Introduction

The case of Ashwini Kumar Upadhyay v. Union of India & Ors. (2023 DHC 3807) was adjudicated by the Delhi High Court on May 29, 2023. The petitioner, Ashwini Kumar Upadhyay, filed a writ petition under Article 226 of the Constitution of India as a Public Interest Litigation (PIL). The core contention was against the Reserve Bank of India (RBI) and the State Bank of India (SBI) for issuing notifications that permitted the exchange of ₹2000 denomination banknotes without requiring any requisition slip or identity proof. The petitioner argued that this policy was arbitrary and violative of Article 14, which guarantees equality before the law.

The petitioner contended that the ₹2000 denomination banknotes, amounting to ₹3.62 lakh crores in circulation, are predominantly hoarded as black money and are not commonly used for legitimate transactions. He raised concerns that the absence of identity verification facilitates activities like money laundering, drug trafficking, and corruption.

Summary of the Judgment

The Delhi High Court, presided over by Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad, dismissed the PIL filed by Ashwini Kumar Upadhyay. The court held that the government's decision to withdraw the ₹2000 denomination banknotes from circulation was a policy decision aimed at managing currency requirements and was not equivalent to demonetization. The court observed that the RBI's notification allowed for the exchange of ₹2000 notes up to ₹20,000 at a time without requiring identity proof to ensure operational convenience and avoid disrupting regular banking activities.

The court emphasized that economic and fiscal policies fall within the executive's domain and are not typically subject to judicial scrutiny unless they are manifestly arbitrary or violate constitutional provisions. Citing various Supreme Court precedents, the court concluded that the PIL lacked merit and was dismissed.

Analysis

Precedents Cited

The judgment extensively referenced several landmark Supreme Court cases to substantiate the non-interference stance of the judiciary in economic policy matters. The key precedents cited include:

• R.K. Garg v. Union of India (1981)
• BALCO Employees' Union (Regd.) v. Union of India (2002)
• Directorate of Film Festivals v. Gaurav Ashwin Jain (2007)
• Small Scale Industrial Manufactures Assn. v. Union of India (2021)

These cases collectively establish that the judiciary refrains from evaluating the wisdom or efficacy of economic policies formulated by the legislature or executive. The courts intervene only when there is a clear violation of constitutional provisions or when the policy is arbitrary.

Legal Reasoning

The court adopted a deferential approach towards the executive's policy decision, highlighting the following points:

• Nature of the Decision: The withdrawal of ₹2000 notes was presented as a routine policy measure aimed at managing currency circulation, rather than a coercive act like demonetization.
• Operational Convenience: The policy facilitated a smooth transition by allowing the exchange of ₹2000 notes without identity verification, thereby ensuring accessibility for the general public.
• Legislative Expertise: Economic policies are complex and require specialized expertise, which the judiciary does not possess. Hence, policy-making is best left to the executive and legislative branches.
• Absence of Arbitrariness: The court found no evidence that the policy was arbitrary or intended to facilitate illicit activities. Instead, it was a measured decision based on the reduced circulation and utility of the ₹2000 denomination.

Furthermore, the court reiterated that unless a policy decision is palpably arbitrary or in direct violation of the Constitution, it falls outside the purview of judicial review.

Impact

This judgment reinforces the doctrine of separation of powers by affirming the judiciary's limited role in scrutinizing economic and fiscal policies. It sets a clear precedent that as long as the government's policy decisions are within the constitutional framework and are not arbitrary, courts will refrain from interference.

For future cases, this means that challenges against economic policies will require substantial evidence of arbitrariness or constitutional violations to merit judicial intervention. This promotes a balanced governance structure where policy-making remains the prerogative of the executive and legislative branches.

Complex Concepts Simplified

Article 14 of the Constitution of India

Article 14 guarantees equality before the law and equal protection of the laws within the territory of India. It mandates that the state shall not deny any person equality before the law or the equal protection of the laws. In this case, the petitioner argued that the lack of identity verification in exchanging ₹2000 notes created an unequal and arbitrary situation.

Public Interest Litigation (PIL)

PIL is a legal mechanism that allows individuals or groups to file petitions in court to seek redressal for the public interest or to address issues affecting a larger section of society. It is not limited to personal grievances but focuses on matters that impact the public at large.

Judicial Review

Judicial review refers to the power of the judiciary to examine the actions of the legislative and executive branches to ensure they comply with the Constitution. However, the scope of judicial review is limited, especially concerning discretionary policy decisions unless they are unconstitutional or arbitrary.

Conclusion

The Delhi High Court's dismissal of the PIL in Ashwini Kumar Upadhyay v. Union of India & Ors. underscores the judiciary's restrained approach towards economic policy decisions. By affirming that the government's action to withdraw ₹2000 denomination banknotes was neither arbitrary nor unconstitutional, the court reinforced the principle that economic governance is primarily the domain of the executive and legislative branches.

This judgment is significant as it delineates the boundaries of judicial intervention, ensuring that policy-making remains insulated from judicial scrutiny unless it flagrantly violates constitutional mandates. It exemplifies the balance of power among the branches of government, promoting an effective governance structure where specialized decisions are made by the appropriate authorities.