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W.P. (C) No. 18107 of 2017

Dhanakodi Chits Private Limited v. Union of India

2017 SCC OnLine Ker 24606

In the High Court of Kerala at Ernakulam

(BEFORE P.B. SURESH KUMAR, J.)

Dhanakodi Chits Private Limited, Head Office at Gandhi Junction,

Sulthan Bathery, Wayanad, Rep. by its Managing Director M.M.
Yohannan .…. Petitioner(s)
By Advs. Sri. Tony Thomas (Inchiparambil)
Sri. P. Thomas Geeverghese
v.
1. Union of India, Rep. by its Secretary to the Government,
Finance Ministry, Parliament Annex, New Delhi-110 001.
2. Reserve Bank of India, Rep. by Secretary & Chief General
Manager, Central Office Building, Shahid Bhagat Singh Marg,
Mumbai-400 001.
3. State of Kerala, Rep. by the Secretaryto the Government, Home
Department, Secretariat, Thiruvananthapuram-695 001.
4. State Police Chief, Kerala State, Police Head Quarters,
Thiruvananthapuram-695 001.
5. Sub Divisional Magistrate, Kozhikode-673 001.
6. Superintendent of Police (Kozhikode Rural), Kozhikode-673 001.
7. Sub Inspector of Police, Koilandy Police Station, Koilandy,
Kozhikode District-673 305 .…. Respondent(s)
R1 by by Adv. Sri. N. Nagaresh, Assistant Solicitor General
Adv. Sri. Suvin R. Menon, CGC
R3 to R7 by Government Pleader Sri. K.J. Manuraj
W.P. (C) No. 18107 of 2017
Decided on July 12, 2017
The Judgment of the Court was delivered by
P.B. SURESH KUMAR, J.:— On information from reliable sources that monetary
transactions are being undertaken by M/s. Dhanakodi Chits Private Limited, Koilandi
with their customers using demonetized currency notes of 1000 and 500 rupee
denominations, Koilandy Police seized 169 numbers of 1000 rupee and 30 numbers of
500 rupee demonetized currencies from the said company. The petitioner is the
Managing Director of the said company. The petitioner moved the Court of Sub
Divisional Magistrate, Kozhikode for release of the seized demonetized currencies. The
Sub Divisional Magistrate found that the currencies seized by the police are currencies
retained by the petitioner on 07.11.2016 for disbursement to the prized subscribers of
the chitties run by them and consequently directed to release the same to the
petitioner. Ext.P4 is the order issued by the Sub Divisional Magistrate in this
connection. Ext.P5 is the document issued by the Sub Divisional Magistrate to the
petitioner authenticating the serial numbers of the demonetized currencies released to
the petitioner as per Ext.P4 order. Ext.P4 order was passed on 22.03.2017. In the
meanwhile, the time limit prescribed for exchanging the demonetized currencies was
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over. The petitioner, therefore, approached this Court for appropriate directions to
enable them to exchange the demonetized currencies released to them as per Ext.P4
order of the Sub Divisional Magistrate.
2. Heard the learned counsel for the petitioner as also the learned Central
Government Counsel.
3. The learned Central Government Counsel submitted that the demonetized
currencies released to the petitioner as per Ext.P4 order can be exchanged by the
designated offices of the Reserve Bank of India only on satisfying the conditions
stipulated in Rule 2 of the Specified Bank Notes (Deposit of Confiscated Notes) Rules,
2017 framed under sub-section (1) of Section 11 of the Specified Bank Notes
(Cessation of Liabilities) Act, 2017. According to the learned Central Government
Counsel, as per Rule 2 of the Rules referred to above, exchange can be claimed in
respect of the demonetized currencies ordered to be released by courts, only where
the order reflects the serial numbers of the demonetized currencies. According to the
learned Central Government Counsel, Ext.P4 order does not reflect the serial numbers
of the demonetized currencies directed to be released to the petitioner and therefore,
the petitioner is not entitled to exchange the currencies released to them as per Ext.P4
order.
4. Rule 2 of the Specified Bank Notes (Deposit of Confiscated Notes) Rules, 2017
reads thus:
“2. Deposit of confiscated specified bank notes.- Where specified bank notes
have been confiscated or seized by a law enforcement agencies or produced before
a court on or before the 30th day of December 2016, such specified bank notes may
be tendered, at any office of the Reserve Bank specified under sub-section (1) of
section 4 of the Act or a nationalised bank designated by the Reserve Bank for the
said purpose, for deposit in a bank account or exchange of the value thereof with
legal tender, subject to the following conditions, namely:—
(a) in case confiscated specified bank notes are returned by the court to a person
who is a party in case pending before that court, then, the person shall be
entitled, on production of the direction of the court, to deposit or exchange
such specified bank notes, the serial numbers of which-
(i) have been noted by the law enforcement agency which confiscated or
produced them before the court; and
(ii) are mentioned in the direction of the court;
(b) in case specified bank notes are forfeited in favour of the Central Government
or the State Government by an order of the court, then, that Government shall
be entitled, on production of the direction of the court, to deposit or exchange
such specified bank notes; or
(c) in case specified bank notes are placed in custody of any other person by an
order of the court on or before the 30th day of December, 2016, then, the
person shall be entitled, on production of the direction of the court, to deposit
or exchange such specified bank notes, the serial numbers of which-
(i) have been noted by the law enforcement agency which confiscated or
produced them before the court; and
(ii) are mentioned in the direction of the court.”
5. It is seen that it is relying on clause (a)(ii) of Rule 2 of the Rules that the learned
Central Government Counsel has made the submission referred to above. True, Ext.P4
order passed by the Sub Divisional Magistrate does not contain the serial numbers of
the demonetized currencies directed to be released to the petitioner. Ext.P5 is a
separate document issued by the Sub Divisional Magistrate to the petitioner indicating
the serial numbers of the demonetized currencies directed to be released. According to
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me, Ext.P5 satisfies the requirement of Rule 2 of the Rules referred to above.
6. In the result, the writ petition is disposed of directing the Thiruvananthapuram
branch of the Reserve Bank of India to accept the demonetized currencies released to
the petitioner covered by Ext.P4 order, the serial numbers of which are mentioned in
Ext.P5 and exchange the value thereof, within one month from the date of production
of the demonetized currencies before the Thiruvananthapuram branch of the Reserve
Bank of India.
———
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