Possession of demonetized Rs 500 and Rs 1,000 notes beyond March 31, 2017 is Illegal

New Delhi, December 28, 2016: The cabinet on Wednesday approved an ordinance which makes possession of demonetized Rs 500 and Rs 1,000 notes beyond March 31, 2017 illegal, providing for a jail term for violators.

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The opposition, however, questioned the logic behind the ordinance and termed the government policy as "rudderless and confused". It also accused the government of repeatedly bypassing the Parliament over demonetisation and otrher issues.

People can deposit old notes in banks up to December 30 and with the Reserve Bank of India up to March 31 next year.

Official sources said the ordinance — called "The Specified Bank Notes Cessation of liabilities Ordinance" — will be sent to President Pranab Mukherjee, currently in Hyderabad, for approval before notification.

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The ordinance, approved during the cabinet meeting chaired by Prime Minister Narendra Modi, seeks to amend the Reserve Bank of India Act, aimed at extinguishing the liability of the government towards bearers of such notes.

Sources declined comment on whether the ordinance also sought a jail term for violators. "The ordinance primarily seeks to shield the government against future litigations that may follow for not honoring the promise to pay," a senior official said.

However, the ordinance makes it clear that collection of old notes up to ten in number will not invite prosecution.

Reacting to the developments, a senior Congress leader told IANS: "Is it proper to pass an ordinance on a matter which is sub judiceIJ I think this is a cover up operation to legalize the demonetization order because even its veracity is under judicial scanner.

He also questioned the logic behind bringing an ordinance barely a month before the next Parliament session.

Trinamool Congress (TMC) Rajya Sabha MP Sukhendu Sekhar Roy called the NDA dispensation as "government of ordinances".

"The government has gone berserk. They are bringing one notification after another. They are suffering from utter confusion…there is no cohesion between the government and the RBI," Roy told IANS.

Janata Dal United (JDU) leader K.C. Tyagi called the government policy on demonetisation as "rudderless".

"On one hand the Prime Minister has said that after March 31 next year, the old currency notes would be 'kagaz ke tukre' (worthless pieces of paper). Now where on earth is it illegal to possess worthless paper," Tyagi asked.

"Ever since November 8 they have brought 61 notifications. This shows their bewilderment and lack of policy direction," Tyagi told IANS.

CPI(M) General Secretary Sitaram Yechury said the government has chosen this back door ordinance method to bring in the law.

"We are against this ordinance raj," he said.

–IANS