LAHORE, Jan 2: Justice Chaudhry Ijaz Ahmad of the Lahore High Court on Wednesday served notices on the State Bank of Pakistan and the finance ministry in an amended writ petition moved by Advocate M.D. Tahir , who contended the issuance of currency note of Rs5,000 and stopping the circulation of Rs5 note.

The original petition raised the question of virtual renouncing of coins of all smaller denominations. The petitioner sought a court injunction against the federal government, arguing that the practice of stopping issuance of coins was unconstitutional and unlawful, and it was adding to the financial hardships of the people.

The court had already issued notices to the central bank and the finance ministry in the original writ petition with the direction to file their reply within one month.

The amended petition, which was moved under the permission of the court, stated that the SBP had started withdrawing the currency note of Rs5 denomination and was planning to issue coin of the same value. Besides, the SBP was also issuing currency notes of Rs5,000 and Rs20 denomination.

Advocate M.D. Tahir submitted that the new SBP policy was in conflict with the interest of the people, who were made to spend more because they were not returned coins of smaller denomination after purchases.

This was the second petition by the advocate and was based on an SBP report of Nov 30 that the coins of all denominations were legal tender and no restriction had been imposed on their minting or circulation.

The SBP, however, said the demand of coins of 1, 2, 5 and 10 paisa had come down to nil over the period. But coins of 25 and 50 paisa continued to be minted and circulated.

The petition submitted that the Punjab was the only province where smaller coins were not in transaction and business and commercial concerns did not return them. As a result, the price of all essential commodities was charged in rupee.

He submitted that the State Bank of Pakistan was obliged under the Coinage Act of 1949 to arrange for the circulation of coins of all denominations, which were accepted and transacted in other provinces.

He said he moved an identical petition in 2001 and the Lahore High Court on Dec 18 sent it to the federal and the Punjab governments as well as the State Bank for suitable action. But no action had so far been taken.

Instead, the SBP had forced banks to accept and release to the public coins of one, two and five rupees. Currency notes of one and two rupees had been cancelled and the SBP was about to withdraw the currency note of Rs5 denomination.

He requested the court to declare as illegal the SBP policy of stopping the circulation of coins and issue a direction to the bank to release sufficient amount of coins of all denominations to banks for a regular transaction.