The Bombay High Court has directed the Reserve Bank of India (RBI) to accept demonetised currency notes from a group of Kolhapur residents after their cash was seized by the Income Tax (IT) department during a raid in 2016.
The bench of Justice A.S. Chandurkar and M.M. Sathaye ruled in favour of the petitioners, upholding that they were not at fault.
“We do not find any reason to deny the petitioners the benefit of receiving the value of the specified bank notes,” the bench said.
It acknowledged that the specified bank notes were not in possession of the petitioners at the time of the deadline and, therefore, they should be permitted to deposit the notes for the value of Rs. 20 lakh now.
The ruling provides relief to the petitioners, whose ₹20 lakh in old ₹500 and ₹1,000 notes was returned only after the deadline for deposit had passed.
Income Tax Department Seized Cash During Demonetisation
In November 2016, the Indian government announced the demonetisation of ₹500 and ₹1,000 notes, requiring citizens to deposit them by December 31, 2016. The petitioners had planned to deposit ₹20 lakh into their joint bank account, but an IT department raid on December 26 led to the seizure of their money.
Following an investigation, the IT department decided not to retain the cash. On January 10, 2017, the assistant director of income tax issued a letter to the police, and the money was subsequently returned to the petitioners on January 17, 2017.
RBI Initially Refused Deposit, Court Intervenes
After reclaiming their money, the group attempted to deposit it at the RBI. However, the central bank refused, citing the missed deadline. The petitioners then moved the Bombay High Court, represented by advocate Udaya Sankar Samudrala, arguing that the delay was beyond their control as the funds were held by authorities.
Court Ruling in Favor of Petitioners
The Bombay High Court ruled in favor of the petitioners, directing the RBI to accept the old demonetised currency. The decision sets a precedent for individuals whose cash was seized by government agencies during demonetisation and returned after the deposit window had closed.
Case Details
Case Title: Ramesh Bapurao Potdar Versus The Union of India
Case No.: Writ Petition No.2926 Of 2017
Date: 27/02.2025
Counsel For Petitioner: Udaya Sankar Samudrala with Mr. Sujit Upadhyay and Mr. Shivesh Upadhyay
Counsel For Respondent: D.P. Singh
