THE WITNESS STAND - LITIGATION CAPSULE #1

The Ahlmad and Naib Court – Unsung Heroes of our Judicial System

If you have interned in the Courts at New Delhi, you would have invariably heard about these persons, but not many people know about their roles in the system. Today’s post is about the Ahlmad and the Naib Court, two of the most important posts in the Indian judicial system, without whom the Court system would crumble and fall apart.

No judge can work in isolation, and there is usually a group of people who help him with respect to his paper work and other details. These people are called readers, stenographers, clerks, typists etc. The job description and duties vary from state to state, and can sometimes overlap as well. The title Ahlmad is used to refer to an assistant of the Court. It is predominantly used in the Courts of New Delhi, Punjab and Haryana.  In Delhi, the Ahlmad’s room is located right next to each Courtroom. It is denoted with the letter A. For example, if the Courtroom is numbered at 23, the Ahlmad’s room would customarily be called “23-A”.

The Ahlmad has all the information and details about not just individual cases, but also about how the Court system as a whole functions and he can be of immense help. His duties broadly fall under the category of an“Office Assistant. Every morning, it is the Ahlmad who prepares the cause list for the day, coordinates with the stenographer/reader, and ensures that all the daily Orders have been printed and signed by the Hon’ble Judge. His job also includes liaising with the other Court rooms to check if the Judge requires any further information from a different Courtroom. (This can happen when matters are transferred from one Judge’s Courtroom to another.) Besides being a public information officer, he is also responsible for making proper entries about each case, including noting down the Goshwara numbers in the proper Court Registers.

What is a Goshwara number?

Goshwara is an Urdu word which whentranslated in English denotes a‘secluded place’. In the legal world, it refers to a room where the decided/dismissed/disposed of case files sit. As soon as a final Order/Judgement has been passed in a case, it is assigned a Goshwara number and the concerned Court file is transferred to the Goshwara room.

Now coming back to the Ahlmad, his duties vary from State to State. You can see an example here. 

Needless to say, the Ahlmad performs extremely essential functions in the judicial system. We seldom see or hear of them despite their importance. The next time you walk past an Ahlmad’s room, you will realise that the person working there is an irreplaceable piece of the Indian judicial system.

Another Court officer who seems to be hustling in and out of criminal courtrooms is the Naib Court. He is a police officer who is in-charge of a designated Police Station and is appointed for a specific Court Room. This Court officer will have any/all details pertaining to the First Information Report (“FIR”) concerned and will also know about the status of the cases if you give him/her the particulars such as the FIR number, etc. 

How does the criminal court system work in Delhi?

The criminal Courtrooms are each assigned a police station or two. In other words, the Courtrooms on the criminal side of the Delhi High Court or the District Courts are divided according to territorial jurisdiction. For example, FIRs lodged at Mehrauli Police Station would be assigned to one Courtroom at Saket Courts while FIRs lodged in Vasant Vihar perhaps, would be assigned to Courtrooms in the Patiala House Courts. The Judges assigned to each of these Courtrooms will handle all the criminal matters that arise from these districts.

In short, if you have just started working at the Criminal Courts and do not know who to approach and want to find out more about a case you have just been assigned, approach the Naib Court of the concerned Police Station where your FIR has been lodged and ask them about the FIR/case concerned. You will invariably get your answer. 

Executive Order 2.0 

Comes With More Features but it is Still the Same Device At Heart 

Part One 

President Trump learnt it the hard way that his actions will be reviewable by the judiciary. Since his first immigration ban had a troubled implementation owing to little or no information from the Government to the airport and immigration authorities, thousands of immigrants were stranded at airports and some of them were not permitted to leave their home countries.  The fanfare surrounding the first order was conspicuously absent in the second. The President did not sign this order  amidst cameras clicking in the White House. It was signed in private and he sent three of his aides - Secretary of State Rex Tillerson, Department of Homeland Security (DHS) Secretary John Kelly, and Attorney General Jeff Sessions to address a limited pool of reporters and categorically refused to answer questions after presenting it. The new executive order that the Trump administration has passed on March 6, 2017 seems to have a more practical implementation policy and a more subdued immigration policy that seems restrictive and narrow when you view it for the first time, however, the more you examine it, the more you realize that it is a more polished version of the first order that is the same in substance – to restrict Muslims from entering USA.

https://static.independent.co.uk

However, the question we  are asking at The Witness Stand is – Can Trump’s second executive order stand the test of the judiciary?

The media seems to think so, with some articles calling it ‘court proof’.  So let us analyze Trump’s second Executive Order (Executive Order 2.0) in light of the United States Court of Appeals Ninth District Court’s Judgment.

Let us tell you why the Trump government came up with the Executive Order 2.0.

1. On 9 February 2017, the State of Washington filed a suit in the United States District Court for the Western District of Washington challenging certain aspects of the Executive Order. The State of Minnesota also joined the suit against the Government. The judge of the district court issued a Temporary Restraining Order against the Executive Order, thus freezing it.

The Government then moved to the Federal Court praying for freezing the ban on Muslims, thus effectively ensuring the ban does not have effect. Here is a brief history of the first order:

2. On January 27, 2017, the President issued Executive Order 13769[2], “Protecting the Nation From Foreign Terrorist Entry Into the United States”.

     3. It is important to remember that while a direct ban on religion is forbidden, a ban on allowing people from certain countries to enter is not forbidden, and this is exactly what the Trump administration did.  Citing the terrorist attacks of September 11, 2001, and stating that “numerous foreign-born individuals have been convicted or implicated in terrorism related crimes” since 2001, the Executive Order declares that “the United States must ensure that those admitted to this country do not bear hostile attitudes toward it and its founding principles.”

    4.  The executive order prevented people from the following countries to enter the USA for a period of 90 days- Iraq, Iran, Libya, Somalia, Sudan, Syria, and Yemen. It then suspended the USA Refugee Admission Program for a period of 120 days. The executive order indefinitely suspended the entry of all refugees from Syria (the 120 days time period was not applicable to them). In all these cases, Secretaries of State and Homeland Security could make case by case exceptions when it would be in the national interest and when the person is a religious minority in his country of nationality facing religious persecution.

     5. This order caused wide spread confusion and airports were filled with people who had just arrived from these nations, who were denied the right of entry or detained in the airports. Thousands of visas were cancelled and hundreds of passengers were stranded.

     6. The two states of Washington and Minnesota moved to a lower district court to set aside this order on the grounds that it is unconstitutional and violated American federal law.

     Arguments 

    The States alleged that the Executive Order unconstitutionally and illegally stranded its residents abroad, split their families, restricted their travel, and damaged the States’ economy and public universities in violation of the First and Fifth Amendment, the Immigration and Nationality Act, the Foreign Affairs Reform and Restructuring Act, the Religious Freedom Restoration Act, and the Administrative Procedure Act. They also alleged that the Executive Order was not truly meant to protect against terror attacks by foreign nationals but rather was intended to enact a “Muslim ban” as the President had stated during his presidential campaign that he would do, if elected.

     Court's Decision 

·         The district court held that the move was unconstitutional and banned the Executive Order from having effect in the form of a temporary restraining order (“TRO”).

·         The United States Government immediately moved to the United States Court of Appeals for the Ninth circuit (The Federal Court) for a stay of the lower court’s order.

The Federal Court refused to stay the temporary restraining order as they believed that the district court’s decision was valid and that the ban was unconstitutional and violated American federal law.

Image Credits - http://c3.nrostatic.com

So, the Trump administration has come up with Executive Order 2.0 because they understand that fighting this battle in court will be time intensive and their victory cannot be assured. There are a few differences[3] between the two Orders and some experts feel that Executive Order 2.0 is a better drafted effort as one of the grounds on which the first Executive Order had been stayed was the lack of a due process clause; though the substance of the Executive Order 2.0 seems to restrict Muslims from entering the USA. [4] Donald Trump has not been subtle with his intentions right from his campaign and he is carrying them out as the President now. Further, Executive Order 2.0 exempts the nation of Iraq from the list as many Iraqis had assisted the United States Government in the war against terror, acting as translators and aiding the USA military and could not go back to their home country where they may be viewed as traitors and killed by the local militia. The ban on Iraqis was heavily cited by opponents of the first ban as a measure of how heartless and cruel the first executive order was, and in order to placate the public, Executive Order 2.0 has removed Iraq from the list.

Imagre Credits - twitter.com

We at the Witness Stand examine three controversial aspects of the ban and compare it to the provisions in the first Order that the American Courts over-ruled.  

1.       Judiciary vs. Executive

On March 6  2017, Mr. Trump via Executive Order 2.0 clarified in Section 1 (i) of the Executive Order[6]  that “in light of the Ninth Circuit's observation that the political branches are better suited to determine the appropriate scope of any suspensions than are the courts, and in order to avoid spending additional time pursuing litigation, I am revoking Executive Order 13769 and replacing it with this order, which expressly excludes from the suspensions categories of aliens that have prompted judicial concerns and which clarifies or refines the approach to certain other issues or categories of affected aliens.”[5]

Some things to remember – The Ninth Circuit happens to be the Federal Court the Government appealed to after the District Court issued a Temporary Restraining Order against the first Executive order.

One of the most controversial arguments raised by the Government in this case was that the President’s powers to pass any kind of Executive Order to suspend the admission of any class of aliens was judicially un-reviewable. The Court however, promptly shot this down.

A Brief Analysis of the Ninth Circuit Court’s Ruling with Respect to the Un-reviewability Claims

The Government argued that if the Court was to rule on any Presidential Executive Order, it would be a flagrant violation of the separation of powers principle. The Court was rather shocked by this argument and remarked that there was no precedent to support this claim of alleged un-reviewability, and that it ran contrary to the fundamental structure of the American constitutional democracy.[7]

In fact, the Court went a step further and gave the example of the landmark judgment in American constitutional law and international human rights law - Boumediene v. Bush[8], wherein the Congress had passed a statute that removed the right of habeas corpus for aliens who could be potential terrorists. In that case, it was categorically held that the ‘political branches’ lacked ‘the power to switch the Constitution on or off at will'’. On that note, the Court rejected the Government's extraordinary argument and stated that ‘while American jurisprudence has long counseled deference to the political branches on matters of immigration and national security, neither the Supreme Court nor the Federal Court has ever held that courts lack the authority to review executive action in the arena of immigration for compliance with the Constitution.’[9]

The Government then cited another case law - Kleindienst v. Mandel[10] (“The Mandel case”) where the Court had held that when the Executive exercises immigration authority ‘on the basis of a facially legitimate and bona fide reason’, the courts will not examine the reason behind the exercise of that executive discretion. The Government wanted to use this case to prove that the Court did not have jurisdiction to adjudicate on a Presidential Executive Order with respect to immigration because the authority had been exercised by the Government on a facially legitimate reason. 

However, the Court did not accept this as the Government had omitted certain important passages from the case and focused only on the above extract. The Court went on to elucidate that the Mandel case dealt with an individual’s visa application based on an existing statutory law and distinguished it from the instant case which is about the President’s promulgation of sweeping immigration policy.

While dealing with the question of separation of powers, the ratio was that although Courts owe considerable deference to the President’s policy determinations with respect to immigration and national security, it is beyond question that the federal judiciary retains the authority to adjudicate constitutional challenges to executive action.[11]

Back to the Executive Order 2.o

Mr. Trump has indeed used the Court’s observation that political branches are in a better place to determine the scope of a travel ban to his advantage. While the Court did make that statement, it should not be read and interpreted in the absence of its views concerning the reviewability of the Presidential Executive Order.  

While the Trump Government has understandably elaborated more about the threats posed by the six countries in the Executive Order 2.0, these threats must be legitimate. The Federal Court cited the case of United States v. Robel [12] wherein it was held that – “National defense cannot be deemed an end in itself, justifying any exercise of legislative power designed to promote such a goal. It would indeed be ironic if, in the name of national defense, we would sanction the subversion of one of those liberties which makes the defense of the Nation worthwhile.”

So, the Trump government better be aware that even the Executive Order 2.0 can be subject to judicial review. The next aspect that needs to be examined is whether the Executive Order 2.0 covers the lacuna present in the first. Watch out for that and much more at The Witness Stand!

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[1] https://www.whitehouse.gov/the-press-office/2017/03/06/executive-order-protecting-nation-foreign-terrorist-entry-united-states

[2] Executive Order, 82 Fed. Reg. 8,977

[3] https://www.bloomberg.com/politics/articles/2017-03-06/trump-revises-travel-ban-to-address-legal-issues-exempt-iraqis

[4] http://aclum.org/wp-content/uploads/2017/03/2017_1_27-Muslim-Ban-EO-Word-VS.-2017_3_06-Muslim-Ban-EO.pdf

[5] http://www.usatoday.com/story/news/politics/2017/03/06/trumps-executive-order-takes-unusual-pains-explain-itself/98811920/

[6] https://www.whitehouse.gov/the-press-office/2017/03/06/executive-order-protecting-nation-foreign-terrorist-entry-united-states

[7] Pg. 14 of the Judgment

[8] Boumediene v. Bush, 553 U.S. 723, 765 (2008)

[9]  Pg. 14 of the Judgment

[10] 408 U.S. 753 (1972)

[11] Pg. 14

[12] 389 U.S. 258, 264 (1967) 

One Indian Lawyer - Part One

Hello everybody. The next few posts will be about how a lawyer deals with complex criminal matters such as rape, right from the beginning when the victim walks into the lawyer's Chamber.

However, what is different about these posts is that they will be in the form of a story. 

Meet A, a lawyer working in the District Courts in Saket, New Delhi. A woman walks into her Chamber one day and tells A that she has been raped. Follow A's journey as she navigates through the corridors of the District Court and read about how a criminal trial progresses in the real world. 

Warning - The post contains explicit content and references to sexual assault/ abuse/ rape. It may act as a trigger so please proceed reading with caution and at your own risk. 

Image Credits - http://images.mapsofindia.com/my-india/2014/12/rape-laws-in-india.jpg

It started off as any ordinary day would in A’s office. She woke up early, cooked food for her son and herself, sent him to school and left for work. As she pulled out her white kurta, she realized the maid had washed it with the blue bed sheets and instead of white, it was a pale blue. She made a mental note to yell at the maid that weekend and pulled out a shirt instead, hurriedly proceeding with the rest of the chores before she hired an auto to the Saket District Court premises. 

She exchanged pleasantries with several other lawyers before she finally made her way to her Chamber on the fourth floor, and by the time she had settled inside and gone through the files for that day, it was almost 9:55 am. She left the Chamber and hurried towards the Court. She could feel prying eyes glaring at her as she walked up to the Courtroom, but as she had done for the past five years, she ignored that feeling of being stared at and instead focused on her day ahead. 

She had two matters listed for the day. In one of them, she had to seek instructions from a client who had managed to find time to relentlessly stalk women on the web, yet somehow, he did not have twenty seconds to instruct his advocate about the case. She would seek a date for that and bill his rich father, partly for her effort but mostly for dealing with his son. Her second matter was related to eviction of a tenant who had become particularly attached to the place and also particularly friendly with the local goons. Her client was a thin wiry man who had found no other alternative after months of pleading with the tenant had yielded no result and in the recent few months, no rent as well. It was a summary proceeding and the opposing counsel had filed a leave to defend, but as she was thinking about the possible outcomes of that day while entering the Courtroom, she saw that the Judge was on leave and the Reader was giving out dates for the next hearing. 

Hoping she was just in time, “Akhil v Ram, June 5^th” the Reader called out. 

“Please give me another date in July” she shouted from the back, pushing her way to the front. 

He was frowning, ‘Not in a good mood’, she thought. “It is my son’s summer vacation” she told him in a low voice. He grumbled and then said “July 6^th”. “Thank you!” she told him, visibly relieved. The opposing counsel was nowhere to be seen. 

She walked back to her Chamber in good spirits. 

As she came closer, she noticed a woman standing outside. A few steps away from the door, it became clear that she was waiting for her. 

“Can I help you?” asked A. 

“Yes” the woman whispered. 

A glanced at her outfit, a thin cotton kurta, a little faded but very clean and a shawl which was frayed at the edges, owing to years of wearing it. 

She unlocked the Chamber and showed her inside. The woman sat, clasped her wrists and A waited for her to get comfortable. She had seen these things before, and she was pretty sure what it was.  

The woman hesitated at first, and then said, in a low voice. “I need your help. C’s parents told me you helped their daughter immensely. I was raped.” 

A reached to the drawer and pulled out a legal pad. There was a time for emotion and there was a time to be analytical and precise, while she hoped that this frail woman could answer the sensitive questions that she was about to ask her, given that what she underwent, allegedly underwent, the lawyer corrected the woman in her, is the most traumatic experience any human being could ever go through. 

“When did this happen?” she asked her. 

“One week ago.” 

“When was the FIR filed?” asked A. 

“One day later.” 

 “Do you have all the details of the FIR, such as the lodging no., name of the police station? Actually, any possible information that could help me take out a copy of the FIR”, insisted A.  

The woman quickly pulled out a typed sheet of paper, well adjusted beneath her shawl and handed it over to A. 

A heaved a sigh of relief as she bent forward to take it. It looked like a typed copy of the complaint, barely legible though, as handed over to the woman by the police. A had a cursory glance at it and jotted down all necessary details including the FIR number, concerned police station, specific sections of the IPC that had been invoked etc. 

“Did you undergo a medical examination?” asked A. 

“Yes, the police chaps took me to AIIMS for my MLC. The doctor there examined me and filed his report.” 

A saw her lips quiver. 

“What happened there?” she enquired gently. 

“The doctor asked me to spread my legs and I don’t know what happened next. I had closed my eyes. I felt so ashamed. They then sent me to the bathroom to get them a sample of my urine. I have never been so mortified. They all knew something had happened, and they were all trying to help me, but I didn’t feel like I wanted to go through with it. The police guy (read Investigating Officer) accompanying me told me it was important, and there were a lot of other tests which I must undertake.” 

‘Vaginal swabs and urine cultures’ thought A and made a note of it, so she could check the contents of the charge sheet which was now a part of the court record.  

“What happened next?” enquired A. 

“The police guys then asked me to give them all my clothes which I was wearing when the ra… when it happened. I was going to throw it away in disgust, but luckily, I hadn’t. They were at home and I gave it to them.” 

“What did you give them?” asked A. 

“My blue saree, a yellow blouse and a yellow petticoat, all unwashed.” 

“And?” asked A, trying to keep the impatience from her voice and still trying to be as gentle as possible. 

“A black bra and white panties.” she said in a low voice with her eyes downcast. 

A wrote blue saree, yellow blouse, yellow petticoat, black bra and white panties on the pad, she would have to check the seizure memo and ensure that the police had mentioned all the garments with a detailed description of each in it. 

“The police officer then told me that I had to make a statement before some judge next.” 

“Was there anybody with you through the whole thing?” asked A. 

“No.” said the woman “My family did not want anything to do with me after I married my husband because he belonged to a different caste, and he died a few years back.” 

A saw that this woman was truly alone and a stab of pity went through her, only to be replaced with professional concern about confirming the contents of the Section 164 statement that the police had filed, as an integral part of the charge sheet.  

End of Part One 

Peering out from behind The Witness Stand: 

Advocate Shriya Maini (Content Creator) is a young, bright, scholarly, advocate turned entrepreneur currently practicing at the Supreme Court of India, the Delhi High Court and the district courts at New Delhi.  She specializes in dispute resolution and as an unabashed feminist, particularly enjoys criminal litigation. She is a graduate of Gujarat National Law University, India who then pursued the Bachelor of Civil Laws programme on a full scholarship (Dr. Mrs Ambruti Salve Scholarship) sponsored by Dr. Harish Salve, Senior Advocate from the University of Oxford, specializing in International Crime. As a recipient of the Oxford Global Justice Award 2015 for Public International Law, she assisted the President of the International Residual Mechanism for the Criminal Tribunals (MICT) at The Hague, Netherlands. She is now back in the Courts of Delhi, India to pursue her passion in litigation.

Ms. Chethana Venkataraghavan (Editor) is currently a fifth year law student at Gujarat National Law University. She was part of the team that won Surana and Surana Corporate Law Moot Court Competition, 2013 and the Philip.C.Jessup International Moot Court Competition, India Rounds, 2016. She was adjudged the Best Speaker of the Finals at the Manfred Lachs Space Law Moot Court Competition, Asia Pacific Rounds, 2014. She is passionate about blogging and is currently involved in an initiative – Examofsmile - that aims to reduce levels of stress and depression among law students across the country.   

I got 99 Problems But The 100 Rupee Note Ain't One

While sacks of money are burning in Bareilly in Uttar Pradesh, The Witness Stand is back with its second post where we examine the collective shock of the Prime Minister’s announcement where 500 and 1000 Rupee denomination notes ceased to be legal tender as of 8 November, 2016 at 23:59 PM.

The authors of this post understand that this is a major executive decision and we do not intend to take a political stance or affiliate with any political party through the course of our discussion. We will analytically view this move by examining legal provisions and in the event we discuss the practical implications of this measure, we will analyse arguments from both sides of the (Vote/Reserve) bank.

Image credits - allindiaroundup.com

This is a measure taken by the Central Government and the Reserve Bank of India (“RBI”) for the following reasons according to the Ministry of Finance Notification dated 8 November, 2016:

·   1) To combat the adverse effects on the economy caused by counterfeit notes in the denominations of 500 and 1000, as it has been found to be ‘difficult’ to easily identify genuine bank notes from the fake ones;

·   2) In light of the large recoveries of cash and black money made by the law enforcement agencies, it has been seen that these denominations are commonly used for storing unaccounted wealth;

·   3) It has also been taken as a measure to protect national security, as it has been found that that fake currency in this denomination is being used for financing  activities like drug trafficking and terrorism.

The actual string of events behind this sudden move is not public information yet, but with the help of the media, we are able to piece together bits and pieces of the puzzle. It is rumoured that Pakistan had a mint in Peshawar where only fake Indian currency notes, mostly in 500 and 1000 rupee note denominations were being printed and terrorist organisations as well as international criminal networks were being used to push fake currency into India. Intelligence agencies had also previously claimed that the Pakistan printing machinery had achieved a "zero-error counterfeit capability" in printing fake Indian notes. In light of this influx of black money and threat to our national security, this move has been welcomed and criticized by the people of India who heard about this new policy from the Prime Minister's address to the nation on 8 November, 2016. Let us examine the legal background of this move in detail.

Image credits - Times of India 

What is the Legal Basis for this De-Monetization Measure?

This measure has two wide impacts:

• On the flow of currency in the economy by people trading money for commodities and goods

•  On the ability of people to procure currency from their accounts by withdrawing money from the bank or the ATM

With respect to the first, the concerned legislation is the RBI Act, 1934 and with respect to the second, the concerned legislation is the Payment and Settlement Act, 2007.

The RBI Act, 1934

The RBI was established for the purpose of regulating the issue of Bank notes and maintaining the currency reserves of the Country. The Preamble of the RBI Act mentions that it was created for the purpose of maintaining monetary stability in the country.

Section 24 of the RBI Act deals with the denomination of notes. Section 24 (1) of the RBI Act reads –“Subject to the provisions of sub-section (2), bank notes shall be of the denominational values of two rupees, five rupees, ten rupees, twenty rupees, fifty rupees, one hundred rupees, five hundred rupees, one thousand rupees, five thousand rupees and ten thousand rupees or of such other denominational values, not exceeding ten thousand rupees, as the Central Government may, on the recommendation of the Central Board, specify in this behalf.” 

Section 24 (2) of the RBI Act reads as –“The Central Government may, on the recommendation of the Central Board, direct the non-issue or the discontinuance of issue of bank notes of such denominational values as it may specify in this behalf.”

What is this Central Board?

The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India under the provisions of the RBI Act.

Section 26 of the RBI Act deals with the legal tender character of notes.Section 26(2) of the RBI Act reads –“On recommendation of the Central Board the Central Government may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender save at such office or agency of the Bank and to such extent as may be specified in the notification.While on a cursory reading, it may seem like both the sections prevent the circulation of a certain denomination from the market, there is a marked difference between stopping circulation of a currency and deeming it to not be legal tender.”

For example, the RBI discontinued currency issued before 2005 in January, 2014. The press release reads -“As you are aware, RBI has been following a policy of phasing out certain series of banknotes from time to time. It has now been decided that all old series of banknotes issued prior to 2005 will be completely withdrawn from circulation.”

In contrast, the RBI notification issued yesterday reads - “Rupees 500 and 1000 denominations of Bank Notes of the existing series issued by Reserve Bank of India (hereinafter referred to as Specified Bank Notes) shall cease to be legal tender with effect from 9th November, 2016.”

This means that not only will the 500 and 1000 rupee denomination be discontinued; it would have no value as legal tender anymore. The RBI has also introduced one new currency denomination – the 2000 rupee note and the 500 rupee note which would be printed in a fresh format (with an inset letter E). The 2000 rupee note will be printed two ways – one with an inset letter (letter R) and one without an inset letter. 

Image credits - ndtv.com

What are inset letters?

Inset letters in Indian currency is an extremely interesting but little known concept. Inset letters are a security feature in bank notes, to differentiate the distinct series of bank notes and to identify the printer of the currency. In India, there are commonly 4 printers in different States employed by the RBI to print currency namely Salboni, West Bengal; Dewas, Madhya Pradesh; Mysore, Karnataka and Nashik, Maharashtra and each of them have been allocated separate alphabets.

The Payment and Settlements Act, 2007

This Act regulates and supervises the payment systems in India and authorizes the RBI as the authority for the purpose of regulation and supervision of payment systems. Payment System is defined under Section 2(i) of the Payments and Settlements Act and includes systems enabling credit card operations, debit card operations, smart card operations, money transfer operations or similar operations’. Hence, all your ATM transactions fall under the ambit of payment systems which are regulated by the RBI, though not directly under the RBI Act. 

The RBI issued another notification on November 8, 2016 titled - 'ATMs –Non-dispensing of Old High Denomination Notes – Closure of operations'. Under this notification, the following are directives issued for the Banks with respect to the functioning of ATMs. There are:

•  Stop dispersing 500 and 1000 rupee denomination notes (called Old High Denomination notes in the notification) from the midnight of 8 November, 2016.
• The ATMs may resume functioning from November 11, 2016 upon their recalibration to dispense bank notes of only ₹ 50 and ₹ 100 denominations.

The RBI derived the power to do this from Section 10 (2) and Section 18 of the Payment and Settlement Act. 

Section 10(1) of the Payments and Settlements Act gives the RBI the power to prescribe directions for the following: 

1. Timings to be maintained by the payment systems

2. Manner of transfer of funds within the payment system

3. Other standards to be complied with the payment systems generally.

     Section 10(2) of the Payments and Settlements Act reads as –“Without prejudice to the provisions of sub-section (1), the Reserve Bank may, from time to time, issue such guidelines, as it may consider necessary for the proper and efficient management of the payment systems generally.”

Section 18 of the Payments and Settlements Act gives the RBI a very wide scope to implement any direction with respect to payment systems affecting domestic transactions that it deems fit in public interest. 

Hence any measure taken by the RBI with respect to closure of all ATMs across the country on a certain date and maintenance of only a certain denomination of currency in the ATM is possible because of the above-mentioned sections.

If Only We Had Checked The RBI Website As Closely As We Check Our Facebook Profiles.

On November 2, 2016 (nearly six days prior to this policy being notified), the RBI came out with a notification titled – ‘Dispensation of Rs.100 denomination banknotes through exclusive ATMs’.

 In this notification, it has been mentioned that – ‘very few banks had taken initiatives in setting up ATMs dispensing lower denomination notes including Rs.100 denomination banknotes’. The notification then continues to read – ‘With a view to encourage the banks in that direction, it has been decided to conduct a pilot project wherein 10% of the ATMs in the country will be calibrated to dispense Rs.100 banknotes exclusively. You are, therefore, advised to configure / calibrate 10% of your ATMs to facilitate this arrangement.’

While one cannot expect news of this move to be conveyed to the Bank Customers in advance, as it would defeat the motive of public interest and the fight against black money, one can see that the RBI had made a discreet effort to bring higher levels of circulation of the 100 Rupee note in the market.

What Happens Now? 

While the suddenness of this move has certainly caused disturbance in public life, the other important aspect is that ATMs and cash dispensing machines are being re-configured to disburse bank notes of 100 and 50 rupee denominations. This makes transacting in lager volumes of cash cumbersome for the time being.

This is not the first time countries have discontinued currency out of fear of counterfeiting. In May 2016, the European Central Bank (“ECB”) announced that it would stop printing the 500 Euro notes, which would permanently be discontinued by the end of 2018. However, in its statement dated 4 May, 2016, the reason given by the ECB was the fear that the 500 Euro note could facilitate illicit activities. This is similar to the Indian Government’s motive of combating black money, currency counterfeiting and money laundering by making the 500 and 1000 rupee notes illegal tender. 

However, a stark difference in the approach of both these countries is that the currency is being phased out in a systematic manner in Europe. While one can argue that this level of cinematic surprise was required in India to make this an efficient move, the rebuttal is that the common man who has not made provisions for alternate revenues of liquid cash to facilitate day to day transactions is ultimately suffering.  

Image credits - allindiaroundup.com 

The effects of this policy will be something that will be debated for years to come. In the sphere of international relations, India and China have opened a 24*7 hotline to exchange information regarding fake currency, as a lot of the counterfeit notes are smuggled from Pakistan to India through China. The Income tax department has already cracked down on a few jewelers who were accepting the 500 and 1000 rupee notes at a 40% discount and converting the unaccounted money into jewelry and bullion. 

There has also been a 1000% increase in train ticket and airline ticket bookings, as the Notifications state that railway and airline counters can accept these denominations until November 11, 2016. However, the Government has been pacing many steps ahead of potential hoarders, and the Indian Railways will only be refunding a maximum amount of Rs. 10,000 per person in the event of cancellation. Hence, if a person has spent around Rs. 50,000 in 1000 and 500 rupee denominations on AC 1st tier tickets with a plan to cancel it and get the refund into his bank account, thereby avoiding going to the bank and legally exchanging the money, they would suffer a loss of Rs. 40,000. Airline tickets are now non-refundable if they are purchased with 1000 and 500 rupee notes. 

There are petitions in the Supreme Court and the Bombay High Court contesting the validity of this measure. The Madras High Court has dismissed a petition on de-monetization, stating that this measure is for the greater good of the country. While there are no direct fundamental rights that have been violated by this measure, it will be interesting to note the judicial response to what is easily one of the most surprising and shocking executive decisions that the country has seen in the recent past.


Peering out from behind The Witness Stand: 

Advocate Shriya Maini (Content Creator) is a young, bright, scholarly, advocate turned entrepreneur currently practicing at the Supreme Court of India, the Delhi High Court and the district courts at New Delhi.  She specializes in dispute resolution and as an unabashed feminist, particularly enjoys criminal litigation. She is a graduate of Gujarat National Law University, India who then pursued the Bachelor of Civil Laws programme on a full scholarship (Dr. Mrs Ambruti Salve Scholarship) sponsored by Dr. Harish Salve, Senior Advocate from the University of Oxford, specializing in International Crime. As a recipient of the Oxford Global Justice Award 2015 for Public International Law, she assisted the President of the International Residual Mechanism for the Criminal Tribunals (MICT) at The Hague, Netherlands. She is now back in the Courts of Delhi, India to pursue her passion in litigation.

Ms. Chethana Venkataraghavan (Editor) is currently a fifth year law student at Gujarat National Law University. She was part of the team that won Surana and Surana Corporate Law Moot Court Competition, 2013 and the Philip.C.Jessup International Moot Court Competition, India Rounds, 2016. She was adjudged the Best Speaker of the Finals at the Manfred Lachs Space Law Moot Court Competition, Asia Pacific Rounds, 2014. She is passionate about blogging and is currently involved in an initiative – Examofsmile - that aims to reduce levels of stress and depression among law students across the country.