Ahmedabad-based cryptocurrency firm may challenge RBI circular in SC

Ahmedabad-based crypto firm Kali Digital Ecosystems may approach the Supreme Court to bring forward its next hearing on the Reserve Bank of India’s (RBI’s) circular prohibiting banks from dealing with cryptocurrencies.

This is because the central bank has asked all the lenders to wind up dealings by July 6. The hearing is slated for July 20. Alternatively, the company is also exploring a strategy of going to the RBI to put off its diktat to lenders unless the apex court comes out with its order. 

“We are exploring options to either go to the Supreme Court or RBI  in this matter,” a source close to the company said. The Supreme Court had recently transferred all petitions to itself and posted the matter to July 20. It barred all high courts from entertaining pleas relating to an RBI circular prohibiting dealings in virtual currencies.

As such, a petition filed by Kali Digital Ecosystems in the Delhi High Court has also been transferred to the Supreme Court. Kali runs a cryptocurrency exchange platform named CoinRecoil. 

In its plea to the high court, Kali said the RBI circular is a violation of the freedom to trade, enshrined under Article (1) (g) of the Constitution. 

The source in the company said the July 20 date for hearing defeats the purpose since banks have to wind up their dealings by July 6, according to RBI’s directions. 

Rashmi Deshpande, associate partner with Khaitan & Co, said the Supreme Court recently transferred the entire batch of petitions pending at the high courts with respect to the contentious issue of RBI’s ban on transactions in cryptocurrencies. 

“This decision highlights the importance of this issue at the national level from not just a legal, but also an economic point of view. We strongly believe that the RBI’s circular bitrary decision against the freedom of right to trade guaranteed by the Constitution,” she said. 

A circular issued by the RBI on April 6 says that regulated entities which already provide such services (dealing with virtual currencies) “will exit the relationship within three months from the date of this circular.”pleas relating to an RBI circular prohibiting dealings in virtual currencies.

As such, a petition filed by Kali Digital Ecosystems in the Delhi High Court has also been transferred to the Supreme Court. Kali runs a cryptocurrency exchange platform named CoinRecoil. 

In its plea to the high court, Kali said the RBI circular is a violation of the freedom to trade, enshrined under Article (1) (g) of the Constitution. 

The source in the company said the July 20 date for hearing defeats the purpose since banks have to wind up their dealings by July 6, according to RBI’s directions. 

Rashmi Deshpande, associate partner with Khaitan & Co, said the Supreme Court recently transferred the entire batch of petitions pending at the high courts with respect to the contentious issue of RBI’s ban on transactions in cryptocurrencies. 

“This decision highlights the importance of this issue at the national level from not just a legal, but also an economic point of view. We strongly believe that the RBI’s circular to effectively discourage the business of cryptocurrencies exchanges is an arbitrary decision against the freedom of right to trade guaranteed by the Constitution,” she said. 

A circular issued by the RBI on April 6 says that regulated entities which already provide such services (dealing with virtual currencies) “will exit the relationship within three months from the date of this circular.”

According to Agarwal, the strategy of the company is to have a good return even after the high discounts are through intensive use of technology, good planning of works and anticipation of delivery of the lines, which generates an additional revenue.

The company has already secured funding and all environmental licenses for one of its three projects and it is confident of delivering projects well ahead of deadline.  “We have an excellent track record of delivering projects ahead of schedule and using some innovative strategies,” Agarwal said.

He said that in one of the projects in India, the company even used helicopters to carry transmission towers at a site in a mountainous region, which saved company significant number of months. In comparison, the project would have been certainly got delayed had the company gone ahead with the traditional method of Indian companies transporting equipments through donkeys.

There is a possibility that the use of helicopters and drones, are also possible in Brazil, with a line of almost 2,000 kilometers that the company will build in the north to help integrate the transmission lines into the system.