Specified bank notes to cease to be liability of Reserve Bank or Central Government
Section 3 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017 deals with specified bank notes to cease to be liability of Reserve Bank or Central Government. On and from the appointed day, notwithstanding anything contained in the Reserve Bank of India Act, 1934 (2 of 1934) or any other law for the time being in force, the specified bank notes which have ceased to be legal tender, in view of the notification of the Government of India in the Ministry of The Act came into force on 31 Dec 2016.
On and from the appointed day, notwithstanding anything contained in the Reserve Bank of India Act, 1934 (2 of 1934) or any other law for the time being in force, the specified bank notes which have ceased to be legal tender, in view of the notification of the Government of India in the Ministry of Finance, number S.O. 3407(E), dated the 8th November, 2016, issued under sub-section (2) of section 26 of the Reserve Bank of India Act, 1934, shall cease to be liabilities of the Reserve Bank under section 34 and shall cease to have the guarantee of the Central Government under sub-section (1) of section 26 of the said Act.
Section 3, The Specified Bank Notes (Cessation of Liabilities) Act, 2017 (Act 2 of 2017).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Vivek Narayan Sharma v. Union of India
Court's Decision & Legal Precedent
Judgement order-147.pdf 2023-01-02 DATE VERIFIED (Constitution Bench; Gavai J. for majority; labelled Judgement of Main Case). On Specified Bank Notes (Cessation of Liabilities) Act 2017: s.3 extinguishes RBI/Central Government liability on SBNs that ceased to be legal tender under the 8.11.2016 RBI Act 26(2) notification; s.4 provides a grace-period exchange mechanism. Holding Issue (vi): RBI does not have independent power under s.4(2) in isolation of ss.3 and 4(1) to accept demonetised notes beyond the period specified in notifications under s.4(1) — ss.3 and 4 must be read contextually and harmoniously. (Same CNR already on RBI Act 26; this pass attaches the labelled merits PDF and remaps onto SBN Act teaching sections.)
On this section: s.3 — SBNs cease to be liability of RBI/Central Government after demonetisation; applied as the cessation-of-liability hinge read with s.4 grace period.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 3
What have the courts held on Section 3 of the Specified Bank Notes (Cessation of Liabilities) Act?
Vivek Narayan Sharma v. Union of India (02 Jan 2023) is the leading judgment on this section among those set out below: s.3 — SBNs cease to be liability of RBI/Central Government after demonetisation; applied as the cessation-of-liability hinge read with s.4 grace period.
How do I find court cases under Section 3 of the Specified Bank Notes (Cessation of Liabilities) Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Specified Bank Notes (Cessation of Liabilities) Act 3, section 3 Specified Bank Notes (Cessation of Liabilities) Act, section 3 of the Specified Bank Notes (Cessation of Liabilities) Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Vivek Narayan Sharma v. Union of India (02 Jan 2023).
What should I read with Section 3 of the Specified Bank Notes (Cessation of Liabilities) Act, and has it changed?
1 other provision in this corpus refers back to it.
When did Section 3 of the Specified Bank Notes (Cessation of Liabilities) Act come into force?
Section 3 of the Specified Bank Notes (Cessation of Liabilities) Act, cited as Specified Bank Notes (Cessation of Liabilities) Act 3, came into force on 31 Dec 2016, having been enacted on 27 Feb 2017. It is in force as at the date shown on this page.
Other sections of this Act
- 4. Exchange of specified bank notes259 words
- 8. Offences by companies253 words
- 2. Definitions164 words
- 5. Prohibition on holding transferring or receiving specified bank notes157 words
- 11. Power to make rules148 words
- 12. Power to remove difficulties102 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 19 Oct 2026. This page is not a substitute for legal advice.