PIL: (Writ Petition (Civil) no. 406 of 2017), was filed under Article 32 of the Constitution of India in the Supreme Cou

A Public Interest Petition (PIL) (Writ Petition (Civil) no. 406 of 2017),  was filed under Article 32 of the Constitution of India in the Supreme Court, against Union of India, Ministry of Home Affairs, Ministry of Finance and Reserve Bank of India, against the use and business of  illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc.

During the course of hearing on 14th July 2017, the Bench of Hon'ble Chief Justice of India J.S. Khehar and Hon’ble Mr. Justice D. Y. Chandrachud, while disposing off the PIL, gave four weeks to the Reserve Bank of India to examine all security related issues about virtual currency, including BitCoin, and respond to the Petitioners.

A copy of the writ petition is attached herewith this email for your kind reference and record.

Vijay Pal Dalmia, Advocate along with Mr. Siddharth Dalmia, an engineer and a law student, filed the Public Interest Litigation (PIL) as petitioner nos. 1 & 2 respectively.

This Writ Petition was 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 directing the Respondents to take emergency and urgent  steps for restraining the sale and purchase of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., which are being traded and invested-in openly and extensively within the knowledge and domain of the Respondents anonymously over internet and otherwise for a host of anti-national, illegal and nefarious 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, transfer of money through hawala, hawala trade, illicit investments, avoidance of banking channels and surveillance of funds, online gambling resulting in negative impact on Indian currency, inflation, loss of control of Government on financial discipline and illegal diversion of money, and all this happening without any border restrictions or geographical constraints by avoiding and violating laws, resulting in danger to the integrity and sovereignty of India causing harm and danger to the peace and tranquility of the society,  the security of the state and the residents of India.

This writ was an outcome of a cyber attack on 13th May, 2017 by Wanna Cry ransomware. The WANNA CRY ransomware opened the eyes to the truth behind the cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc. to the world including India. It has been reported widely in media that Lakhs of people got their data encrypted and their system was locked in India and over other 104 countries. Since 13th of May, the entire world is concerned about the ransomware. This large-scale worldwide cyber-attack was launched affecting computer networks in many countries across the globe, including India. The hackers demanded payments of $300 to $600 (roughly Rs. 19,000 and Rs. 38,000) using Bitcoins as a ransom for unlocking computers and affected devices. The magnitude of the attack is yet to be ascertained by the Indian Government. The Reserve Bank of India had to notify all banks to operate their ATMs only after updating software systems to avoid being infected by ransomware. It has been reported in media that one of the biggest impacts so far has been on computers used by the Andhra Pradesh police where 18 units across five districts, including Visakhapatnam and Srikakulam, had been under attack. There were reports that the virus also infected computers in the offices of the West Bengal State Electricity Distribution Company in three blocks,Belda, Data and Narayangarh in West Midnapore district. The attack has crippled lakhs of computer devices and networks computers across the globe, and struck banks, hospitals, and government agencies in several countries. In India, many of these hackings go unreported as companies do not want to ‘damage’ their reputation and ransom money may be paid through Bitcoins as anonymity is maintained. Ransomware is a form of malware that encrypts a computer’s files and displays a message to the user, saying it will decrypt the files for payment, typically via Bitcoin. WannaCry is a program targeting Microsoft's Windows operating systems where hackers take control of a computer and lock the data until the victim make a payment in return.
 
That some of the laws which are being violated because of open dealings in 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”).

In the writ petition following prayers were made:

  1. Issue 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 cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., as  illegal;
  2. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to take immediate steps in the present situation of emergency, for restraining and banning the sale and purchase of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc.;
  3. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to ascertain the actual figure of  illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., that has been sold and purchased in India, and fix accountablity and responsibility for the same;
  4. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to investigate and prosecute all those who have indulged in the sale and purchase of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc., that has been sold and purchased in India, and fix accountablity and responsibility for the same;
  5. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to ban access of all website, web links and mobile applications, which are being used to buy and sellillegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc. and all other website and mobile applications which are accepting bitcoin as a payment option;
  6. Issue 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, educating public about the illegalities involved with the sale, purchase and dealing of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc.;
  7. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents to implement existing laws, rules and regulations in true letter and spirit for prohibiting sale, purchase and dealing of illegal cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs), such as, Bitcoins, litecoins, bbqcoins, dogecoins etc.,
  8. Issue a Writ of Mandamus or any other appropriate Writ, order or direction under Article 32 of the Constitution of India, directing the Respondents, in case there is any deficiencies in existing laws, rules and regulations,  to enact appropriate law and frame rules and regulations to regulate sale, purchase, dealing, holding and reporting of cryptocurrencies or Decentralised Digital Currency or “Virtual Currency” (VCs).

The other relevant details of the PIL are as under:

Date of Hearing: 14th July, 2017

VIJAY PAL DALMIA vs. UNION OF INDIA THROUGH CABINET SECRETARY

Writ Petition (Civil) no. 406 of 2017 (PIL)
BEFORE SUPREME COURT OF INDIA
CHIEF JUSTICE'S COURT
HON'BLE THE CHIEF JUSTICE Mr. J.S. Kehar
HON'BLE DR. JUSTICE D.Y. CHANDRACHUD

Now the issue has been referred to the Reserve Bank of India, to take a call on the subject matter within 4 weeks of the receipt of the copy of the writ along with the representation of the undersigned.

The issue of the Crypto Currencies/ Virtual currencies like Bit coins is of national importance, and needs a debate in media as well as a firm stand by the Government of India.

Vijay Pal Dalmia, Advocate

11th Floor, Mohan Dev Building, 13 Tolstoy Marg, New Delhi-110001 (India)
Mobile: +91 9810081079 | email:
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The Hindu:http://www.thehindu.com/news/national/plea-in-sc-seeks-curbs-on-cryptocurrencies/article19290260.ece

Deccan Chronicle: http://www.deccanchronicle.com/nation/current-affairs/160717/apex-court-asks-rbi-to-restrain-sale-and-purchase-of-bitcoins.html

News18: http://www.news18.com/news/india/ensure-virtual-currency-is-not-used-for-terror-funding-money-laundering-sc-to-centre-rbi-1461329.html

Cryptocoins News:https://www.cryptocoinsnews.com/indias-supreme-court-pushes-govt-check-bitcoin-transactions/

Daily Hunt:http://m.dailyhunt.in/news/india/english/deccan+chronicle-epaper-deccanch/apex+court+asks+rbi+to+restrain+sale+and+purchase+of+bitcoins-newsid-70379464

Patrika (Hindi):http://www.patrika.com/news/miscellenous-india/supreme-court-to-rbi-restrict-bitcoin-1624106/

First Post (Hindi):http://hindi.firstpost.com/business/now-rbi-and-indian-govt-ready-to-control-on-bitcoin-after-supreme-court-directives-pr-41413.html

Bitcoin.com: https://news.bitcoin.com/india-supreme-court-bitcoin-legalization-taxation/

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