The 2018 RBI circular stating a banking ban for crypto service provider was challenged by the Internet and Mobile Association of India (IAMAI) in the Supreme Court whose hearing has been going on for over a year. In the latest hearing of the case which started on 14th January and continued today on 15th, the Supreme Court asked the councils to begin the argument from the beginning and both the sides presented their arguments as per the court proceedings.
Crypto Kanoon, a crypto-focused Twitter handle managed by Supreme Court Lawyers provides all the live updates of the case proceedings and were the true source of information even this time around. The court proceedings began with Mr Ashim Sood reading out a report from SEBI about the drawbacks of the draft bill recommended by the Committee to Indian Govt. Mr Sood says that RBI in its circulars mentioned about certain risks including volatility, however the same is involved in stock trading also and effectively lies under the domain of SEBI and not RBI.
He further cited that RBI had no due authority over issuing a banking ban on crypto service providers.
RBI circular is bad in law on three diff. aspects:
1. Malice in law. RBI doesn't have the power to ban but acted to ban Crypto on effect.
2. Colourable exercise
3. Ultra Vires - without authority.
Mr Sood than continued his argument focusing on why the law is malice and then supported his argument by reading out the Banking Regulation Act. The act clearly notes that the use of 'Public Interest' provision can be done only in the context of the Act itself. You cannot go out in the world and find a problem to use this Act in the Public Interest. He also cited the RBI order and noted that RBI did not
The court proceedings on 15th concluded with Mr Sood concluding his argument by presenting RBI's Affidavit and argued that RBI did not analyze or had any material to proceed with the banking ban. The court proceedings will continue tomorrow on 16th January.