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6. According to the respondents, the effect of the aforesaid provision was that the high denomination notes ceased to be legal tender with effect from January 16, 1978, but the high denomination notes could be exchanged, within the period stipulated in ss. 7 and 8 of the Demonetisation Act, provided other conditions mentioned therein were satisfied.

7. The first contention raised by Shri Bobde was that, notwithstanding the provisions of the Demonetisation Act, the holders of the high denomination notes were entitled to obtain exchange value of those notes from the Reserve Bank of India. It was contended that the provisions of the Reserve Bank of India Act, 1934 (hereinafter referred to as "the RBI Act"), made it obligatory for the Reserve Bank to give the exchange value in respect of the banknotes which had been issued by it notwithstanding the fact that the said notes may have ceased to be legal tender. It was submitted that, according to s. 3 of the Demonetisation Act, the high denomination notes were to cease to be a legal tender "in payment or on account" at any place. According to Mr. Bobde, this and the other provisions of the Demonetisation Act, did not prohibit the RBI from discharging its statutory liabilities and obligations under the provisions of the RBI Act.

19. Under s. 7(2) of the Demonetisation Act, such exchange could take place not later than January 19, 1978. It is only the holder of the high denomination notes, or the persons mentioned in s. 7(1), who could exchange the said notes. After January 19, 1978, the said notes could be exchanged till January 24, 1978, under s. 8 of the Demonetisation Act, provided the tenderer was able to explain the reasons for his failure to apply for such exchange by January 19, 1978. The intention was very clear, namely, that a genuine holder of the high denomination notes should not ordinarily require a long time to be able to exchange the said notes. If, however, the time for such exchange was unlimited, then the said high denomination notes could continue to circulate and be transferred from one person to another, without the knowledge of the authorities concerned, and the very object which the Act sought to achieve would be defeated. The fact that transactions outside the books of account take place is well known. The preamble of the Act shows that it was with a view to bring such transactions to an end that the high denomination notes, which facilitated such transactions, were demonetized. If a person could go to the Reserve Bank at any time and ask for the exchange value of the high denomination notes by representing himself to be the holder thereof, the very object of the enactment would have been frustrated. It will be difficult, if not impossible, for the Reserve Bank or the Government to prove that such a person was not an owner or holder of the high denomination notes as on January 16, 1978. Under these circumstances, we are of the opinion that the time-limit specified in s. 7(2) and s. 8 of the Demonetisation Act has to be regarded as reasonable and in the general interest of the public.

20. At this stage, we may also refer to the provisions of s. 7(7) of the Demonetisation Act. This sub-section permits the Central Government, for reasons to be recorded in writing, to extend in any case or class of cases the period during which high denomination banknotes may be tendered for exchange. The effect of this is that even after January 24, 1978, the Central Government may, even in individual cases, extend the period for tendering such high denomination notes for exchange. This provision was incorporated presumably to mitigate hardship to those persons who genuinely were not in a position to exchange their notes even till January 24, 1978. To give an example, it is conceivable that a holder of such high denomination note may have been hospitalised between January 16, 1978, and January 24, 1978. In such a case, if he is able to satisfy the Government that he was the genuine holder of the high denomination notes as on January 16, 1978, and that he was prevented from exchanging the same till January 24, 1978, then we are sure that the Government would take a realistic view and would extend the period for tendering the notes for exchange. In this view of the matter, it will really not be correct to say that the maximum period within which the high denomination notes may be exchanged was only up to January 24, 1978. Reading the provisions of ss. 7(2), 7(7) and s. 8 together, it appears to us that under s. 7(2), a holder of high denomination notes is entitled to exchange the same by January 19, 1978, without much difficulty, and after that date the holder has to explain to the Reserve Bank of India as to why he was not able to apply for exchange by January 19, 1978, and if such explanation was found to be correct or reasonable by the Reserve Bank, then such an exchange would be permitted up to January 24, 1978, under s. 8 of the Demonetisation Act. After January 24, 1978, the jurisdiction for extending the period within which the high denomination notes could be exchanged, ceases to be with the RBI. Thereafter, it is only the Central Government which can extend the period under sub-s. (7) of s. 7 of the Demonetisation Act. We are, therefore, of the opinion that the provisions of ss. 7 and 8, which specify the time and the manner in which the high denomination notes can be exchanged, are not unreasonable and consequently are not violative of the petitioner's fundamental rights.

31. In our opinion, it is also not correct to state that the currency officer was going into the sources of the acquisition of the high denomination notes. It is true that it is not for the authorities under the Demonetisation Act to go into the sources from where the notes were acquired, but the authorities are entitled to know and to satisfy themselves as to whether the declarant was a person who held those notes on the date when the Ordinance was promulgated or whether those notes had come into his possession after January 16, 1978. If the declarant had acquired those notes after January 16, 1978 then such a declarant would not be entitled to exchange the same. It is only for this limited purpose that the respondents raised a query as to from where the petitioner had obtained the high denomination notes. The implication is clear. If the petitioner was unable to satisfy the source from where those notes were acquired, then it would not be unreasonable to presume that the high denomination notes may well have been acquired after January 16, 1978. In the present case, besides 15 notes which were sought to be exchanged by the petitioner, her sons, Vinod Kumar and Vineet Kumar, declared 19 and 18 notes of Rs. 1,000 each and her daughter-in-law, Smt. Sushma Vinod Kumar, declared 28 notes of Rs. 1,000 each. Amongst the four of them, 80 notes were declared. None of them was able to give the name of a single person from whom these notes had been acquired. It is difficult to believe that neither the petitioner nor other members of her family would know the name of even a single person who had exchanged any of the notes. It may here be noted that in the other petitions, which will be dealt with separately, Vinod Kumar, Vineet Kumar and Smt. Sushma Vinod Kumar have also given a similar explanation that the high denomination notes were acquired by them by exchanging notes of lower denominations and that none of them knew the names of the persons from whom the notes were acquired. Each one of these declarants stated that such exchange had taken place during the one year prior to the making of the declaration. The non-disclosure of the information asked for could lead one to the conclusion that the said notes were probably acquired after January 16, 1978.