Nowadays, the Demonetisation with effect from midnight of 8th November 2016 of high denomination notes of Rs.500 and Rs.1000 by the present Indian Government led by Shri Narendra Modi is making news. It would be interesting for the readers to note that in 1978 also, the demonetisation took place in India. The then President promulgated an Ordinance called High Denomination Bank Notes (Demonetisation) Ordinance which came into force on January 16, 1978. By this Ordinance, the high denomination bank notes of Rs.1000, Rs.5000 and Rs.10,000 were ceased to be legal tender with effect from 16th January 1978.  The Ordinance was later replaced by High Denomination Bank Notes (Demonetisation) Act, 1978. The constitutional validity of the Demonetisation Act was challenged in a number of petitions which were decided by Hon’ble Supreme Court of India in the case of Jayantilal Ratanchand Shah, Devkumar Gopaldas Aggarwal and others vs Reserve Bank of India and others. In Writ Petition (Civil) No. 1188 / 1978. The Judgment was delivered by a Constitution Bench of 5 Judges on 9th August 1996.

After discussing the law on the subject including the RBI Act 1934, the Supreme Court had upheld the legal validity of the Demonetisation Act primarily on the ground that it was done for public purpose. Writ Petitions of some persons / organisations challenging action of the Government / RBI to not to honor scrapped currency notes held by them were dismissed by the Supreme Court.

Here is the official link to the Full text of the Judgment :