Two weeks after the Reserve Bank of India’s circular regarding cryptocurrency came in to play, the Indian cryptocurrency community gears up for its first signs of reproach, as the Supreme Court of India resumes hearings on the petition filed against the central bank.
The lawsuits have been in courts for over a month, having been filed in response to the circular that was issued on the 6th of April. The circular came with a three month deadline which expired on the 5th of July.
The Premise of the Circular
The circular that was released on the 6th of April came with an explicit order for all banks, companies and enterprises that are registered with the Reserve Bank of India to drop all accounts that deal in cryptocurrencies and suspend all cryptocurrency related activity in the time frame of three months.
The deadline, based on the date of release of the circular, was set to the 5th of July. By which time all banks and companies should have successfully suspended cryptocurrency activity. Which entailed dropping or suspending the accounts of major exchanges in the country.
This impacted the exchanges in India as the withdrawal of bank support of cryptocurrency meant that making crypto-INR and INR-crypto pairs would become illegal. There by instating a blanket ban on the market and crippling the options that the cryptocurrency community in India had.
While some exchanges, like Zebpay, expressed interest in keeping the good faith of the government by working with them instead of against them, saying it would be counter-intuitive to sue the financial institution, other exchanges and players in the industry went another way.
As the circular did its rounds in the industry and social media circles, it triggered many court cases, challenging the circular and demanding that it be withdrawn.
The Premise of the Petitions
As reported before, there are court cases going on in multiple High Courts of the country and the Supreme Court of India. Key players in the cryptocurrency industry are behind these lawsuits and are being represented by the country’s best law firms.
The case that is currently being resumed in the Supreme Court of India today, is being represented by lawyers from Khaitan & Co law firm, which is one of India’s oldest law firms.
The premise of the petition against the central bank of India is being fought with two fronts, adhering to two different articles of the Indian Constitution. The first article being; Article 19(1) (g) of the Indian Constitution that deals with allowing the citizens of India to carry out any sort of trade, occupation and business and the second being; Article 14 which mandates no discrimination and equal protection under the law for all.
While the invocation of these two articles in the petition against the circular released by the Reserve Bank of India, means serious business, it by no means assures that the government will withdraw its blatant blanket ban on the market.
The Resumption of Hearing at the Supreme Court
Today marks a very important day in the developments of this case; as it is the day that the Supreme Court of India is resuming hearings after having suspended them at the end of last month. Incidentally, the Supreme Court of India also rejected a request to stay the effect of the circular in the first week of the month even though the cases were still being heard in court.
Rashmi Deshpande, the lawyer representing Kali Digital Eco-Systems, an exchange looking to set up and start later this year, called the circular unconstitutional and is firm on the fact that it should be quashed. She also went on to say that they are hoping that the hearing and the decision the court takes regarding the matter is done purely on a meritocratic level.
The case is being presided over by the Chief Justice of India, Dipak Misra along with justices AM Khanwilkar and DY Chandrachud.
The issue is in the spotlight as of now, as it concerns an entire industry that has a pretty large community around it. Many government officials have come out in support of the circular being withdrawn, of banks remaining supportive of the industry and letting the industry grow in the country. Only recently Gopal Subramaniam, the lawyer representing the interests of the Internet and Mobile Association of India (IAMAI), came out in support of the industry and said that such a circular calling for a blanket ban from the RBI would be a loss.
An anonymous source very close to the lawyers fighting the case on both sides also revealed, that there is a chance of that the Attorney General of India, KK Venugopal, may be present during the proceedings. Which further solidifies the fact that this is a case and issue that is very high on the government’s agenda.
The expectation from the courts today is minimal. As today is merely the resumption of hearing of the case in front of the Supreme Court of India. However, the discussions and points that will be presented today and the way they are received, will go on to show the intentions of the court and most probably give away their stance on the matter.
The hope is that the proceedings of today will force the government and the court to show their hand, so that the future of the cryptocurrency community becomes a little clearer in the country.
Previously the Supreme Court has ordered SEBI and other bourses to engage with the Reserve Bank of India and work together on coming to a decision on the matter. However, just last month the Reserve Bank of India rejected all the suggestions they made and remained steadfast on their stance to keep and go ahead with the blanket ban on the market, in the country.
When the RBI approached the bench for a final hearing date the Chief Justice of India gave the date of 11th of September. The court case over the petition against the RBI’s circular is being spearheaded by an exchange called CoinRecoil. When the Chief Executive Officer, Kunal Barchha, was asked about the proceedings today, he said that, “There were no arguments or responses done today. As court just gave next date for final disposal.And we represented just our petition, not other exchanges. I don’t know if any other exchange has made any response.”
Either way, today marks the first day in what seems to have all the tells of a long-drawn case at the Supreme Court and comes as a reprieve to the cryptocurrency community in India. But with the rumours of the government having formed panels and held discussions on the subject over the last two months, the community in India is hopeful that the courts will sway their way. But only time and a verdict in black and white will tell what is in store for the crypto community in India.
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