Exchange of seized demonetised notes depends on compliance with special statutory rules and the required court direction.

Seized demonetised currency notes may be exchanged only under the Specified Bank Notes (Deposit of Confiscated Notes) Rules, 2017, framed under the Specified Bank Notes (Cessation of Liabilities) Act, 2017, and only where the notes were seized or confiscated before the relevant cut-off date and the prescribed conditions are met. The framework also requires production of the court direction contemplated by the rules. On that basis, the petitioner was permitted to seek exchange of the released notes, subject to compliance with the statutory requirements and the necessary court direction within the stipulated time.

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Issues: Whether the petitioner was entitled to exchange the seized old demonetised currency notes after their release, in light of the applicable statutory rules and the conditions prescribed for deposit or exchange of such notes.

Analysis: The currency had been seized by the police and later released to the petitioner. The governing framework was the Specified Bank Notes (Deposit of Confiscated Notes) Rules, 2017, issued under the Specified Bank Notes (Cessation of Liabilities) Act, 2017, which permitted deposit or exchange of specified bank notes in cases where the notes had been seized or confiscated before the relevant cut-off date and where the court direction and other prescribed conditions were satisfied. The Reserve Bank of India stated that exchange could be considered if the petitioner produced the court direction contemplated by the rules and fulfilled the stated conditions.

Conclusion: The petitioner was held entitled to seek exchange of the released demonetised currency notes, subject to compliance with the prescribed statutory conditions and production of the necessary court direction.

Final Conclusion: The writ petition was disposed of with a direction enabling the petitioner to obtain exchange of the old currency notes upon compliance with the applicable rules within the stipulated time.

Ratio Decidendi: Exchange of seized demonetised currency notes can be granted only in accordance with the special statutory rules governing confiscated notes and upon satisfaction of the prescribed conditions, including the required court direction.

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