CASE BRIEF

CASE NAME AND CASE LAW:

Internet and Mobile Association v. Reserve Bank of India (Writ
Petition (Civil) no. 528 of 2018) (RBI Act 1934 and Banking
regulation Act, 1949).

FACTS:
In April, 2018 the Reserve Bank of India through a circular
prohibited all the working of virtual currencies (VC’s). The
circular prohibited dealing as well as proving with any services
relating to the same. The effect of such a circular was that
trading through VC’s could no longer be maintained through the
help of bank accounts thereby putting an end to all sorts of
VC’s business. The RBI issued such a circular in consideration
to the increasing number of cyber crimes and the lack of safety
in dealing with VC’s. Other issues like money laundering and
terrorist activities were also some of the concerns which lead to
such a decision by the RBI.

ISSUE:
Whether is comes within the jurisdiction of the RBI to issue
such a circular prohibiting the working of VC’s?

JUDGEMENT:
The Hon’ble Supreme Court of India in a significant judgement
dated 4 March, 2020 by a bench of Justice Rohinton Fali
Nariman, Justice S. Ravindra Bhatt and Justice V.
Ramasubramanian struck down the circular from the Reserve
Bank of India imposing a ban on the working of VC’s in India.
The court stated that such a ban by the RBI is not proportional
to the risks considered by the RBI and thus is unsustainable.
This is a relevant judgement in ascertaining the role of judicial
review in case of economic policy decisions.