Delhi High Court issues notice to RBI and others over cryptocurrency
Delhi High Court has issued a warning against the Reserve Bank of India after an Ahmedabad based cryptocurrency startup Kali Digital EcoSystems filed a petition.
Kali Digital approached the Delhi High Court on 16th April 2018 challenging the RBI circular dated 5th April 2018 titled “Withdrawing Banking Support to Virtual Currency Exchanges.”
The company requested Hon’ble High Court to issue an appropriate writ, order or direction quashing circular bearing reference number DBR.No.BP.BC.104/08.13.102/2017-18, dated April 6, 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”).
Speaking on the matter, Rashmi Deshpande, Associate Partner, Khaitan & Co., advocate for the petitioner Kali Digital said, “The move by the RBI has put the burgeoning cryptocurrency 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. 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.”
The start-up in its petition has mentioned the Union of India and Goods and Service Tax Council along with the RBI. Union of India which is represented by the Secretary, Ministry of Finance (Department of Economic Affairs) has granted powers to RBI to issue the controversial circular while the GST Council failed to introduce appropriate regulations related to cryptocurrencies in the Goods and Services Tax law.
Previously, before this case, there have been petitions filed against various government institutions by various plaintiffs.
For instance, Supreme Court of India had earlier 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 its 43-page petition, Bhowmick has sought after explanations regarding the delay over regulatory frameworks.
Similarly, online petitions are introduced by crypto enthusiasts across the country, against the ban put by RBI on cryptocurrency dealings and bank support to these entities.
The petition, which has already been signed by almost 44K people, read, “Crypto and blockchain as a concept can’t be stopped. You can just decide whether you want to participate with full throttle or get left behind. The current stance from the government shows they would want to remain left behind after missing the internet revolution first, AI revolution next and now blockchain revolution.”
With such uncertainty surrounding the digital token and its functioning, the country seems to be in a transition, until a concrete decision is taken by the financial institutions. Till then people will have to wait and watch.
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