Last week, Ahmedabad-based crypto firm Kali Digital Eco Systems, which runs a cryptocurrency exchange platform named CoinRecoil, had approached the Delhi High Court filing a petition against the Reserve Bank of India (RBI) recent guidelines which have banned banks from dealing with Indian cryptocurrency purchase/exchanges.
Following which High Court of Delhi has issued a notice to The Reserve Bank of India, The Union of India through Secretary, Ministry of Finance and GST Council. The next hearing in this case is on May 24 2018.
The circular which was filed against RBI dated April 6, 2018 was titled “Withdrawing Banking Support to Virtual Currency Exchanges” in Delhi High Court.
More About the Petition
CoinRecoil requested Hon’ble High Court to issue of an appropriate writ, order or direction quashing circular bearing reference number DBR.No.BP.BC.104/08.13.102/2017-18, dated 6 April 2018 issued by RBI to be arbitrary, unconstitutional and violative of Article 14 and Article 19(1)(g) of the Constitution of India, 1950 (“Constitution of India”).
Ms. Rashmi Deshpande, Associate partner, Khaitan & Co. said on the scenario made a comment,
“The move by the RBI has put the burgeoning crypto currency sector in jeopardy and may affect the basic rights of such entities to carry on any trade. The circular appears to be arbitrary and unconstitutional since it does not give strong facts as to why RBI is against the business of cryptocurrencies. A logical and well thought arguments backed by solid facts are the primary requirements under the Constitution to put a stop to any business in India”
However, not just RBI but Union of India and Goods and Service Tax Council are also held as respondents to the case. Union of India, represented through the Secretary, Ministry of Finance (Department of Economic Affairs) has granted powers to RBI to issue the impugned circular while GST Council couldn’t implement any regulations with respect to cryptocurrencies in the Goods and Services Tax law.
This is not a first time where RBI and concerned government bodies in India have been filed a notice against.
- Earlier. the Supreme Court of India had issued a notice to the Ministries of Finance, Law and Justice, IT, SEBI and the RBI while hearing a plea filed by petitioner Dwaipayan Bhowmick seeking a Bitcoin regulatory framework.
- In July 2017, a similar Public Interest Litigation was filed (Writ Petition (Civil) no. 406 of 2017) under Article 32 of the constitution against Union of India, Ministry of Finance and the Reserve Bank of India over the use and business of illegal cryptocurrencies such as Bitcoins, Litecoins, Ethereum, and dogecoins.
Hearing the plea on July 14, 2017, the Supreme Court had then directed the RBI and the concerned ministries to clarify their stance and enact a bill on the same before disposing of the PIL.
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