The value of money is an inevitable factor in everyone’s life. The economic stability and growth of a country undoubtedly depends on the implementation of financial strategy by the Government concerned. In India 2016 was a crucial year in Indian economy when the currency value were subject to various transformations. Demonetization of certain currencies in 2016 literally shattered the economic stability of citizens and also the country’s monetization policies. In order to clarify the confusions created by the cessation of certain indispensable Indian currencies the Union Government had passed an ordinance in 2016 and on 27th February 2017 The Specified Bank Note (Cessation of Liabilities) Act 2017 was enacted through extra ordinary Gazette Notification. This act is a concise act with 13 sections and one chapter specifying every details about holding and transaction of ceased currencies and the consequences and penalties of doing so by any of the citizens in the country.
In sec 2 (e) states the specified bank notes with denomination of five hundred and one thousand rupees series which were subject to cessation on or before 8th November of 2016. Further in section 3 the cessation of liabilities of the said currencies by the Reserve Bank and the central Government is clearly stated. A grace period to tender ceased currencies by people who hold it on or before 8th November 2016 subject to condition of providing declaration stating the reason of having ceased currencies is mentioned in sec 4 of the act. Section 5 restricts and ban any person from the transaction of the ceased currencies voluntarily after the grace period.
The penalty of any act done in contravention of section 5 is subject to a fine of ten thousand rupees or five times the amount of the face value of the ceased bank notes whichever is higher as per section 7. A fine of fifty thousand rupees is imposed for furnishing false declaration. The Judicial Magistrate of 1st class is empowered by virtue of this act to impose penalty. Section 8 defines the offenses committed by the companies in contravention of section 6 and 7 where the person who is in charge of the business or company were held liable.
Protection clause to any legal proceeding against Central government and Reserve bank of India any act done with good faith subject to the act is provided in section 10 the Act. The central Government’s power to make rules, difficulties that are inconsistent to the provisions of the act and repeal and savings are mentioned in section 11, 12 and 13 respectively.
Though this act was enacted to reduce the risk of black money and terror funding and there by ensures the economic stability of the country the immediate enactment and overnight banning of the currencies created chaos and conflicts among people and Government. The penalties were wrongly implemented on common people that finally resulted in protest against this Government policy where the common people were subject to suffering while people with influence and power were not affected. Apart from the implementation of provisions of the act the result was an enormous currency shortage in the country that eventually compelled the Government to reinstate five hundred rupee notes back and introduction of two thousand Rupee bank notes.