India: Supreme Court Issues Notice To RBI, Union Of India And Other Government Ministries And Institutions In Petition Seeking Ban On All Cryptocurrencies Like Bitcoin In India

Last Updated: 16 November 2017
Article by Vaish Associates Advocates

The Hon'ble Supreme Court of India on 13th November 2017 in a Writ (PIL) bearing  W.P.(C) No. 1071/2017, titled as Siddharth Dalmia & Anr. Vs Union of India and Ors., filed against virtual currencies like Bitcoins, argued by Mr. Vijay Pal Dalmia, Advocate (Petitioner-In-Person), was pleased to issue notices to Union Of India,  Ministry of Home Affairs, Reserve Bank of India, etc.

The order was passed by a Bench of Hon'ble Chief Justice Mr. Dipak Misra, Hon'ble Justice Mr. AM Khanwilkar and Hon'ble Justice Mr. D Y Chandrachud.

A copy of the writ may be downloaded from the following link: https://goo.gl/hNAUs4

or at

http://www.moneylaundering.legal/admin/pdf/14Nov2017101149WRIT%20-SC-%20Siddharth%20Dalmia-vs.%20UOI-%20Against%20Virtual%20Currency-Bitcoin.pdf


The Writ Petition has been filed in Public Interest under Article 32 of the Constitution of India for seeking issuance of directions to the Respondents to ban the sale and purchase of illegal cryptocurrencies or Decentralised Digital Currency or Virtual Currency (VCs), such as, Bitcoins, Litecoin (LTC), Dash, Bbqcoins, Dogecoins, Ripple etc., which are being traded openly and extensively within the knowledge and domain of the Government of India for a host of anti-national and illegal activities.

That in June 2017, the Petitioners herein, Mr. Vijay Pal Dalmia, Advocate along with Mr. Siddharth Dalmia, an engineer and a law student at Jindal global Law School, filed the Public Interest Litigation on the instant subject by way of a Writ Petition (Civil) No.000406/2017 in June 2017, in which Mr. Vijay Pal Dalmia, Advocate argued in person before the Hon'ble Court and underlined the threat of the virtual currencies on the developing economy like India. While disposing the said petition, the Hon'ble Court gave a specific direction to the Reserve Bank of India to examine the issue posed by the Petitioners and take a conscious decision on the same.

That in terms of the Order dated 14.07.2017 of the Hon'ble Court, the Petitioners raised the present issues before Reserve Bank of India and in order to apprise the Union of India and other ministries, shared the copy of the writ petition with them. That the RBI had sent an evasive reply to Petitioners, wherein RBI shrugged aside its duty to conclusively take a stand either in favour or against the illegal Virtual Currencies like Bitcoins and the Petitioners did not receive any response from the Union of India and other ministries, which compelled the Petitioners to file the present PIL.

A Virtual Currency/ Cryptocurrency like Bitcoin, is a stateless digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank like the Reserve Bank of India, without any trail or track, rendering it immune from government interference. That most of the currencies in the world including the currency of India i.e. rupee, are Fiat currencies. Fiat money is the currency that a government has declared to be legal tender, but which may not be backed by any physical commodity like Gold.

That some of the laws which in view of the Petitioners are being violated because of open trading of illegal Cryptocurrencies like Bitcoins, are as under:

  • The Constitution of India, 1950;
  • Reserve Bank of India Act, 1934;
  • The Foreign Exchange Management Act, 1999 (FEMA);
  • The Reserve Bank of India Act, 1934 (RBI Act);
  • The Coinage Act, 1906 (Coinage Act),
  • The Securities Contracts (Regulation) Act, 1956 (SCRA);
  • The Sale of Goods Act, 1930 (Sale of Goods Act);
  • The Payment and Settlement Systems Act, 2007 (Payment Act).
  • Indian Contract Act, 1872 (Contract Act).

The present petition was heard along with Writ Petition (Civil) No. 1076/2017.

This Writ Petition is in Public Interest under Article 32 of the Constitution of India for issuance of Writ of Mandamus or any other appropriate Writ, order or direction to the Respondents to ban the sale and purchase of illegal cryptocurrencies or Decentralised Digital Currency or Virtual Currency (VCs), such as, Bitcoins, Litecoin (LTC), Dash, Bbqcoins, Dogecoins, Ripple etc. (hereinafter collectively referred as illegal Virtual Currency like Bitcoins), which are traded openly and extensively within the knowledge and domain of the Respondents for a host of anti-national and illegal activities, such as funding of terrorism and insurgency, illicit trade of arms and drugs, recruitment of terrorists, bribery, corruption, money laundering, tax evasion, generation of black money, payment of ransom, human trafficking, hawala trade, illicit investments, avoidance of banking channels and surveillance of funds, online gambling, resulting in catastrophic impact on Indian currency, inflation, loss of control of Government on financial discipline, resulting in damage to country's sovereignty and integrity, and illegal diversion of money. All this is happening without any border restrictions or geographical constraints, in complete violation of Indian laws, resulting in danger to the integrity and sovereignty of India, and causing harm and danger to the peace and tranquility of the society,  the security of the state and the residents of India, friendly relations with Foreign States, public order and morality.

For any other information or assistance, contact Vijay Pal Dalmia, Advocate Supreme Court of India and Delhi High Court, Mobile: +91 9810081079 email: vpdalmia@gmail.com or

Siddharth Dalmia Mobile No. +91 9971799250 Email: dalmiasiddharth1994@gmail.com.

In this writ petition following prayers have been made before the Hon'ble Supreme Court:

  • Issue of a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to declare as illegal and ban all illegal virtual Currencies,cryptocurrencies or Decentralised Digital such as, Bitcoins, litecoins, bbqcoins, dogecoins etc.,and investigate, fix accountability and responsibility for the sale and purchase of Virtual Currencies like BitCoins till date, and prosecute the offenders.
     
  • Issue of a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to declare illegal and ban all website, web links and mobile applications, which are being used to buy, sell or deal in any manner whatsoever, illegal Virtual Currencies like Bitcoins.
  • Issue of a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to give advertisements and wide publicity through all media, informing and educating public in India about the illegalities involved with the sale, purchase and dealing of illegal Virtual Currencies like Bitcoins.

Article by Vijay Pal Dalmia, Advocate, Supreme Court of India and Delhi High Court, Partner & Head of Intellectual Property Laws Division, Vaish Associates Advocates, India

© 2017, Vaish Associates Advocates,
All rights reserved
Advocates, 1st & 11th Floors, Mohan Dev Building 13, Tolstoy Marg New Delhi-110001 (India).

The content of this article is intended to provide a general guide to the subject matter. Specialist professional advice should be sought about your specific circumstances. The views expressed in this article are solely of the authors of this article.

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