on the government and refused to entertain its request to put on hold petitions pending in various high courts challenging the decision to scrap Rs 500 and Rs 1,000 bank notes. 
• The apex court is right. A decision that affects every Indian's life without going through the necessary legislative process, debate, deliberation and vote - ought to be seriously examined. The other two pillars of a democracy, the legislature and the judiciary must be given an opportunity to scrutinize an executive decision with huge ramifications.
• The government has not used the word demonetization. All that the government has said is that it is withdrawing these notes as being legal tender. But it still leaves us with the question: does the RBI have the obligation to pay the bearer, or is that obligation over, after the government announcement?
• The press release issued by the government talks only about ‘cancelling the legal tender character’ of the high denomination notes, raising questions about whether they are drawing a fine distinction between delegalisation and demonetization.
• Can the state end its contract with citizens ex-parte?
• On what legal grounds can the RBI write off notes it had promised to honour? Can banks just throw out people who go with these notes to banks after the deadline set by the government?
• It has been sold as a panacea for black money, corruption, counterfeit currency, Naxalism and cross-border terrorism. We have been told that Kashmir will become quiet now becomes the youth there have no money to buy stones to throw at security forces.
• Not much has been put out in the public domain by figure of data and hard numbers. Most of the answers have come in the form of high-decibel rhetoric and through speeches where the Prime Minister has displayed an entire range of emotions. But, somebody needs to separate the rhetoric from facts.
• The government can, of course, ignore the Court's warning of there being a possibility of riots if things do not improve, the suffering of people is not mitigated and money is not pumped back into circulation. The queues are getting longer, people are dying outside banks and ATMs. In the rural areas, away from the echo chambers of TV studios and social media, there is panic and anarchy.
• The court has given the government a warning, a wakeup call. It can, of course, continue to remain in denial and commit suicide.

-------- The above was during Nov & Dec 2016 - Demonetization months -------

• On July 4, 2017, The Supreme Court asked the Reserve Bank of India (RBI) on Tuesday to come up with a policy to offer a window to people who could not deposit their demonetized notes for legitimate reasons before last year’s December 30 deadline.
• If someone has a genuine reason, you cannot deny him the opportunity to deposit the money. You cannot be allowed to deprive a person of his money - a bench headed by Chief Justice JS Khehar told solicitor general Ranjit Kumar. 
• Don’t force us to pass a three-line order and quash your notification, SC warned.
• You cannot take away someone’s property. If it’s my money and I can establish that, then you cannot deprive me of my property - Khehar said.
• RBI officials put the responsibility on the government to take a call on offering another window for depositing defunct notes.
• On July 17, 2017, The Centre informed the Supreme Court that it will not offer any more chances to deposit or exchange demonetized notes to those who missed the December 30 deadline. The government asserted that granting any further grace period for depositing banned currency notes will defeat the purpose of demonetization, which was done as an exercise in eliminating black money.
• The very object of demonetization and elimination of black money will be defeated if a window is opened for a further period as the persons in possession of the specified bank notes (scrapped notes of Rs 1,000 and Rs 500) will have had sufficient time and opportunity to carefully plan the reasons and excuses for not depositing the SBNs within the permitted period -- before December 30, 2016, the Ministry of Finance said in an affidavit presented in the Supreme Court earlier in the day.
• The government had earlier assured the people that if people were unable to deposit demonetized currency notes by that day i.e. Dec 30, 2016, they could do so till March 31, 2017 at RBI branches after complying with certain formalities. This was not permitted without citing any reasons.

Any policy, that troubles even a single honest law abiding citizen, is a bad policy.

My View:

How Modi & Co will catch black money etc is their business. Asking honest & genuine citizens to suffer, forego their legitimate rights and lose their hard earned money is unacceptable nonsense. Regrettably, Modi is neither a  wise leader nor a statesman. He is just a third rated leader gifted with rhetoric capabilities and honest & good people, poor & peasants are destined to suffer in Modi's India. To what extent Legislature and Judiciary uphold citizen rights is to be seen. Not much of hope, unless people take their fight for rights into streets, like farmers of MP and Maharashtra.