B.N. Kirpal, J.
(1) This judgment will dispose of Civil Writ Petitions Nos. 1009 to 1012 of 1980 and 1141 and 1669 of 1979 wherein the validity of some of the provisions of the High Denomination Bank Notes (Demonetisation Act') has been challenged. The petitioners arc aggrieved because they had not been paid the exchange value of the high denomination notes which were held by them and which had been demonetised.
(2) Apart from challenging the validity of sections 7 and 8 of the demonetisation Act, the petitioners are also aggrieved by the orders, passed under the Demonetisation Act, declining to pay them the exchange value of the demonetised notes held by them. The reasons for this refusal vary from case to case and the petitioner's contention in this regard will be dealt with separately.
(3) As the Parliament was not in session the President promulgated the High Denomination Bank Notes (Demonetisation) Ordinance, 1978 which came into effect on 16th January, 1978. It is not necessary to refer to the terms of this Ordinance because with the enactment of the Demonetisation. Act the Ordinance stands repealed. The Act, which received the assent of the President on 30th March, 1978, was given retrospective effect from 16th January, 1978. The high denomination notes which were sought to be demonetised by
'3.High denomination bank notes to cease to be legal tender. On the expiry of the 16th day of January, 1978, all high denomination bank notes shall, notwithstanding anything contained in section 26 of the Reserve Bank of India Act, 1934, ceases to be legal tender in payment or on account at any place'.
The prohibition of transfer and receipt of high denomination notes was provided by Section 4 which reads as follows :
'4.Prohibition of transfer and receipt of high denomination bank notes. Save as provided by or under this Act, no person shall, after the 16th of January, 1978, transfer to the possession of another person or receive into his possession from another person any high denomination bank note . Two more sections are relevant for our purpose, namely, sections 7 and 8 of the Demonetisation Act. The relevant portions of the said sections, which provide for exchange of high denomination bank notes within and after the stipulated period, read as under :- '7. Exchange of hh denomination bank notes held by other persons- (1) Notwithstanding anything to the contrary contained in the Reserve Bank of India Act) 1934, any high denomination bank note owned by a person other than a bank or Government treasury may be exchanged after the 16th day of January, 1978, only on tender of the note : (a) Where the High denomination bank note is owned by an individual, by the individual himself, or where the individual is absent from India, by the individual concerned or some person duly authorised by him in this behalf; or where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf : and within the time and in the manner provided in this section. (2) Every person desiring to tender for exchange a high denomination bank note under this section shall prepare in the form set out in the Schedule three copies of a declaration signed by him giving in full the particulars required by that form and shall, not later than the 19th day of January, 1978, deliver such copies in person together with the high denomination bank notes he desires to exchange: Provided that if such person resides in a place not within convenient reach of any such office or branch, or if, by reason of age, infirmity or illness he is unable to attend the reat, he may forward the high denomination bank notes he desires to exchange together with three copies of the declaration in respect thereof by insured post to the Reserve Bank at Bombay not later than the 19th day of January, 1978. (4) Unless it appears that the declaration has not been completed in all material particulars, the Reserve Bank, the State Bank or any bank notified under clause (c) of sub-section (2) as the case may be, to which an application for exchange of High denomination bank notes is made under this section, shall pay the exchange value of the said notes for credit to a properly introduced account of the owner or the declarant, as the case may be, with any scheduled bank. Provided that if the owner or declarant, as the case may be, does not have a bank account, the exchange value of the said notes shall be paid only on proper identification and until payment is so made, the amount shall remain in the custody of the Reserve Bank or the bank, as the case may be, to which the high denomination bank notes were tendered. (5) where it appears that the declaration has not been completed in all material particulars, the Reserve Bank, the State Bank or the notified bank, as the case may be, to which such application as aforesaid is made shall, unless the declarant is able to supply the omission without delay, refuse to accept and pay for the bank notes to which the declaration relates, and where it does so refuse, shall return one copy of the declaration to the Central Government to which it shall forward a copy of the declaration with a brief statement of the reasons for refusing to pay for the bank notes. (6) The Central Government may require any declarant referred to in sub-section (5) to amplify his declaration to such extent and in respect of such particulars as it thinks fit and may, unless the declarant is able to fully comply with such requirement refuse, for reasons to be recorded in writing, to sanction the exchange of the high denomination bank notes to which the declaration relates. (7) The Central Government or any person or authority authorised by it in this behalf may, by order in writing and for reasons to be recorded therein, extend in any case or class of cases the period during which high denomination bank notes may be tendered for exchange under this section. (8) Exchange of notes after the time limit specified in Section 7(1) Notwithstanding anything contained in S. 7, any person who fails to apply for exchange of any high denomination bank notes within the time provided in that section may tender the notes together with the declaration required under that section to the Reserve Bank at any of the place specified in Clause (a) of subsection (2) of that section, not later than the 24th day of January 1978 together with a statement explaining the reasons for his failure to apply within the said time limit ; Provided that if such person resides in a place not within convenient reach of the sub-office, office or branch of the Reserve Bank at any of the said places or if, by reason of age, infirmity or illness, he is unable to attend the reat he may forward the high denomination bank notes he desires to exchange together with three copies of the declaration required under section 7 by insured post to the Reserve Bank at Bombay not later than the 24th day of January, 1978, along with a statement expediting the reasons for his failure to apply within the time specified in section 7. (2) The Reserve Bank may, if satisfied after making such inquiries as it may consider necessary that the reasons for the failure to submit the notes for exchange within the time provided in Section 7 are genuine, pay the value of the notes in the manner specified in sub-section (4) of that Section. (3) Any person aggrieved by the refusal of the Reserve Bank to pay the value of the notes under sub-section (2) may prefer an appeal to the Central Government within fourteen days of the communication of such refusal to him'.
(4) The first contention raised by Shri Bobde was that, notwithstanding the provisions of the Demonetisation Act, the holders of the high denomination notes were entitled to obtain exchange value of those notes from the Reserve Bank of India. It was contended that the provisions of the Reserve Bank of India Act, 1934 (hereinafter referred to as the R.B.I. Act) made it obligatory for the Reserve Bank to give the exchange value in respect of the bank notes which had been issued by it notwithstanding the fact that the said notes may have ceased to be legal tender. It was submitted that according to section 3 of the Demonetisation Act the high denomination notes were to cease to be legal tender 'in payment or on account' at any place. According to Mr. Bobde this, and the other provisions of the Demonetisation Act, did not prohibit the Reserve of India from discharging its statutory liabilities and obligations under the provisions of the R.B.I. Act.
(5) A bank note is not a bill of exchange under the Negotiable Instruments Act. This being so, the promise to pay which is printed on the bank note can be enforced only if there is a statutory obligation on the Reserve Bank. The submission of Mr. Bobde was that this obligation is to be found in section 34 and 39 of the R.B.I. Act. The said provisions read as under:
'34(1)The liabilities of the Issue Department shall be an amount equal to the total of the amount of the currency notes of the Government of India and bank notes for the time being in circulation. 39(1) The Bank shall issue rupee coin on demand in exchange for bank notes and currency notes of the Government of India, and shall issue currency notes or bank notes on demand in exchange for coin which is legal tender under the Indian Coinage Act, 1906. (2) The Bank shall, in exchange for currency notes or bank notes of two rupees or upwards, supply currency notes or bank notes of lower value or other coins which are legal tender under the Indian Coinage Act, 1906, in such quantities as may, in the opinion of the Bank, be required for circulation; and the Central Government shall supply such coins to the Bank on demand. If the Central Government at any time fails to supply such coins, the Bank shall be released from its obligations to supply them to the public.'
(6) The Reserve Bank issues bank notes under Section 22 of the R.B.I. Act. Section 26, inter alia, provides that every such bank note shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government. It was submitted by Mr. Bobde that the circulation of notes come to an end when there is physical or legal destruction of Bank notes and the said notes arc back to the Bank.
(7) We are unable to agree with the aforesaid submission. The effect of enacting section 3 of the Demonetisation Act is that the said bank note ceases to be a legal tender, other words legal destruction of the notes takes place at that time. The provisions of Section 3 of the Demonetisation Act override the provisions of section 26 of the R.B.I. Act. The enactment of Section 3 would also mean that the said bank notes shall, in law, cease to be in circulation because there has been a legal destruction of the said bank notes and there is no warrant for contending that such notes would still be deemed to be in circulation till they come back to the Bank. Bank notes can be said to be in circulation if they can be circulated from one person to another or they can be given as legal tender in payment or on account at any place. By virtue of section 3 the high denomination notes ceased to be legal tender and with effect from 16th January, 1978 they cannot be given by the holder in payment or on account at any place. Moreover, by Section 4 transfer of possession of the bank note is brought to an end. This being so the liability of the Issue Department contemplated by Section 34 of the R.B.I. Act would also cease. The liability under the said section existed as long as the bank notes are in circulation. When the circulation of the bank notes comes to an end on 16-1-78 in the present case, then simultaneously the liability of the issue Department also ceases.
(8) Faced with this difficulty, Mr. Bobde sought to contend that under Sub-section (2) of section 39 of the R.B.I. Act the Reserve Bank was obliged to supply different forms of currency in exchange of bank notes. It is true that notwithstanding the enactment of Sections 3 and 4 of the Demonetisation Act a holder of High denomination bank notes could have insisted upon the Reserve Bank exchanging the said high denomination notes for other currency notes as provisied by section 39(2). This provision, however, unfortunately for the petitioners, stands overridden by section 7 of the Demonetisation Act, the said section has been enacted 'notwithstanding anything to the contrary' contained in the R.B.I. Act. Section 7 provides for the manner and he time in which the high denomination notes can be exchanged. The provisions of Section 7 and 8 are clearly in conflict with and contrary to section 39(2), and the effect of the same is that after 16th January, 1978 no exchange can be effected under 39(2) and high denomination could be exchanged only in accordance with the provisions of sections 7 and 8 of the Demonetisation Act.
(9) It was faintly suggested by Mr. Bobde that, in any event, there was an implied obligation on the part of the Bank to exchange the high denomination notes for other currency. Such a question had arisen before the Bombay High Court in the case of J M. D' Souze v. Reserve Bank of India A.I..R. 1946 Bom 510. That case arose pursuant to demonetisation of certain high currency notes on the promulgation of Ordinance 3 of 1946. It was sought to be contended, in that case, that de hors section 39 the holder had a right to receive payment in lieu of the high denomination notes. The Bombay High Court held that the mode of satisfying an obligation of the Bank had been expressly provided for under section 39 of the R.B.I. Act and, thereforee, it could not be assumed that the bank had any other implied obligation to pay. The Bombay High Court also held that this statutory method of discharge, contained in section 39 of the R.B.I. Act, had stood modified by the Demonetisation Ordinance and, as a result thereof, no owner or holder of a high denomination note could claim its discharge from the Bank except in the manner provided in the said Ordinance. We arc in respectful agreement with the aforesaid decision of the Bombay High Court and we feel that, in view of the provisions of sections 7 and 8 of the Demonetiation Act, the Reserve Bank of India cannot be asked to discharge any go-called obligation which might have arisen by virtue of the demonetised notes issued by it except in accordance with the provisions of the said sections 7 and 8 of the Demonetisation Act.
(10) It was then submilted, on behalf of the petitioners, that the effect of the Demonetisation Act is that a public debt has been wiped off and this amounts to acquisition. It is contended that the acquisition of the high denomination notes took place on 24th January, 1978 and as no amount in respect of the said acquisition is payable under the Demonetisation Act this court mult hold that the Act, and sections 7 and 8 in particular, arc vocative of article 31(1) of the Constitution as it then stood. Elaborating this argument it was submitted by Mr. Bobde that under sections 7 and 8 of the Demonetisation Act a holder of a high denomination note could get its exchange value till 24th January, 1978. After 24th January, 1978 there was no provision under which the exchange value could be obtained by a holder is prescribed by sections 7 and 8 of the Demonetisation Act. It is by reason of this provision within which the exchange can be effected, it was contended, that the acquisition takes place. It was further contended that in respect of the acquisition which takes place on 24th January, 1978, after which date the high denomination notes cannot be exchanged, no amount is payable. This would be vocative of Article 31(1).
(11) It has been held by the Supreme Court in Madan Mohan Pathak and another v. Union of India and others, : (1978)ILLJ406SC that wiping out of a public debt amounts to acquisition. To this extent the submission of Mr. Bobde is correct. We, however, feel that the acquisition namely, the wiping out of the public debt, took place only on 16th January, 1978 and not on a later date. The reason for this is obvious. It is by virtue of section 3 of the Demonetisation Act that the High denomination notes cease to be legal tender with effect from 16th January, 1978. It is with effect from that date that the purchasing power of those notes came to an end. Bank notes are money which can pass from hand to hand in discharge of debts and full payments of commodities purchased. This right of using the bank note as money came to an end, in so far as the high denomination notes are concerned, on 16th January. 1978. Not only those notes ceased to be legal tender but the guarantee of the Government as provided by section 26 of the R.B.I. Act. also ceased with effect from that date. The only conclusion which can be drawn therefrore is that the acquisition was effected on 16th January, 1978 and the compensation or amount to be paid in respect thereof was provided by sections 7 and 8 of the Demonetisation Act.
(12) Even if it to be assumed that the acquisition took place on 24th January, 1973, as has been contended by Mr. Bobde, even then it cannot be said that no amount, as contemplated by Article 31 of the Constitution of India as it then stood has been provided for. It is not the requirement of Article 31 of the Constitution that compensation should be payable only after acquisition has taken place. All that Article 31 provided was that no acquisition shall take place without providing for an amount to be paid in respect thereof. Mr. Shanti Bhushan, the learned counsel for respondent No. 2 is right when he contends that there is nothing to prohibit the payment of compensation in advance in anticipation of the acquisition which may take place at a later date. Mr. Shanti Bhusan is correct in contending that in the present case the compensation for the acquisition, whether acquisition had taken place on the 16th or the 19th or the 24th day of January, 1978, has been provided by section 7 of the Demonetisation Act. It is not unknown that Acquisition Acts may provide for payment of compensation even before acquisition is completed. Reference may usefully be made, for the purposes of analogy, to the provisions of the Land Acquisition Act, 1894. After notification under sections 4 and 9 of the said act has been issued declaring land to be acquired for public purposes claims for compensation arc invited by issuance of notices under section 9 of the said Act. After enquiries etc. are made, compensation is awarded by the Collector under section 11 of the said Act. Section 31 of the Land Acquisition Act requires the Collector to tender payment of the compensation, on his making an award under section 11 to the persons who are interested. The persons whose land has been acquired are thereupon entitled to receive the compenation. The property acquired, however vests in the Collector not at the time of making of the award but when the Collector takes possession of the same under section 16 of the said Act. The possession he may take long after the award has been made and the compensation collected by the owners. This clearly shows that in India acquisition laws do provide for payment of compensation before the acquisition in fact takes place. As such, even if it be assumed that the acquisition takes place after the 24th of January. 1978, an amount by way of compensation has been awarded under sections 7 and 8 of the Demonetiation Act and, thereforee, the petitioner's fundamental rights under Article 31 have not been violated
(13) It was lastly contended that, in the event of our holding that Article 31 has not been violated, the lime fixed for the exchange of the high denomination notes is unreasonable and vocative of the fundamental rights of the petitioner.
(14) In order to judge as to whether the time fixed by Sections 7 and 8 of the Demonetisation Act is reasonable or not, it is necessary to tee what was the object of the enactment. The object is clearly specified in the preamble of the Act which read as follows :-
'WHEREASthe availability of high denomination bank notes facililites the illicit transfer of money for financing transactions which are harmful to the national economy or which arc for illegal purpose and it is thereforee necessary in the public interest to demonetise high denomination bank notes'.
(15) The intention of the Legislature was to bring to an end, as speedily as possible, the circulation of the high denomination notes. With effect from the date the Ordinance was promulgated, the said notes ceased to be legal tender. Section 4 of the Demonetisation Act prohibited the transfer of possession of such notes from one person to another. In this context it was but necessary to ensure that thereafter opportunity is not given to the holders of high denomination notes to transfer the same to the possesssion of others. At the same time, a reasonable opportunity had to be afforded to permit the giving of an exchange value in lieu of the said high denomination notes. This opportunity of being able to exchange high denomination notes was to be afforded only to those persons who were the holders of the notes as on 16th January, 1978. If no time limit had been provided during which such notes could have exchanged, the Legislature must have though that, somehow or the other, holders of the notes who, were not in a position to exchange the same themselves, would try and transfer the said notes to other persons after 16th January, 1978.
(16) Under Section 7(2) of the Demonetisation Act, such exchange could take place not later than 19th January, 1978. It is only the holder of the high denomination notes, or the persons mentioned in Section 7(1) who could exchange the said notes. After 19th January, 1978, the said note could be exchanged till 24th January, 1978, under Section 8 of the Demonetisation Act, provided the tenderer was able to explain the reasons for his failure to apply for such exchange by 19th January, 1978. The intention was very clear, namely that a genuine holder of the high denomination note should not ordinarily require a long time to be able to exchange the said notes. If, however, the time for such exchange was unlimited then the said high denomination notes could continue to ciiculatc and to be transferred from one person to another, without the knowledge of the authorities concerned, and the very object which the Act sought to achieve would be defeated. The fact that transactions outside the books of account take place is well known. The preamble of the Act shows that it was with view to bring such transactions to an end that the High denomination notes, which facilitated such transactions, were demonetised. If a person could go to the Reserve Bank at any time and ask for the exchange value of the high denomination notes, by represent himself to be the holder thereof, the very object of the enactment would have been frustrated. It will be difficult, if not impossible, for the Reserve Bank or the Govt. to prove that such a person was not an owner or holder of the high denomination notes as on 16th January, 1978. Under these circumstances, we are of the opinion that the time specified in Section 7(2) and Section 8 of the Demonetisation Act has to be regarded as reasonable and in the general interest of the public.
(17) At this stage we may also refer to the provisions of Section 7(7) of the Demonetisation Act. This subsection permits the Central Government, for reasons to be recorded in writing, to extend in any case or class of cases the period during which high denomination bank notes may be tenderd for exchange. The effect of this is that even after 24th January, 1978 the Central Government may, even in individual cases, extended the period for tendering such high denomination notes for exchange. This provision was incorporated presumably to mitigate hardship to those persons who genuinely were not in a position to exchange their notes even till 24th January, 1978. To give an example, it is conceivable that a holder of such a high denomination note may have been hospitalised between 16th January, 1978 and 24th January, 1978. In such a case, if he is able to satisfy the Government that he was the genuine holder of the high denomination notes as on 16th January, 1978 and that he was prevented from exchanging the same till 24th January, 1978 then we were sure that the Government would take a realistic view and would extend the period for tendering the notes for exchange. In this view of the matter, it will really not be correct to say that the maximum period within which the high denomination notes may be exchanged was only up to 24th January, 1978. Reading the provisions of Sections 7(2), 7(7) and Section 8 together it appears to us that under Section 7(2) a holder of high denomination notes is entitled to exchange the same by 19th January, 1978 without much difficulty, after that date the holder has to explain to the Reserve Bank of India as to why he was not able to apply for exchange by 19th January 1978, and if such Explanationn was found to be correct or reasonable by the Reserve Bank then such an exchange would be permitted up to 24th January, 1978 under Section 8 of the Demonetisation Act. After 24th January, 1978 the jurisdiction for extending the period within which the high denomination notes could be exchanged, ceases to be with the Reserve Bank of India. Thereafter it is only the Central Government which can extend the period under sub section (7) of Section 7 of the Demonetisation Act. We are, thereforee, of the opinion that the provisions of Sections 7 and 8 which specify the time and the manner in which the high demonination notes can be exchanged, are not unreasonable and consequently are not vocative of the petitioner's fundamental rights.
(18) We may now deal with the merits of each case separately. C.W.P. No. 1012 of 1980 According to the petition, on the day when the Ordinance was promulgated on 16th January, 1978 the petitioner was in Nepal where she was visiting her husband. According to the averments in the petition she had 15 high demonination notes of the Value of Rs. l,000.00 each, claimed as held by her, but the same time locked in Nagpur. It is alleged that she came to know about the Ordinance for the first time when she reached Calcutta on 21st January, 1978 from Kathmandu. It is contended that she did not know about the Ordinance as there was no publicity given to it in Nepal. Thereupon she claims to have rushed to Nagpur on 22nd January, 1978 and file her declaration and tender the notes to the Reserve Bank of India, Nagpur on 23rd January, 1978.
(19) The declaration was filed by her in the statutory form. In clause 16 of the forum which required her to disclose the source from which the bank notes came into possession, it was stated by her as follows :-
'Igot exchanged my smaller denomination currency notes from various private parties from time to time during last one year.' Clause 15, which required her to state the reasons for keeping such notes in her possession, was replied to by her as follows : 'For sake of convenience and safe custody.'
(20) The aforesaid declaration was submitted along with a covering letter dated 23rd January, 1978. In the said covering letter she had stated that she could not file the declaration earlier as she was in Kathmandu and she returned to Nagpur only on 22nd January, 1978. It may here be stated that the declaration which was made by the petitioner was some what similar to the declarations made by her son Vinod Kumar (Petitioner in C.VV.P. No. 1011/8 her daughter-in-law Smt. Sushma Vinod Kumar (Petitioner in C.W.P. No. 1009/80) and her other son Vinod Kumar (Petitioner in G.W.P. No 1010 of 1980). Before the Reserve Bank authorities the petitioner represented that she was an income-tax assessed and that she had been keeping the high denomination notes with herself for convenience and safe custody. In order to prove that she had undertaken the journey from Kathmandu to Nagpur the petitioner produced a certificate dated 19th April, 1979 from the office of the Indian Airlines, Calcutta which certified that one Mrs. V.Saraf travelled from Calcutta to Nagpur on 22nd January, 1978. On the enquiry of the Reserve Bank authorities to furnish the names of the persons and the dates when the smaller donomination notes were exchanged into high denomination notes, the reply of the petitioner was that the Reserve Bank could only enquire into the genuineness and the reasons for the delay in making of the declaration, but it could not go into the sources from which such smaller denomination notes were exchanged. She further stated that she had not kept any record as to the names of the persons from whom the notes were exchanged. The petitioner also produced a certificate dated 24th May, 1979 from M/s. Annapurna Travel & Tours (P) Ltd., Kathmandu certifying that one Mrs. B.D. Saraf had bought a Royal Nepal Airlines ticket on 14th January, 1978 for flight of 21 January, 1978 from Kathmandu to Calculta.
(21) By order dated 20th November, 1979 the Currency Officer, Reserve Bank of India, Nagpur, rejected the said declaration. The reasons for such rejection were as follows :- a) The reason given by the petitioner of her failure to submit the high denomination notes by 19th January, 1978 could not be considered to be genuine. b) The Ordinance was promulgated on the evening of 16th January. 1978 and was given wide publicity over the Radio that very night and again on 17th January, 1978. One would have expected her to leave for Nagpur immediately if she had 15 high denomination notes. The implication of this finding clearly is that the said officer did not accept the version of the petitioner that she did not know about the existence of the Ordinance prjor to her reaching Calcutta on 21st January, 1978. c) The petitioner had not given acceptable reason for keeping such large sums in cash, and has also not given reason as to why notes of smaller denomination were got converted into notes of higher denomination. Moreover, the source of the notes had been revealed and, therfore, the declaration was liable to be rejected under sub section (4) of Section 7 of the Act.
(22) Aggrieved by the said order the petitioner filed an appeal, under section 8(3) of the Demonetisation Act, to the Central Government.
(23) By order dated 14th April, 1980 the said appeal was dismissed. The appellate authority noted that the main question which came up for consideration in the appeal was as to whether the petitioner had satisfactorily explained the delay in filing the declaration. While deciding against the petitioner, the appellate authority held as follows :
(24) ' 'The Ordinance had been given full publicity through the media of radio, press, etc, and thereforee, the Reserve Bank of India came to the conclusion that it was up to the appellant Smt. Bimladevi V. Sarof to have rushed to Nagpur earlier and have the notes which were stated to be in her custody declared within the specified time under section 7 of the Act. Besides the Reserve Bank of India has also not been satisfied that the declaration is complete in all material particulars. Keeping in view all the circumstances of the case there is no reasons for the Government of India to disagree with the well considered order of the Reserve Bank of India. The Government of India has, thereforee, comes to the conclusion that there is no force in the appeals and all the four appeals arc accordingly rejected.' 24 It was contended by Sh. Bobde that the aforesiad findings of the authorities arc incorrect. It was also submitted that the authorities had no jurisdiction to go into the sources of the notes and, in any case, if the Reserve Bank authorities did not accept the declaration to be complete then the only power which they had was to refer the matter to the Central Government under sub-section (5) of Section 7. This not having been done, it was contended, the whole order stands vitiated.
(25) We are unable to agree with submissions. Dealing with the last contention first, we find that the Currency Officer have refused to accept the Explanationn of the petitioner, with regard to the delay, in filing of the declaration, there was really no occasion for him to have commented upon the merits of the declaration. Mr. Bobde is right when he submits that if the Currency Officer was not satisfied with the correctness of the declaration then the only jurisdiction which he had was to refer the matter under sub-section (5) of Section 7 of the Demonetisation Act to the Central Government. Though admittedly this has not been done this would not, in our opinion, vitiate the order. If such a matter had been referred by the Currency Officer then the petitioner would have had opportunity of satisfying the Central Government with regard to the correctness of the declaration. In the persent case the petitioner has had such an opportunity, though in different from. Whereas under sub-sections (5) and (6) of Section 7 such an opportunity would have been afforded to the petitioner on a reference having been made by the Currency Officer, in the persent case the petitioner got this opportunity when she filed an appeal to the Central Government against the order of the Currency Officer. It cannot be said, thereforee, that the petitioner was in any way prejudiced by the non compliance of sub-sections (5) and (6) of Section 7 by the Currency Officer. The petitioner has not in any way been prejudiced and, thereforee., the impugned order cannot be struck down on this ground.
(26) In our opinion, it is also not correct to state that the Currency Officer was going into the sources of the acquisition of the high denomination notes. It is true that it is not for the authorities under the Demonetisation Act to go into the sources from where the notes Were acquired, but the authorities are entitled to know and to satisfy themselves as to whether the declarant was a person who held those notes on the date when the Ordinance was promulgated or whether those note had come into his possession after 16th January, 1978. If the declarant had acquired those notes after 16th January, 1978 then such a declarant would not be entitled to exchange the same. It is only for this limited purpose that the respondents raised a query as to from where the petitioner had obtained the high denomination notes. The implication is clear. If the petitioner was unable to satisfy the source from where those notes were acquire then it would not be unreasonable to presume that the high denomination notes may well have been acquired after 16th January, 1978. In the present case, besides 15 notes which were sought to be exchanged by the petitioner, her soni Vinod Kumar and Vineet Kumar declared 19 and 18 notes of Rs. 1.000.00 each and her daughtcr-in-law Smt. .Sushma Vinod Kumar declared 28 notes of Rs. 1,0OO.00 each. Among at the four of them 80 notes were declared. None of them was able to give the name of a single person from whom these notes had been acquired. It is difficult to believe that neither the petitioner nor other members of her family would know the name of even a single person who had exchanged any of the notes. It may here be noted that in the other petitions, which will be dealt with separately, Vinod Kumar, Vinod Kumar and Smt. Sushma Vinod Kumar have also given the similar Explanationn that the high denomination notes were acquired by them by exchanging notes of lower denominations and that none of them know the names of the persons from whom the notes were acquired. Each one of these declarants stated that such exchange had taken place during the one year prior to the making of the declaration. The non-disclosure of the information asked for could lead one to the conclusion that the said notes were probably acquired after 16th January, 1978.
(27) The authorities have also disbelieved the petitioner when she stated that she did not know about the promulgation of the Ordinance. The petitioner's sons and daughter-in-law have stated that they were not able to tender the currency notes earlier than 23rd January, 1973 because the same were in the custody of the petitioner who was away to Kathmandu. It is difficult to believe that no member of the family of the petitioner would have cared to communicate with the petitioner in Kathmandu and ask her to come to Nagpur immediately specially when the petitioner and her two sons and daughter-in-law were holding, amongst themselves, 80 high denomination notes of Rs. 1000.00 each. The 0rdinance was promulgated on 16th January, 1978 and the time within which the said notes could exchanged was very limited. Even if it be assumd that the news about the promulgation of the Ordinance was not known in Kathmandu, she would have expected the members of the family of the petitioner to have informed her about the promugation of such an Ordinance, and they would have insisted on her coming back to Nagpur in time so as to be able to file the declarations by 19th January, 1978. The respondents were, thereforee, right in coming to the conclusion that the Explanationn of the petitioner under section 8 of the Demonetisation Act for latc filing of the declaration was not acceptable.
(28) In any case the finding of the authorities is a pure finding of fact. Nothing hag been shown to as which would persuade us to come to the conclusion that the decision of the respondents is in any way perverse or one facts and circumstances were considered by the authorities concerned and nothing irrelevant has been into taken consideration. Under these circumstances we are of the opinion that the appeal of the petitioner was rightly rejected. C.W. Nos. 1009, 1010 and 1011 of 1980 :
(29) SMT.SUSHMAVINOD Kumar, petitioner in C.W. 1008/80 filed a declaration regarding 28 notes, Shri Vineet Kumar (Petitioner in C.W. 1010/80) filed a declaration regarding 18 notes of Rs. 1000.00 each and Vinod Kumar (petitioner in C.W. 1011/80) filed a declaration regarding 19 notes of Rs. 1000.00 cach. All these three declarations were filed along with the declaration of Smt. Bimla Devi on 23rd January, 1978. In each one of these declarations the cause for not having filed the same earlier was the same, namely, that the notes were with Smt. Bimla Devi who was away to Kathmandu. The sources of acquisition of the notes, as given in the declarations, was also identical, namely, that the notes had been acquired during the last one year from different parties, whose names could not be disclosed, by getting them in exchange for notes of smaller denominations. The Currency Officer as well as the Central Government did not accept the declarations. In fact the appeals of the four petitioners were disposed of by the Central Govcrmcnt by common order dated 14th April) 1980. The Explanationn of Smt. Bimla Devi, for the late filing of the declaration, not having been accepted, the question of accepting the aforesaid Explanationn of these petitioners does notarise. For the reasons given in connection with Civil Writ Petition No. 1012 of 1980 we are of the opinion that there is no infirmity in the order of the authorities. C.W. No. 1141179:
(30) The petitioners is a close relative of Smt. Bimla Devi, Vinod Kumar, Vineet Kumar and Smt. Sushma Vinod Kumar, petitioners in the Other writ petitions. On 23rd January, 1978 the also filed a declaration in the Reserve Bank of India along with 50 Currency notes of Rs. l,000.00 each. In the covering letter she staled the following reasons. She stated that she was unable to make the declaration earlier because, after having got married on 12th December, 1977 she had gone abroad with her husband on 22nd December, 1977. She is stated to have returend on 4th January, 1978 and had directly gone to her in-laws place at Patiala where she stayed till 19th January, 1978. She futher stated that she returned from Patiala to Nagpur on 20th January, 1978 and as the currency notes were lying at Nagpur, in her father's residence, that is why she should not make the declaration earlier. In the declaration she had also stated that she had kept the amount in cash in high denomination notes 'for sake of convenience and safe coustody.' With regard to the source of procurement of the said bank notes, she had stated in the declaration that she had obtained them by exchanging smaller denomination currency notes' from various private parties from time to time during the last one year'.
(31) By letter dated 30th August, 1978, the Currency Officer of the Reserve Bank of India asked the petitioner to furnish the following information :-
1)Information as to when and from what source you ontained possession of the high denomination notes furnished against item 16 of your declaration (extract enclosed) is not satisfactory. Specific information is, thereforee, required by us in this regard. ii) Documentary evidence is required in support of your journey from Patiala to Nagpur menuoned in your Explanationn (copy enclosed) for delay in submission of your declaration. iii) Since you returned from Patiala on 20th January, 1978 please let us know the reason as to why you could not submit the declaration on 21st January, 1978'.
(32) With regard to the first query, the petitioner in her reply dated 16th September, 1978, stated that she had received cash on different dates commencing from 30 the August, 1977 from various parties bank. According to her, as on 1st January, 1978, she had accumulated cash balance of R-.85,700.00 . She further stated that for the sake of convenience she had converted this cash balance into high denomination notes from different parties during the said period at Nagpur and Bombay through several staff members other family concerns. She was unable to give the exact date and source from where possession of the high denomination notes were obtained. With regard to the second query, the petitioner stated that she travelled by car from Patiala to Delhi and then flew to Nagpur on 20th January, 1978. A certificate dated 8th September, 1978 issued by the Indian Airlines in support of her said journey from Delhi to Nagpur was enclosed. With regard to the third point, the petitioner stated that though she reached Nagpur on 20th January, 1978 it took some time to prepare the papers and the same could be submitted only on 23rd January, 1978.
(33) By order dated 26th December, 1978 the Currency Officer rejected the declaration. The reasons stated in the said letter for rejecting the declaration were as follows :-
I)You had reached Nagpur on 20th January, 1978 but declared the notes only on 23rd January, 1978. The delay in presentation of the notes has not been explained to our satisfaction. ii) The information as to the sourc of the fund and when it was acquired are also mentioned in a vague way and you arc not able to indicate the exact date and source of possession of high denomination notes in question'.
(34) An appeal was filed against the said order. By order dated 4th June, 1979 of the Government of India the said appeal was dismissed. Before the Appellate authority it had been contended, for the first time, that the petitioner could not leave Patiala earlier than 20th January, 1978 for medical reason. It was observed in the appellate order that this plea was an afterthought, as the same Was never pleaded before the Reserve Bank of India and held that the delay had not been satisfactorily explained and the reasons for delay could not be considered to be really genuine. It was also observed that the sources of notes had not been explained to the satisfaction of the Reserve Bank and the Government of India saw no reason to interfere.
(35) In our opinion also the decision of the authorities is correct. Along with the declaration the petitioner was required to give the reasons for the delay in filing of the declaration. It was not mentioned in the letter accompanying the declaration as to why the petitioner could not file the declaration on or before 19th January, 1978. Her Explanationn starts from 20th January, 1978 when she is alleged to have left patiala for Nagpur. Even in the memo of appeal originally filed no Explanationn was given by the petitioner as to why she was unable to file the declaration by 19th January, 1978. Section 8 of the Demonetisation Act requires the declarant to state the reasons as to why the declaration could not be filed within the stipulated period, namely, before 19th January, 1978. No mention having been made at any earlier stage the Central Government was justified in refusing to entertain the Explanationn which was offered for the first time in the appeal. The finding of the Central Government that the Explanationn now offered, namely, that for medical reasons the petitioner was unable to travel from Patiala earlier than 20th January, 1978, was an afterthought cannot be ragareded as a perverse finding or conclusion. We see no reason to interfere with this finding of fact arrived at by the Central Government. With regard to the source of notes, as already explained earlier, the authorities were not really concerned with the source of the money which was acquired, but they were really concerned with the question as to whether the petitioner had acquired possession of the high denomination notes after or before 16th January, 1978. It is for this reason that the query was raised he the authorities with regard to the source of the notes. It is indeed strange that the petitioner was unable to give the name of any one individual from whom she acquired even a single high denomination note, nor has she been able to give the exact date when any of the notes was acquired. It seems improbable that person who has exchanged 50 high denomination notes of Rs. 1,000.00 each would not know these particlulars. The authorities would be justified in forming the impression that in all probabilities the said notes were acqurired by the petitioner after 16th January, 1978 In any case the finding of the authorities concerned is a finding of fact and we see no reason as to why the same should be interfered with. C .W.P. No. 1669179.
(36) The petitioner filed a declaration in the Reserve Bank of India, Patna branch, Patna on 24th January, 1978 along with 60 notes of Rs. l,000.00 each. In the letter dated 23rd Januany, 1978 the reason for not filing the declaration, peior to 19th January, 1978 was stated in the following words:-
'I have the honour to inform that some high denomination notes were kept under my custody for the establishment of my industry (Registered under S.S.I. No 03 : 12 : 00831) at Ranchi and as such these notes are not submitted in the authorised State Bank of India at Ranchi in time due to sudden death of my nearest reletives at Kurjee Hospital, Patna and I was very much engaged in Kriya Karma as per our Hindu Customs at Patna from 11.1.78 to 23.1.78.'
(37) In the declaration the reason for keeping the said amount in cash was stated to be for the establishment of factory and business.With regared to the source from where he obtained the bank notes, it was stated by the petitioner that they were obtained from sale proceeds of land and building, motor car, motor cycle and loan taken from friends and financing agencies. The petitioner also filed anaffidavit giving the dates when he was away from Ranchi. The relevant portion of the affidavit is as follows :-
'1.That I was away from Ranchi on tenth to twelfth day of January, 1978 and from the eightneenth day of January, 1978 to twenty fifth the day ofJanuary, 1978, I was at Patna. 2. That I had gone to Patna for two performances of Kriya Karam and Shradh of my late aunt namely Shrimati Janki Sanaiyar wife of Shri BP. Samaiyar at Patna who died at the Hospital at Patna in the night of ninth of January '78.'
(38) The petitioner was asked by the Reserve Bank to furnish information with regard to the parties to whom land and motor vehicles were sold as well or the notes of the transactions. Details of the loan alleged to have been taken from friends and financing agencies were also asked for. The petitioner by his letter dated 20th February, 1978 declined to give the requisite information. He stated that such questions were beyond the jurisdiction of the Reserve Bank. The petitioner apparently overlooked the fact that the Reserve Bank was entitled to satisfy itself as to whether he came into possession of the said notes prior to 16th January, 1976 and was thereforee, entitled to ask for the said information from the petitioner.
(39) By order dated 23rd January, 1979 the declaration was rejected by the Currency Officer. It was observed that, despite repeated opportunities having been granted to the petioner, he had failed to furnish an attested copy of the death certificate in respect the petitioner's late aunt Smt. Janki Samaiyar. It was further held that even if it be assumed that the petitioner's aunt passed away on 9th January, 1978 that was not a sufficient reason for the delay in submitting the notes for exchange as be could very well have tendered the notes for exchange either at Ranchi of at Pama by 19thJanuary, 1978. The distance between Ranchi and Patna is admittedly not very long. It was also held that the claim was liable to be rejected as full particulars had not been furnished in the declaration. The petitioner had not mentioned the source from where he got the notes and nor had he furnished the said information even subsequently when asked to do so.
(40) An Appeal was filed against the said order. The Government of India vide its order dated 2nd July, 1979 dismissed the said appeal. It was held that the petitioner was aware that Ordinance demonetising the bank notes had been issued. Even if it was accepted that the petitioner was in Patna during the period the notes could be submitted. Government of India held that the distance between Patna and Ranchi 'is not so great that the appellant cannot make a trip and declare the notes at either Ranchi or Patna within the prescribed time while still attending to his obligatory duties in respect of the deceased aunt''. The Govt. of India also upheld the finding of the Currency Officer to the effect that the source of notes had not been explained.
(41) In our opinion the conclusion of the authorities is unexceptionable. As already holed, the petitioner had filed an affidavit the petitioner was admittedly in Ranchi on 16th and 17th January, 1978. The Ordinance had been promulgated in the evening of 16thJanuary, 1978. It has not been stated by the petitioner that he did not know of the promulgation of the Ordinance on that or on the next day. The story of the petitioner is that the notes were in Ranchi. If that was so, then the petitioner has not been able to explain as to why the declaration was not made and the notes lodged with the Reserve Bank of India at Ranchi on 17th January, 1978. Assuming that in the short time available, namely, one day, the declaration could not be prepared and filed in Ranchi, there is still no Explanationn as to why the petitioner did not carry the notes with him to Patna where he could easily have filed the declaration. In any case, it is difficult to believe that the petitioner was so busy in Patna attending to the religious rites that he was unable to make a trip to Ranchi on or before 19th January, 1978 for the purposes of making the requisite declaration . The petitioner was also not able to satisfy the authorities as to what was the source of the notes. The authorities were not obliged to accept the declaration if they were of the opinion that the notes after 16th January, 1978. It was in this context that it become necessary for the authorities to enquire as to when and from where petitioner had obtained the said demonetised notes. On the facts on the record we find no infirmity in the order of the respondents.
(42) For the aforesaid reasons the writ petitions are dismised with costs. Counsel fee Rs. 550.00 one set.