Tuesday, January 10, 2017

Re: [IAC#RG] Suggestions Invited: Accidental Discovery of demonetised currency at home post Dec 30 Deadline

Dear Col. Srikant

Read this carefully.

By an ordinance the Govt has unilaterally repudiated its sovereign debt contained in the notes you hold thereby releiving the RBI from its obligations to exchange old notes for coin u/s 39 RBI Act.

I clearly recall that I, you, and all similarly placed members of IAC holding old nates, had been regularly visiting the designated RBI offices to EXCHANGE these old notes (u/s 39 RBI Act 1934) but there was a tremendous shortage of coin and low denomination notes or other legal tender and the RBI could not comply with its statutory obligations. (NB: In the absence of coin from the Govt the RBI cannot issue new notes, since new notes can only be issued against replacement or acknowledgment of future Govt debt).

Of course as National Convenor IAC I have been regularly complaining to RBI and Govt about their failures to comply with section 39. The Bombay High Court Judgement in D'Souza's case [link] is unchallenged and binding that even demonetised notes are to be exchanged for value. You can remind RBI that I was protesting on your behalf also since all our emails are with you. I can share the videos of the massive queues we recorded outside RBI's offices till 30th Dec 2016 which prevented most note holders from entering.

Ask RBI ("governor@rbi.org.in") pointedly how they will comply with their section 39 obligations to EXCHANGE old notes at their offices for legal tender considering that they did not hold sufficient legal tender notes on those dates in their issue dept to satisfy you and were ratioining notes at a miserly Rs. 2,000 per person.

Remember Govt can only extenguish the legal tender characteristic of notes, it cannot extinguish RBI's obligations to EXCHANGE notes on demand at RBI's office without an amendment to the RBI Act. The ordinance issued by the President has set aside the law of Parliament since Parliament is not in session (view ordinance here).


Of course once Parliament resumes the ordinance lapses in the normal course.


On Wed, Jan 11, 2017 at 8:13 AM, Colonel Srikant <colonelsrikant@gmail.com> wrote:
While packing to move house, in Bangalore, my wife and I discovered, yesterday, one lakh rupees in demonetised notes in our steel cupboard, which we had kept aside for medical and other emergencies (we are both well above 60 years and retired from government service- army and banking), and overlooked to deposit by Dec 30. 
Can anyone, under the unexpected circumstances, suggest the best possible solution to help us out and whom to contact for same? 

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