Businessman with rupees 1.17 crore in old notes moves SC

The Supreme Court on Friday sought response from RBI as to why a Madurai-based businessman, stuck with Rs 1.17 crore in scrapped notes, should not be allowed to deposit the demonetised notes in his bank after almost three years of the note ban.

A bench led by Justice NV Ramana issued notice to RBI and the Union government on a petition by textile trader K Raman (owner of Ajai Exim) for booking him under the Negotiable Instruments Act for trying to remit Rs 1.17 crore to his vendors on December 30, 2016, (the last day for depositing old Rs 500 and Rs 1,000 notes). He has sought a direction to be issued to RBI and the Union government to allow him to deposit the money in any of his bank accounts.

Prime Minister Narendra Modi had on November 8, 2016, announced the sudden decision to scrap Rs 1,000 and Rs 500 currency notes in a televised address to the nation and this had lead to a severe shortage of cash. While the demonetisation move had led to a slew of cases being filed in courts across the country, the cases were eventually transferred to the Supreme Court.

When Rs 500 and Rs 1000 notes were demonetised, a window was provided till December 30, 2016, to deposit demonetised notes. On December 30, 2016, the businessman had approached the Tamilnadu Mercantile Bank in Tirupur, the state’s fifth largest urban centre, to deposit Rs 1.17 crore of the banned currency, but bank officials had declined to accept the payment.

The businessman submitted that he had written to various authorities for accepting his deposit. Finally, he got a response from the RBI last month. The banking regulator had refused to allow him to deposit the demonetised notes.

Stating that he cannot be denied his legitimate claims due to any administrative lapse, the businessman claimed that the money belonged to other establishments — SJLT Textiles (Namakkal), Sri Harikrishna Cotton Mills (Tirupur), Sri Nachammai Cotton Mills (Salem) — in favour of whom he had issued post-dated cheques. He argued that the cash that he wanted to deposit was not from his profits, but to honour cheques that he had issued. He said many cases had been filed against him after cheques bounced due to insufficient funds in 2017.