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The Specified Bank Notes (Cessation of Liabilities) Bill, 2017 is being discussed in Parliament today.[1] The Bill replaces an Ordinance promulgated on December 30, 2016 to remove the Reserve Bank of India’s (RBI) liability and central government’s guarantee to honour the old Rs 500 and Rs 1,000 notes which were demonetised on November 8, 2016 through a notification.[2] These notes were allowed to be deposited in banks by December 30, 2016. In light of this, we explain the provisions of the Bill and possible implications.
What does the Bill say?
Under the RBI Act, 1934, RBI is responsible for issuing currency notes, and is liable to repay the holder of a note upon demand. The Bill provides that, from December 31, 2016, RBI would no longer be liable to repay holders of old notes of Rs 500 and Rs 1,000, the value of these notes.[3] Further, the old notes will no longer be guaranteed by the central government.
Can a person keep old notes?
A person will be prohibited from holding, transferring or receiving the old notes from December 31, 2016 onwards. It exempts some people from this prohibition including: (i) a person holding up to 10 old notes (irrespective of denomination), and (ii) a person holding up to 25 notes for the purposes of study, research or numismatics (collection or study of coins or notes).
What happens if a person continues to hold old notes after December 30, 2016?
Any person holding the old notes, except in the circumstances mentioned above, will be punishable with a fine: (i) which may extend to Rs 10,000, or (ii) five times the value of notes possessed, whichever is higher.
Are there any issues with this provision?
There may be two issues.
No window to deposit old notes before imposing penalty: The notification of November 8th allowed old currency notes to be deposited till December 30, 2016 and specified that people unable to deposit them till this date would be given an opportunity later.2 However, the Ordinance which came into force on December 31, 2016 made it an offence to hold old currency notes from that day onwards and imposed a penalty. This overnight change did not provide a window for a person holding the notes on that day to exchange or deposit them. Therefore, not only did the holder lose the monetary value of the notes but he was also deemed to have committed an offence. This implies that a person who had the notes did not have an opportunity to avoid committing an offence and attracting a penalty.
Unclear purpose behind penalty on possessing old notes: The purpose and the objective behind imposing a penalty for the possession of old currency notes is unclear. One may draw a comparison between holding an invalid currency note, and an expired cheque since both these instruments are meant to complete transactions. Currently, a cheque becomes invalid three months after being issued. However, holding multiple expired cheques does not attract a penalty.
Is it still possible to deposit old notes?
The government has specified a grace period under the Bill to allow: (i) Indian residents who were outside India between November 9, 2016 to December 30, 2016 to deposit these notes till March 31, 2017, and (ii) non-residents who were outside India during this period to deposit notes till June 30, 2017. The government may exempt any other class of people by issuing a notification. In addition, RBI has permitted foreign tourists to exchange Rs 5,000 per week. No other person can exchange or deposit old notes after December 30, 2016.
Would this satisfy Constitutional norms?
While the notification issued on November 8 specified that after December 30, 2016, any person unable to exchange or deposit old notes would be allowed to do so at specified RBI offices, the Bill does not provide such a facility except in the circumstances discussed above.
On may question whether this violates Article 300A of the Constitution, which states that no person will be deprived of his property except by law. Though this Bill will be a “law”, one may want to think about whether its provisions meet the standards of due process and are not arbitrary. Given that earlier notifications had indicated that a facility for exchanging or depositing old notes would be provided after December 30, 2016, would the action of not providing such facility under the Bill qualify as an arbitrary action which violates due process? [4] A few examples will be useful in examining this question.
Case 1: A person unable to deposit notes due to poor health
A person may have been unable to deposit old currency notes owing to various reasons such as poor health, old age or disability till the deadline of December 30, 2016. The Bill does not provide any facility for such persons to deposit old notes, except if they were not in India during the period between November 8 and December 30, 2016.
Case 2: A person without a bank account
A person without a bank account may have held over Rs 4,500 in old currency notes. The notification (and future modifications) allowed a person to exchange up to Rs 4,500 over the counter once till November 24, 2016.[5] Such a person would have to incur a monetary loss if he possessed old notes above this value, given his inability to deposit them in a bank account.
Case 3: Indian citizens living abroad
There may be Indians working or studying abroad holding old currency notes. The government has notified the last date for depositing old notes for these non-resident Indians as June 30, 2017.[6] However, these people may not visit India between November 8, 2016 and June 30, 2017. In such a scenario, these people may have to incur a monetary loss.
Case 4: Foreign nationals entering India before demonetisation
Foreign tourists in the country may have held old currency notes before demonetisation on November 8, 2016. Such tourists can only exchange old currency notes of up to Rs 5,000 per week till January 31, 2017.[7] Given that such foreigners may not have bank accounts in India, they may also suffer a monetary loss for whatever amount could not be exchanged within the period they were in India. For example, a person who had Rs 10,000 and left India on November 13, 2016 would not have been able to get the value of notes they had, over Rs 5,000.
In addition, Indian currency notes are used legally in neighbouring countries such as Nepal and Bhutan. The Bill allows only Indian citizens to deposit old notes for an extended period under certain conditions. However, it does not make any provisions for foreigners to deposit or exchange old notes held by them. Such foreign nationals who are not Indian residents would not have bank accounts in India.
[1] The Specified Bank Notes (Cessation of Liabilities) Bill, 2017,http://www.prsindia.org/uploads/media/Specified%20Bank%20notes/specified%20bank%20notes%20bill%202017-compress.pdf.
[2] S. O. 3407 (E), Gazette of India, Ministry of Finance, November 8, 2016, http://finmin.nic.in/172521.pdf.
[3] The Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016,http://www.prsindia.org/uploads/media/Ordinances/Specified%20Bank%20Notes%20%28Cessation%20of%20Liabilities%29%20Ordinance,%202016.pdf.
[4] Section 2 (ix) of the notification issued on November 8, 2016 (No. S. O. 3407 (E)) states that any person who is unable to exchange or deposit the specified bank notes in their bank accounts on or before the 30th December, 2016, shall be given an opportunity to do so at specified offices of the Reserve Bank or such other facility until a later date as may be specified by it.
[5] S. O. 3543 (E), Gazette of India, Ministry of Finance, November 24, 2016, http://finmin.nic.in/172740.pdf.
[6] S. O. 4251 (E), Gazette of India, Ministry of Finance, December 30, 2016,http://dea.gov.in/sites/default/files/24Notification%2030.12.2016.pdf.
[7] Exchange facility to foreign citizens, January 3, 2017, https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10815&Mode=0.
As of May 4, 2020, there are 42,533 confirmed cases of COVID-19 in India. Since April 27, 14,641 new cases have been registered. Out of the confirmed cases so far, 11,707 patients have been cured/discharged and 1,373 have died. As the spread of COVID-19 has increased across India, the central government has continued to announce several policy decisions to contain the spread, and support citizens and businesses who are being affected by the pandemic. In this blog post, we summarise some of the key measures taken by the central government in this regard between April 27 and May 4, 2020.
Source: Ministry of Health and Family Welfare; PRS.
Lockdown
Extension of lockdown until May 18, 2020
The Ministry of Home Affairs passed an order extending the lockdown for two weeks from May 4, 2020 (until May 18, 2020). Activities that remain prohibited in the extended lockdown include:
Travel and movement: Passenger movement by: (i) air (except for medical and security purposes), (ii) trains (except for security purposes), (iii) inter-state buses (unless permitted by central government), and (iv) metro, remains prohibited. Inter-state movement of individuals is also prohibited except for medical reasons or if permitted by the central government. Intra-state movement of persons for all non-essential activities will remain prohibited between 7pm and 7am.
Education: All educational institutions such as schools and colleges will remain closed except for online learning.
Hospitality services and recreational activities: All hospitality services such as hotels will remain closed except those being used as quarantine facilities, or those housing persons such as healthcare workers, police, or stranded persons. Further, recreational facilities such as cinemas, malls, gyms, and bars will remain closed.
Religious gatherings: All religious spaces will remain closed and congregation for religious purposes will remain prohibited.
The revised guidelines for the lockdown include risk-profiling of districts into red, green and orange zones. Zone classifications will be decided by the Ministry of Health and Family Welfare and shared with states on a weekly basis. States may include additional districts as red or orange zones. However, they may not lower the classification of any district. For a district to move from a red zone to an orange zone, or from an orange zone to a green zone, it must have no new cases for 21 days. Classification of and activities permitted in the zones include:
Red zones or hotspots: These districts will be identified based on the total number of active cases, doubling rate of confirmed cases, and testing and surveillance feedback. Additional activities prohibited in red zones include: (i) cycle and auto rickshaws, (ii) taxis, (iii) buses, and (iv) barber shops, spas and salons. Activities that are permitted include: (i) movement of individuals (maximum two persons in four wheelers, and one person in two wheelers), (ii) all industrial establishments in rural areas and certain industrial establishments in urban areas such as manufacturing of essential goods, and (iii) all standalone and neighbourhood shops.
Green zones: These zones include districts with no confirmed cases till date or no confirmed cases in the last 21 days. No additional activities are prohibited in these zones. In addition to activities permitted in red zones, buses can operate with up to 50% seating capacity.
Orange zones: These zones include all districts that do not fall in either red or green zones. Inter and intra-state plying of buses is prohibited in these zones. Activities that are permitted (in addition to those permitted in red zones) include: (i) taxis with a maximum of one driver and two passengers, (ii) inter-district movement of individuals and vehicles for permitted activities, and (iii) four wheeler vehicles with a maximum of one driver and two passengers.
Certain areas within red and orange zones will be identified as containment zones by the district administration. Containment zones may include areas such as residential colonies, towns, or municipal wards. In containment zones, local authorities must ensure 100% coverage of Aarogya Setu App, contract tracing, quarantine of individuals based on risk, and house to house surveillance. Further, movement of persons in or out will be prohibited except for medical emergencies and essential goods, amongst other measures.
Movement of stranded persons
The Ministry of Home Affairs has permitted the movement of migrant workers, pilgrims, tourists, students, and other stranded persons, by special trains. To facilitate this, all states and union territories will designate nodal authorities for sending, receiving, and registering stranded persons. The state sending persons and the state receiving persons both need to agree to the exchange. Each train can carry up to 1,200 persons and no train may run at less than 90% capacity. Passengers approved for travel by the state governments may be required to pay some part of the ticket fare.
Education
UGC issues guidelines on examinations and the academic calendar for universities
The University Grants Commission (UGC) issued guidelines on examinations and the academic calendar for universities in view of the COVID-19 pandemic.
Academic Calendar: Classes for the even semester in universities were suspended from March 16, 2020 onwards. The guidelines prescribe that online teaching must continue till May 31 through social media (WhatsApp / YouTube), emails, or video conferencing. The examinations for the current academic year should be held in July, 2020 and the results for the same should be declared by July 31 (for terminal year students) and by August 14 (for intermediate year students)
The Academic Session 2020-21 may commence from August 2020 for old students and from September 2020 for fresh students. The admission process for the fresh students can be done in August. Consequently, the commencement of even semester for 2020-21 can be from January 27, 2021. The commencement of academic session 2021-22 may be from August 2021. The universities may follow a 6-day week pattern to compensate the loss of teaching for the remaining session of 2019- 20 and the 2020-21 academic session.
Examination: The universities may conduct semester or yearly examinations in offline or online mode. This has to be done while observing the guidelines of “social distancing” and ensuring fair opportunity for all students. They may adopt alternative, simplified methods of examinations such as multiple choice questions based examinations or open book examination. If examinations cannot be conducted in view of the prevailing situation at the time, grading may be done on the basis of internal assessments and performance in previous semester. The universities may conduct the Ph.D viva examinations through video conferencing.
Other guidelines: Every University should establish a COVID-19 cell for handling student grievances related to examinations and academic activities during the pandemic and notify effectively to the students. Further, a COVID-19 cell will be created in the UGC for faster decision making.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.
