Was abolition of Indian Currency by Modi Unconstitutional?


Indian Prime Minister Modi's abolition of the unconstitutionality of the old currency

On November 8, Indian Prime Minister Narendra Modi suddenly announced that the old currency with face value of 500 and 1,000 rupee would be stopped immediately. Except for some emergency use in hospitals and road traffic, the old currency originally held by the public , Allowing each person to exchange 4,000 rupees in the new currency at bank outlets every day, that is, each person is allowed to exchange 400 yuan for urgent needs in life. Other large amounts of currency can only be deposited in banks. 

However, the administrative decree stipulates that when a large amount of currency is deposited in a bank, sufficient evidence must be provided to prove that the currency held is legal, otherwise the government has the right to treat these as these If the currency is black gold or a corrupt transaction, it will be confiscated or a 40% income tax will be imposed. While promulgating this administrative decree, Prime Minister Modi explained to the people of the whole country that his purpose is to curb rampant black gold trading and extremely serious corruption. 

For more than ten days since the decree was promulgated, each bank branch has been lined up with a long dragon of one kilometer or two kilometers for currency exchange. 

Legality of Demonetization or its Constitutional validity

Trade issues and life order have been greatly disrupted throughout the country, and many trades have almost stagnated. However, only a small amount of currency is exchanged by the people, and it is simply difficult to meet the urgent needs of life. In particular, the supply of new currency issued by the government cannot keep up. 

In some places, only 2,000 rupees a day can be exchanged. This has also led to varying degrees of violence throughout the country. According to incomplete statistics, it has been there are nearly 47 people who caused *** or related deaths due to direct or other indirect inducements.


If it is just social order, if it is only convenience of life, it may be short-lived, but as far as this law is concerned, the reason for the great public outrage is that many people in society have obtained wealth for a long time or decades. 

It is stored in cash, because about half of the people in India do not have an identity certificate or do not have an identity certificate, and two-thirds of the people have not opened a bank account, and most of them save by holding cash. In this way, after this decree takes effect, it means that the large amount of currency held by these innocent people cannot prove its legitimacy, which leads to property damage. 

For a large number of small trade enterprises and small and medium-sized enterprises, cash transactions are also the mainstay. 

In this way, the whole country means that a large number of people’s property will be degraded or disappeared because of this law.


We now look at this incident from a legal perspective. In a civilized society or a modern society ruled by law, the legal property of innocent people is caused by a decree of the government, and there should be legal remedies.

 On the day of the promulgation of the decree on November 8,  Indian media, academics and experts that this decree must be unconstitutional. I also believe that Indian lawyers will definitely file public interest lawsuits and declare or declare through judicial review. 

The decree that made Modi’s government was unconstitutional. Sure enough, within these ten days, nearly seven or eight lawyers across the country filed suits in the local high courts, requesting the high courts to declare this law of the Modi government unconstitutional. So far, this case is still under review. 

In the end, whether this provision of the Modi government is unconstitutional or not, some people personally think it is unconstitutional. 

First of all, under a social and constitutional structure like India, is an independent judiciary sufficient to deal with or to relieve the losses of these people? 

India's constitutional government It belongs to modern constitutional government, and it is also the separation of three powers, but compared with the United States or other democratic constitutional countries, the judicial power of India is more authoritative and independent. 

Historically, it has been effective for the election of the prime minister, and the unconstitutional review of some laws and regulations issued by the government

 Over the past two hundred years, or after the establishment of the new government, that is, more than 50 years after the promulgation of the new constitution. Over the past year, more than 1,000 unconstitutional review judgments have been made. I personally believe that under the Indian constitutional framework, due to its judicial independence and authority, it is sufficient to relieve or defend the people's rights to property losses caused by this decree. After suing this decree to the high court, the current high level 

The judges of the court and the Supreme Court have put forward their own views on this. They believe that the Modi government is out of consideration for public interests. This policy of the Modi government is for the better development of the national economy. Therefore, a large part of the public and Jurists believe that this decree is not unconstitutional. But few think this understanding is against the spirit of the modern rule of law. Few People don't deny that even if Modi is to curb black gold and corrupt transactions, even if Modi is for the better development of the country's economy, as long as this law violates the principles of the constitution. 

Violation of the principles of human rights and the rule of law will lead to invalidity and unconstitutionality. We must not harm the legitimate rights and interests of individuals or a few people for the interests of the country or the majority. The reason for the existence of constitutional review under the constitutional framework and the need for an independent Constitutional Court (Supreme Court) is to eliminate the majority. 

The result of the voting, or such damages the legitimate rights and interests of the minority for the benefit of the majority. As far as this incident is concerned, it must have harmed the legitimate rights and interests of a few people. I believe that at least in terms of procedures and entities, six points are unconstitutional. 

According to the principle of constitutional review, if one of these six points is violated, it will be Result in invalid:

1. This law violates the principle of trust protection

 When the old currency is in circulation, the public has a basic common sense judgment on it, that is, in an era of peace, the government cannot suddenly abolish some currencies in circulation, and the principle of trust protection also requires any modern government. 

The punishment of the incident or the extent of law enforcement should be connected to a certain extent, or the scale for the public will not suddenly become higher or lower. 

In India, in the past few decades, the government considered large amounts of cash transactions or holding large amounts of cash to the people to be legal, but suddenly the government required the people to prove the legality of holding cash, which meant that the government suddenly tightened the standards of law enforcement, which violated the principle of trust protection in the administrative law. 

That is to say, the government made the public always believe that the previous actions of the government were carried out on such a scale, but suddenly the scale happened. Change also violates the constitutional principle of trust protection and is unconstitutional.


2. This decree violates the principle of legal reservation

 The Modi government issued this decree through the Ministry of Economic Affairs under the Ministry of Finance. The modern rule of law country restricts the lives, health and property rights of citizens or people, and must pass the Congress. Laws, rather than administrative orders or administrative regulations, can be used to degrade people’s property or restrict people’s personal freedom. Of course, there are also individual countries that allow Congress to authorize the government to make corresponding regulations. But countries in the modern sense basically do not allow administrative agencies to make such regulations, stop the circulation of these currencies for so long, or require the public to provide sufficient evidence to prove that they originally hold the legality of currency, this regulation directly relates to the derogation of people’s property, whether it is from the legal principle or the rules of modern legislation, it should belong to the scope of Congress legislation, and it can never belong to government agencies or administrative regulations. 

Regulations, so at this point, some people think that the Ministry of Finance of the Modi government, or not to mention the Ministry of Economic Affairs under the Ministry of Finance, even the Ministry of Finance, and even Modi’s cabinet, have no right to make such a property of the people. The derogated administrative regulations, this administrative regulation will also be invalid.


3. This law violates the principle of non-retroactivity of the law

Because this law stipulates that the currency held by the people before the promulgation of this law may lead to violations of the law, or it stipulates that the people must prove whether the behavior before the promulgation of the law is legal and prove the source of funds, which means that this law is retroactive. 

In the past, the government today issued a decree to allow people to prove whether the behavior before the decree is legal or not, which violates the principle of non-retroactivity of the law.


4. The decree intends to allow people to prove themselves guilty. The ordinary people have accumulated a large amount of legal currency and property in decades. 

The government now wants the ordinary people to prove the legality of these holdings. This is similar to self-incrimination, because in addition to the existing restrictive provisions of the law, such as it is said that public servants have the obligation to prove the legal source of their property, otherwise the government has the right to cancel the amount of the crime of unknown origin. However, the Modi government's actions today require ordinary people to prove the legal source of their property, that is, self-incrimination.

 If the people cannot prove, the government or administrative agency has the right to impose income tax or directly confiscate it. Presumption of guilt.

 In a modern civilized society, there is no presumption of guilt, and people must not be allowed to prove themselves guilty, unless government agencies produce enough evidence to prove that the currency held by these people, the people, and even the most powerful and powerful officials is illegal, nor can it be presumed, confiscation or heavy taxation.


5. The decree violated the principle of necessity

 Judging from the principle of necessity, the Modi government has repeatedly declared to the media and society that the reason for this policy is to curb black gold trading and corruption. But we know that in any modern society, if the government wants to curb such behavior, it is nothing more than taking measures such as system construction and increasing supervision, but never a country or a legal person thinks that curbing black gold transactions or corruption is related to currency circulation.

 In a certain sense, currency is just a trading tool. A society without currency can still produce a lot of black gold transactions and corruption with gold bullion and gold bars. Therefore, this statement of the Modi government is actually very funny and violates Basically logical. 

You can't confiscate all gold because of curbing black gold trading and corruption. This is one aspect. On the other hand, the logical deduction of this statement itself is even more absurd. You confiscated and abolished the old currency of 500 face value, and introduced a new currency of 2000 face value. This means that if you say that large currencies will lead to black gold transactions and The emergence of corruption, a new currency that is four times larger also means that the black gold transaction and the emergence of corruption have been accelerated four times, so Modi’s reason is obviously contrary to the basic logic. 

In addition, we look at the entire Indian society, whether it is black gold trading or corruption, in the lives of the people, the use rate of cash in small and medium-sized enterprises and commercial trade, its proportion is very small, perhaps only a percentage. 

Five or ten percent, but you can't kill the remaining convenient use of cash and cash transactions in order to curb these five or ten percent imaginary black gold transactions and corruption. So from the first point of view, it violates the principle of necessity, that is, this administrative regulation is not necessary in the legal sense.


6. The law violates the principle of proportionality. The so-called principle of proportionality is the promulgation of any administrative decision or regulation. 

The purpose you are pursuing must have a reasonable ratio to the social cost caused. It cannot be used to pursue those uncertain or small administrative purposes or governance purposes. And it hurts a large proportion of social costs. 

We have made life judgments and economic judgments from what the Modi government has explained to the society. I think that in order to curb black gold trading and corruption, such a legislative or administrative purpose has caused damage to the interests of the entire society and the people, or the entire social order. Destruction completely violates the principle of proportionality.


In summary, no matter which of the above six points is violated, it will lead to the unconstitutionality of the entire administrative law and regulations. As far as the entire incident is concerned, I personally think that the purpose of the Modi government's actions is not to curb black gold transactions as claimed by the outside world. Or to curb corruption, the purpose is more likely to promote the devaluation of the entire country's currency through the issuance of a large denomination currency with a face value of 2,000 yuan, thereby driving the growth of the entire economy. We know that in today's modern countries, big countries and big countries are in the process of international trade, the financial war is the most rigorous. 

The devaluation of any country's currency will cause the loss of other countries' economic interests, and it will also cause devaluation in international trade. 

The country has the upper hand, which is why Trump repeatedly raised the issue of the strength of the Chinese government's currency devaluation during the campaign. Modi is a very intelligent politician. He wants to smoothly enhance the country's economic competitiveness by issuing a 2,000 yuan face value currency by means of secret storage or shifting the focus, but it is only to curb black gold and corruption. 

As an excuse to quell the social turmoil caused by the inflation caused by currency devaluation, and the derivative resistance and demonstrations against the government. 

In the second aspect, the Modi government is likely to want to promote the financial progress of the entire country, because nearly half of the people in the entire Indian society do not have an ID card, and most of the people do not have bank accounts, and the act of requiring currency to be deposited in the bank will cause the public to open a large number of bank accounts or use Internet financial tools in a short period of time. This is likely to bring about the reform of the national financial system and the control of society. Great promotion.


In any case, in the Indian society, between the opposition party and the ruling party, such a democratic constitutional society of oppositional structure and party rotation, in terms of this event, what kind of social unrest will be triggered, or the whole It remains to be seen in which direction the political struggle will lead. But in general, judging from the legal point of view, this behavior must be unconstitutional, and it must be inconsistent with Indian society's basic pursuit of a modern society under the rule of law.




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