We must appreciate Sri Ashim Sood, the learned counsel who convinced the eminent honourable Supreme Court judges M/s Rohinton Fali Nariman, Aniruddha Bose and V Subrmanian to issue a judgement in the Bitcoin case which is written like a film/drama script where the climax suggests that the hero wins but the villain survives for another day.
The judgement is written with a “Story line”, “The Setting”, “The Flashback”, “Background Score (of the petitioners), “Script” (Of RBI), “Unfolding of the Plot” and the “Climax” . It will be long debated in the academic circles for the art of judgement writing.
The judgement spread over 180 pages culminates with the ruling that the “Circular of 6/4/2018” in which RBI had restricted the Banks from dealing with the accounts of Bitcoin exchanges was “a disproportionate exercise of power” by the otherwise empowered RBI.
So far, Supreme Court was exercising its powers to intervene in the executive decisions of the Government and now it has assumed powers to also intervene in the executive powers of the regulators. All regulators now have to not only follow statutory powers as enshrined in the law but also be prepared to vet every one of their day to day circulars with the Supreme Court.
In fact it would a good idea to mark the “master copy of all the circulars issued by the regulators to the registry of the supreme court” so that objection if any can be recognized immediately. Perhaps the Cyber Security Framework CSF 2016 issued by RBI and similar notifications can also now be brought before the Supreme Court so that a special bench of the Court can be set up to go through every circular of RBI, SEBI, IRDAI, TRAI etc and check it for “Proportionality”.
The writing of the judgement indicates that the Court has considered the entire thing like a “Drama” and not a “Serious economic issue”. The Court has written a good film script but in the end given an opportunity to the villain (in this case the Bitcoin, the currency of the criminals, terrorists and Black money holders) to be marketed with the slogan… “Supreme Court upholds Bitcoin Trading”. Most innocent members of the public will consider this a vindication of the Bitcoin as a “Virtual Currency” and will not hesitate to invest in them.
The Supreme Court however has been smart and it can always say that they have not upheld the validity of Bitcoin but only said that there was a disproportionate exercise of power by RBI. It is a clever judgement but lacks an appreciation of a duty of the Court to uphold what is good for the society.
The Reserve Bank, the ED and the Government placed a faith in the Court to clarify the status of the “Virtual Commodity” which is actually misrepresented and used as a “Currency”. Since it is not a currency but is used as a currency, there was the legal dilemma whether RBI has the power to regulate it or not.
The Court could have considered the “Perceived Status of Bitcoin” as a currency as the reality and held that the RBI has the powers to regulate it. But it took a “Filmy route to an ambiguous climax” that will confound the confused.
It is not clear which of the judges of the bench had this “Bollywood flair” for writing a judgement of this nature but it would make an interesting academic exercise to identify if such a “Bollywood flair” was evident in any of the earlier judgments of the honourable judges of the bench or they were simply inspired by the arguments of the Counsel.
I suggest that IAMAI pay the Counsel his well deserved remuneration in the form of bitcoins and express their faith in the judgement. Never mind if the bitcoin so paid could have passed through the tainted hands and collected from cyber crime victims or the drug dealers or arm dealers or the terrorists and therefore carries the taint in its ownership as a “Non Negotiable Instrument” for which there can be no “holder in due course”.
The Sequel to unfold
Keeping the tradition of the Bollywood to come up with sequels, we should now expect the “Bitcoin Saga-2” in which the hero has to be changed from RBI to the Citizen of India. Since the Citizen of India cannot have the resources to fight the “Digital Black money power” that Bitcoin represents, it is the responsibility of the Government of India to take up the issue on behalf of the Citizens.
Presently the Government has treated Bitcoin with an approach similar to the what allowed Shaheenbagh protests on CAA to flare up into a major catastrophe. By not taking proactive action and blindly trusting the Court to do the needful, the Government erred in the Bitcoin case just as they did in the case of Shaheenbagh protests.
We must appreciate that the Courts like in the case of Nirbhaya have their own priorities. If necessary they meet midnight and take decisions and if not they allow the accused to die a natural death before publishing a reserved judgement.
The Government of Mr Modi and Shah should not be like that of Narasimha Rao or Manmohan Singh which were famous for procrastination and inaction. This Government is better known for action. It should therefore immediately start directing the sequel to this story.
Now that the Supreme Court has accepted that the RBI has the power for regulating Bitcoin but only the means of how it was exercised was wrong, it is time for the Government to understand it has its powers to go through with the draft legislation on Bitcoin which it has already developed and ban private virtual currency concepts such as Bitcoin and others to remain in circulation.
If the Bitcoin community wants to challenge the law, let them do so. Afterall today Indian Government administration is run from the Supreme Court and not the Parliament. Parliament makes the law, the President approves but the Supreme Court has to place its seal of approval to make the President’s approval valid. The supreme legislative authority for the country is no longer the Parliament but is the Supreme Court.
The law on Banning of Crypto currency will also go through the Supreme Court like many other cases which are already before the Court and the Citizens are ready to receive the verdict in the next sequel.
What is important however is that honest citizens of the country have felt that Bitcoin represents “Digital Black Money” and allowing its trading is facilitating the circulation of black money. The Supreme Court through this judgement had failed to recognize its duty to the public but taken shelter under technicalities to uphold the rights of digital black money holders to continue their transactions in black money.
We call upon Mr Narendra Damodar Das Modi, Mr Amit Shah and Mrs Nirmala Sitharaman and others to come out with the Crypto currency bill right today or tomorrow and place it in the Parliament at the earliest.
Naavi
Earlier articles on Bitcoin on this site are available here
Dear Naavi
What you have expressed, is a very bold, clear, straight-forward view born out of national interest and the common man’s welfare. Hope the Government will read your views and act immediately. There is no doubt that crypto-currency is ab initio bad in law, unjustified in ethics and untraceable in practice. Such an unregulated, non-monitored and uncontrolled transaction cannot be expected to be good for the society.